Hotel industry has been heavily overburdened with government duties and taxes, which was restricting its growth and forcing people to pay high rent for a room, hence the government should reduce the number of taxes to give much needed relief to this vital sector.
Nadeem Qadir, Holiday Inn Lahore General Manager, said this in an interview with Business Recorder.
In addition to Sales Tax, around eight taxes were levied on room charges, and a client has to pay 25 percent extra in form of various duties and taxes levied on room charges, he said.
He observed that the rate of taxes varied between the provinces, thus it would be appropriate to have uniformity in taxes within the country.
He claimed that small hotels were cheating the government by not paying all the taxes through issuing rent bills on 'plain paper', because they could not afford high taxation. "Hence, it would be a more rationale step to abolish all taxes, apart from the Sale Tax, on the hotel industry and increase taxpayer net, which would ultimately enhance the government revenue. High electricity tariff was another factor that was effecting their running costs, which needs to be rationalised," he added.
He was of the view that a four-member committee should be formed, so that it could prepare proposals on behalf of the hotel industry.
The members of the committee should be selected from the private sector, representing five major cities of the country, and they should be professionals, he added.
According to him, for the last 10 years, the hotel industry has been on the decline due to decay in international tourism and absence of local tourism. Hence the hotel occupancy rate has dropped, on average, by 15 percent.
Although, they have shifted their focus on corporate and business clients, but due to recession corporate clients were using less of hotels for their business activities, this has forced many hotels to reduce their charges and were running on nominal profits.
Nadeem blamed the government for failing to promote tourism sector in the country and added that this lone factor has effected the growth of the hotel industry. He pointed out that there was abundance of historical places in Lahore that would attract local tourists, but the tourism department has done nothing to promote such sites, they were only interested in northern areas.
He noted that in India tourist-attraction spots were handed over to hotels, but in Pakistan no such incentives were given to Pakistani hotels. He also noted that the Pakistani hotel industry was not based on tourism, although it was a universal truth that tourism was fuel to hotels' growth.
"However, the commencement of Indo-Pak dialogue has given a hope to the local hotel industry, as the flow of Indian visitors has improved and during the Indo-Pak cricket series Pakistan witnessed the highest flow of tourists in 15 years and all the hotels in Lahore were jam packed.
It was also pleasing to note that the high profile Indian visitors appreciated the services provided by big hotels, which proved that our hotels were running on international standards," he added.
He admitted the fact that room shortage was a problem in the provincial capital, which was witnessed due to influx of Indian visitors in the recent past. In the next three years, three top hotels, including Sheraton and Serena, would be constructed in Lahore, while Holiday Inn would also planning to open an inter-continental hotel in Gulberg or Cantonment, Lahore.
To a question, he said that there was no proper institution on hotel and catering of international standard in Pakistan, thus there was a shortage of manpower in this sector. At present majority of hotel personnel were trained at their workplaces and the existing manpower in the Pakistani top hotels was the finest in the world, he claimed.
He observed that after the opening of new hotels in near future the supply of skilled manpower would further deteriorate, thus he suggested that the government should give incentives to the private sector to open hotel and catering institutions of international standard, so that skilled manpower deficit could be met.
Nadeem disclosed that they were planning for the expansion of Holiday Inn in near future and in the last two years, his hotel has improved and competing with other five star hotels. He averred that they have beaten their competitors in term of room occupancy and room charges.
He said they believed in 'in-house advertisement', by pleasing their customers through extraordinary services, as they would recommend others to visit their hotel as well.
"Our motto is to provide excellent services to our customers by maintaining property and quality of food of international standards and pampering guests," he added.