Illegal homestays mushroom, eating into revenue of Kangra hotels

Hoteliers in the Kangra region have urged the state government to take action against illegal homestays that are eating into their revenue. The demand for action against illegal homestays is getting stronger due to the reduced tourist footfall in the state.

Though the government has announced policy changes to regulate homestays in the state, no rules have been put in place to check the mushrooming of illegal homestays in the region. Sources say that only 450 homestays are registered with the Tourism Department in Kangra district, but over 1,000 are illegally operating and offering rooms to tourists online.

The president of the Kangra Hotel and Restaurant association, Ashwani Bamba, says that registered hotels are paying various types of taxes, including the Goods and Services Tax (GST), property tax in urban areas, commercial power tax and excise to the state government, besides the fees to the Pollution Control Board and the Tourism Department. “The hotel industry is facing an unhealthy competition from illegal homestays that are not paying any taxes and offer rooms to tourists at low rates. We have requested the state government to impose equal taxes on homestays to ensure a level-playing field for registered hotels and homestays,” he adds.

Sanjeev Gandhi, general secretary of the Smart City Dharamsala Hotel and Restaurant Association, says that many illegal homestays are functioning in the vicinity of Dharamsala. Though the state tourism policy allows just four rooms under the homestay scheme, some people are offering up to 20 to 25 rooms through online platforms, he adds. Besides offering rooms, the owners of illegal homestays are also running restaurants, he alleges.

“We have requested the state government to check the activities of such homestays and levy equal taxes on them,” he says.

District Tourism Officer Vinay Dhiman says that there are about 450 registered homestays in Kangra district. “Until and unless a specific complaint is made, the officials of the Tourism Department have no authority to enter and check private premises where these homestays are operating. Whenever we receive a complaint regarding an illegal homestay, we take action.”

However, many people have converted their entire houses into homestays, which is illegal as per the rules of the Tourism Department.