Tourism industry seeks lower VAT on ATF as summer travel slumps

Jaipur: Soaring fuel prices, tumbling stock markets, reduced corporate travel, geopolitical unrest combined to batter the summer tourism season.

Industry associations said hotel occupancies have plunged to just 35-40%, compared to far higher levels last year.

The sharp fall in demand has forced many properties to slash tariffs, with room rates dropping 20–25% from the previous season.

Hoteliers said the downturn reflects both reduced domestic travel and weaker foreign arrivals, leaving the sector struggling to cope with shrinking revenues.

Tourism stakeholders have also requested the state govt to reduce VAT on ATF fuel on the lines of Maharashtra and Delhi, which recently reduced the rates from 25% to 7% to support aviation growth and keep airfares more affordable.

The industry feels affordable air connectivity is critical for tourism revival.

“A reduction in ATF VAT would encourage airlines to introduce and expand flight operations to key destinations like Jaipur, Udaipur, Jodhpur, Jaisalmer, Bikaner, Kota, and Kishangarh,” said Ranvijay Singh Rathore, secretary, Hotel Federation of Rajasthan.

Summer travel in Rajasthan has been growing in the past several years. Despite the temporary lull due to Operation Sindoor last year, the overall visitor inflow was good during the summer season.

“The impact of Gulf war, high oil prices and gloomy economic outlook have hit the sector hard this year. Occupancies in the pure-play leisure properties have declined to 25-30%. They are unable to generate enough business to meet the operating expenses and are making losses,” said Rathore.

Tourism remains a major pillar of the state’s economy, generating employment and investment. It has become a major destination for weddings and MICE tourism. The industry feels affordable and strong air connectivity is essential for the sustained growth of the sector.