Himachal Pradesh to Revamp Homestay Regulations with New Rules in 2024

The Himachal Pradesh government is gearing up to introduce new regulations for homestays with the upcoming Homestay Rules-2024. These changes are aimed at addressing concerns over the misuse of the Homestay Scheme and ensuring fair competition with the hotel industry. The Cabinet Sub-Committee, which has been working on these new rules, will present its recommendations at the next Cabinet meeting on August 8, 2024.

One of the key proposals is to impose the same tax on homestays in urban areas as is levied on hotels. This move is intended to level the playing field, as many homestays currently operate like hotels but don’t pay the same taxes. The committee believes that this unfair advantage undermines legitimate hotel businesses that comply with all tax obligations. The original intent of the Homestay Scheme was to promote self-employment in rural areas and offer tourists a chance to experience traditional local hospitality. However, some operators are exploiting the scheme, effectively running hotel-like businesses without paying the equivalent taxes.

The new rules also propose revoking the licenses of homestays operating on leased properties. Currently, around 60 percent of the 4000-plus registered homestays in the state are on lease. The existing Homestay Rules-2008 mandate that the licensee must operate the homestay and reside in the same building. The committee also recommends shutting down over 1,000 plus unregistered homestays and bed and breakfast (B&B) units operating illegally. Other proposed changes include reducing the license period from five years to two years, closing homestays run by individuals from outside the state, and increasing registration and renewal fees.

To boost government revenue, a cess on homestays based on the facilities offered is also under consideration. Additionally, there is a proposal to bring B&B units under the jurisdiction of the Tourism Department. These impending decisions have sparked a mix of concern and anticipation among stakeholders. Homestay operators, particularly those running legitimate businesses, fear the additional financial burden and stricter regulations. On the other hand, hotel owners welcome the move, hoping it will level the playing field and curb unfair competition.

By taking these measures, the Himachal Pradesh government aims to foster a safer and more supportive environment for both tourists and local businesses.