GST Council Announces Tax Rates for Hotels and Restaurants under the Goods & Services Tax (GST) Bill in India

Last week, the Goods and Services Council finalized different GST rates for hotels and restaurants in India, based on their daily room tariffs and annual turnovers. As per the council, the different tax rates will fall under rate brackets of – below INR1,000; INR1,000 to INR2,500; INR2,500 to INR5,000; and INR5,000 and above. Hotels with daily tariffs below INR1,000 will be exempted from GST; those with rates between INR1,000 and INR2,500 will be taxed at 12 per cent, while tariffs between INR2,500 and INR5,000 will attract 18 per cent tax. Hotels with daily tariffs above INR5,000 will be classified as luxury offerings and will be taxed at 28 per cent. However, GST will be charged on actual tariffs and not on published tariffs. In the case of restaurants, those with an annual turnover of less than INR5,000,000 will be taxed at 5 per cent, while non-AC restaurants will be taxed at 12 per cent. Restaurants with air conditioning and liquor licenses will be charged at 18 per cent, while restaurants in Five-Star and Luxury Hotels will be taxed at 28 per cent. The GST rates will be applicable from 1 July, 2017.

InterContinental Hotel in Sydney Sells for A$140 Million

Singapore’s Royal Group has recently agreed to sell the InterContinental Sydney Double Bay for A$140 million to Chinese investors – Shanghai United Real Estate Inc. and Zobon Real Estate Group Co. Ltd. The hotel occupies over 3,670 square meters in the precinct of Double Bay and the expected sale of this 140-key hotel is said to have set a record high price for non-central business district hotels in Australia.  Royal Group had previously paid about A$60 million for the vacant property in 2013, and had spent millions of dollars in renovating and refurbishing the property before reopening it as an Intercontinental Hotel. InterContinental Hotels Group will continue to manage the Double Bay hotel, which remains open for business as usual.

ONYX Hospitality Group Debuts in Malaysia

ONYX Hospitality Group recently announced the opening of its first property in Malaysia – the Amari Johor Bahru, in the country’s southern gateway city. The 242-room hotel is located in the heart of the city and is surrounded by convention and retail spaces, such as the Persada Convention Centre, Komtar JBCC and City Square shopping malls. The hotel is also within walking distance of the upcoming Mass Rapid Transit (MRT) system, which will link Johor Bahru to Singapore, and is only a 30-minute drive from Senai International Airport and approximately 80-minute drive from Singapore’s Changi Airport.  The hotel will provide a range of services and facilities, such as the Breeze Spa, Amaya Food Gallery, Amaya Café, a ballroom, an outdoor terrace that can accommodate up to 600 people, and a spacious lobby area featuring a library, an Idea Room and a lounge.

Singaporean Property Firm to Expand Hotel Business

Singapore-based property firm, Heeton Holdings is looking to expand the group’s hospitality business, as part of its diversification strategy, by rolling out its Luma brand hotels to new markets across the globe. Heeton Holdings, along with three other consortium partners, opened the first Luma Concept Hotel in London last month. The group has a 60 per cent stake in the joint venture. The 89-key hotel is the eighth property owned by the Heeton-led consortium, and is part of a portfolio that comprises 1,048 rooms in Japan, Britain and Thailand. Two more hotels are in the pipeline – in Fortitude Valley in Brisbane, Australia, and in Leeds, Britain. The firm entered the hospitality sector in 2011 and has expanded rapidly since then. Last year, they acquired three properties – ibis Hotel Gloucester and Holiday Inn Express Hotel Manchester City Centre in Britain, and a hotel building in Sapporo City, Japan.

Hotel Openings in India This Week

Royal Orchid Hotels Ltd. announced the opening of its third hotel in Mysore, Karnataka. Located approximately 14 kilometers north of Mysore Airport, the Regenta Central Herald features 70 rooms, a restaurant, a bar and a fitness center. Mysore is the third largest city in Karnataka, and is known for its monuments, palaces and places of historical interest.

Ginger Hotels announced the opening of two hotels in Ahmedabad, Gujarat – the Ginger Hotel Ahmedabad S.G. Highway and the Ginger Hotel Satellite. The two hotels, located approximately 17 kilometers east of Ahmedabad’s Sardar Vallabhbhai Patel International Airport, have a combined inventory of 80 rooms, with the Ginger Hotel Ahmedabad S.G. Highway featuring 44 rooms and the Ginger Hotel Satellite featuring 36 rooms. Both hotels also have a multi cuisine restaurant. Ahmedabad, the largest city in Gujarat, has emerged as a major economic and industrial hub, and is the second largest producer of cotton in India.
 

Absolute Share Price Performance, as on 26 May 2017