India’s new Goods and Services Tax (GST) was introduced this month (launched at the chimes of midnight on the 1st of July): this new fiscal regime will inevitably improve trading across the sub continent's burgeoning internal markets. The hospitality sector can expect to benefit in particular which will be further welcome news given the influential Indian Credit Ratings Agency (ICRA) has recently published its annual forecast projecting a marked growth in hotel occupancy revenues of 8% over the coming year; all of which goes a long way to vindicate the strategic importance Red Ribbon has already given its Eco Hotels project as part of the company’s dynamic investment programme.
Red Ribbon first invested in Eco Hotels in 2012 and the Project has characteristically delivered both on bottom line profits for investors and for the environment: one of the first of the Eco Hotel’s (built in Kochi), for example, has solar tubing that reflects light across the building so as to reduce energy overheads. It’s a good example of how Red Ribbon’s Mainstream Impact Investment strategies work in practice; building a sustainable, long-term business that works long term as part of its community and the wider society because it is resilient and profitable.
But it is also encouraging to hear that Prime Minister Modi’s Government has been thinking laterally about India’s hospitality sector as well. Not everybody coming to India from overseas will arrive by air; many will – literally - come from over the seas.
The Ministries of Shipping and Tourism announced last month that they will in future be working together on an Action Plan to promote India as a Cruise Tourism destination and at the same time developing an ecosystem model for the growth of cruise tourism in India. As the first step in the process, a Governmental workshop was also organised last month by the Ministry of Shipping in Delhi so as to discuss an ‘Action Plan for Development of Cruise Tourism in India’.
Speaking at the opening of the workshop, Nitin Gadkari, Union Minister for Shipping, Road Transport and Highways said that Cruise Tourism is one of the fastest growing components of the leisure industry worldwide and can become a major growth driver for the Indian economy through generating new employment opportunities in the sector; and it is difficult to disagree with him because India has the potential to cater for at least seven hundred cruise ships each year; compare that with the one hundred and fifty eight this year so far; and the cruise industry can generate more than 2.5 lakh jobs for ten lakh cruise passengers providing an additional boost to the economy at large.
Cruise terminals are already being developed at five major ports: Mumbai, Goa, Cochin, Mangalore and Chennai; added to which inland waterways will also be developed over the coming years to add to the available infrastructure network: ten inland waterways will be added on the subcontinent by the end of this year alone.
Read about Eco Hotels here: (www.theeco.com/about_us.php).
Read about Red Ribbon Asset Management here: (www.redribbon.co/)
Read about the Indian Government’s Plan to Promote Cruise Tourism here: (www.livemint.com › Politics › Policy)