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Hotel Industry of India to Lose Half of Revenues Due to Liquor Ban

News The recent ban of the Indian government on the sale of alcohol in all shops, bars, and restaurants along national and state highways will seriously affect both food and beverage and hospitality industries of the country. According to Kapil Chopra, President of The Oberoi Group, the food and beverage departments will lose as much as half of their revenue because of the new ban.

The data provided by Hotel and Restaurant Associations of India only proves this devastating forecast. The US$60 billion industry is expected to lose nearly US$30 billion by following the order of the Supreme Court, which prohibits any sale of alcohol within 500 meters from state and national highways. The ban applies to shops, hotels, restaurants and bars. The initial order was made by the court on December 15, 2016. Later, the order was modified and changed to 220 meters away from highways in case a town’s population is below 20,000 people. Naturally, hoteliers are very concerned by this new rule. Alcohol shops are usually about 300*500 square feet as Chopra mentions, so they can be moved further from highways to meet the new requirements. However, that won’t work with hotels as there are millions of dollars invested into their infrastructure.

Without a doubt, the decision will affect travel industry of India. The government will end up losing Rs 1 lakh crore as well as a result of smaller revenue from sales tax, luxury tax, and sale of licenses. As tourism is one of the largest job creators in the country, such a step may affect ordinary people as around 1 million employees can lose their jobs because of the court’s decision. Currently, the hospitality industry representatives plan to meet the government, including Mahesh Sharma, Tourism Minister of India, to discuss the situation.


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