One year after the rollout of GST 2.0, the ₹7,500 room-rate threshold has emerged as a more visible consideration for hotel guests comparing prices, although factors such as location, purpose of travel and overall room rates continue to play a larger role in booking decisions, according to the hotel industry.
The revised GST regime, which came into effect on September 22, 2025, lowered the GST rate on hotel rooms priced at ₹7,500 and below to 5%.
The reduction has lowered the tax component in the final bill for customers staying in this price band.
Commercial Head, ibis & ibis Styles India, economy hotel brands owned by the global hospitality group Accor, said the lower tax rate has made the difference more visible to customers while comparing hotel prices. The ₹7,500 mark has also become a price point that guests are more conscious of during the booking process.
However, he said GST is not the only factor determining where consumers choose to stay. Location, room availability, purpose of travel and the overall room rate continue to influence booking decisions.
“For a brand like ibis, which has a strong domestic customer base, value remains important, particularly when people are travelling with families or taking shorter breaks,” he said.
The GST change has also not resulted in a noticeable shift in travel plans or stay duration, according to him. The company has not seen guests systematically shortening stays or moving to lower-priced rooms because of the tax change.
“People generally decide to travel first and then work out where they want to stay and what they want to spend,” he said.
While the lower GST rate has made the sub-₹7,500 room category more competitive at the booking stage, it has not necessarily translated into lower spending on other hotel services. Dining, meetings and other services continue to form part of the overall spend depending on the purpose of the visit.
Demand continues across corporate, leisure and meetings, incentives, conferences and exhibitions (MICE) segments, he said, adding that it is still too early to conclude that GST 2.0 has fundamentally changed guest behaviour or overall hotel demand.
The one-year mark, however, highlights how taxation has become another consideration in hotel price comparisons, particularly for consumers looking at room rates around the ₹7,500 threshold.
