The Karnataka state government has decided to accord industry status to the hotel business.The Minister of Tourism, C.P. Yogeeshwara, announced this will allow hotels in the tourism sector to benefit from industry subsidies and levies.

Earlier,hotels have historically been regarded as commercial and not industrial establishments.

Yogeeshwara said the move, approved by the Cabinet, will provide a boost to the Covid-hit tourism sector.

“The pandemic wreaked havoc on the sector. Establishments that depended on tourism took a big hit. There’s a need to rejuvenate them,” he said. 

“Hotels were being set up on commercial rates. Now that they will be considered as an industry, the taxes and other levies will be reduced,” he said, adding that 62 hotels that have star classification will come under this to begin with. “Small-scale hotels will not come under this. We’re planning to come out with a separate scheme for them,” he added.

According to T K Anil Kumar, chief secretary of tourism, only 62 Karnataka hotels have the Ministry of Tourism's star official designation.

A long-term demand has increased in the aftermath of the pandemic for the classification of the hotel sector as a business. That is a step towards the development of the tourism sector since Karnataka remains behind states like Kerala and Gujarat.