GANGTOK, : The Sikkim Hotel and Restaurant Association (SHRA), along with other
tourism stakeholders associations, including the PTDA, RTDC, and NTDCS, has
jointly submitted a representation to the Tourism & Civil Aviation department,
requesting the rollback of the recently mandated Rs.
50
Sustainable Tourism Development Fund (STDF) collection through hotels and
homestays.
In
their submission dated March 20, the tourism stakeholders highlighted several
practical, legal, and compliance challenges associated with implementing the
mandate, which requires hotels and homestays to collect the fee from guests at
check-in.
While
expressing their support for the government's efforts to promote sustainable
tourism, the associations argued that the current collection method would
create numerous operational difficulties for the hospitality sector.
“We
are not against the collection of the Sustainable Tourism Development Fund.
However, hotels and homestays cannot collect this fund for the department
because of various implementation hassles,” expressed the representatives.
The
stakeholders emphasized that if hotels mix the STDF fee with the guest bill or
deposit it into their bank accounts, it could inadvertently attract GST and
income tax, leading to unnecessary taxation on a government-mandated charge.
This could create confusion and disrupt accounting processes.
Many
hotels and homestays in Sikkim remain unregistered with the Tourism Department.
As a result, only compliant establishments would bear the enforcement burden, while unregistered properties could bypass the fee
collection, leading to unfair competition and revenue leakage.
The
operational challenges includes, hotels and homestays in remote locations with
unreliable electricity and internet connectivity would face significant
logistical hurdles, during large group check-ins (e.g., weddings or tour
groups), verifying individual payments would cause delays, guest
dissatisfaction, and operational inefficiencies, and smaller properties with
minimal staff and basic facilities would struggle to implement the fee
collection effectively.
The
associations warned that without strict enforcement, some properties might
collect the fee without remitting it, leading to revenue leakage and potential
fraud. Additionally, verifying whether every tourist check-in has been reported
would require costly and cumbersome compliance audits.
The
stakeholders cautioned that imposing an additional charge at check-in could
lead to guest resistance, particularly among those booking through online travel
agencies (OTAs) or corporate packages.
Guests
might perceive the fee as an "extra charge," generating negative
publicity for Sikkim's tourism industry and potentially deterring future
visitors. Hotels may be forced to pay the fee on behalf of guests who refuse,
creating financial and operational burdens, it was submitted.
Many
hotels use Property Management Systems (PMS) and booking software, and
integrating the department's fee collection system would require technical
changes, additional costs, and staff training. This would be particularly
challenging for small and mid-sized hotels operating on manual or semi-digital
systems.
The associations expressed that both hotels and the Tourism department would require additional manpower for fee collection verification, dispute resolution, and reporting, increasing administrative costs.
To
address these challenges, the stakeholders proposed alternative methods for
collecting the Sustainable Tourism Development Fund.
Fee Collection at Entry Points: They suggested
placing QR codes at major entry points to Sikkim, such as Rangpo, Jorethang,
and Melli, enabling tourists to pay the fee directly to the department's
account upon entry. QR codes could also be displayed in tourist vehicles, with
drivers informing passengers about the payment. This method would ensure
uniform compliance and reduce the risk of revenue leakage.
Integration with Entry Permits for Major Tourist Destinations: Instead of collecting the fee at hotels, they proposed integrating the charge into the entry permit fees for popular attractions such as North Sikkim, Tsomgo Lake, Nathula Pass, Namchi Char Dham, Pelling Skywalk, Buddha Park, and the Ropeway. This approach would ensure that tourists visiting key destinations contribute directly to tourism development without adding administrative burdens on hotels.
The
SHRA and other tourism associations urged the Tourism department to reconsider
the implementation strategy and engage in discussions with industry
stakeholders to create a practical and fair system that supports sustainable
tourism without imposing undue burdens on the hospitality sector.
