A two per cent increase in service tax in the Budget will partially impact the Indian tourism industry, according to Mr Nikhil Ganju, country manager, TripAdvisor India.
Launched in 2008, TripAdvisor India is a subsidiary of the US-based travel site TripAdvisor.
“From an industry perspective, this will have an impact and the increase in service tax will ultimately be passed on to the customers,” Mr Ganju said on the sidelines of an event here on Wednesday.
The increased service tax was going to have an impact on the hoteliers at a time when they had just started recovering from a slowdown-induced business loss; the prices had been flat for quite some time, he added.
However, according to Mr Ganju, Indian travellers have not stopped packing their bags altogether.
“Indians are relatively less thrifty when it comes to spending for travelling. There may have been cuts in the duration of the trips. They may change the category hotels. But, they are not at all cancelling trips.” Mr Ganju said.
“Travelling is not a luxury any more. Now, travel planning has become a part of everybody's family budget,” he added.