Homestay Rules-2024: Key changes and their implications for homestay operators

Diary Times News Service

Shimla, August 5: The Himachal Pradesh government is set to implement significant changes in the regulation of homestays with the upcoming Homestay Rules-2024. These changes are aimed at addressing growing concerns over misuse of the homestay scheme and ensuring fair competition with the hotel industry. The cabinet sub-committee formed to draft these new rules will submit its recommendations in the next cabinet meeting to be held on August 8, 2024.

A key proposal is to impose the same tax as is levied on hotels on homestays operating in urban areas. The move is aimed at preventing unfair competition posed by homestays that operate like hotels without paying the same tax. The committee believes that many homestays are undermining the work of legitimate hotel businesses that comply with all tax obligations. The original objective of the homestay scheme was to promote self-employment in rural areas, giving tourists a chance to experience traditional local hospitality. However, some operators are taking advantage of the scheme and running hotel-like businesses without paying the same tax.

Besides, the new rules propose to cancel licences of homestays operating on leased properties. Currently, about 60 per cent of the 4,146 registered homestays in the state are leased. As per the existing Homestay Rules-2008, the licensee must operate the homestay and live in the same building. The committee has also recommended the closure of over 1,000 unregistered homestays and bed and breakfast (B&B) units operating illegally. The proposed changes include reducing the licence period from five years to two years, closing down homestays run by persons from outside the state, and increasing registration and renewal fees.

To increase government revenue, levying a cess on homestays based on the facilities offered is also being considered. Besides, it is proposed to bring B&B units under the jurisdiction of the tourism department. These impending decisions have created a mix of anxiety and anticipation among stakeholders. Homestay operators, especially those running legitimate businesses, fear additional financial burden and stricter regulations. Hotel owners, on the other hand, welcome the move, hoping it will level the playing field and curb unfair competition.

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