OK . . . my next post will be from Jennifer. In the meantime, I just learned something I had never heard about before, and it’s worth a mention. Before booking a hotel online, I called them to ask how much the taxes would be on the room. I would have gotten a deep discount (2/3 off the rack rate) for last minute booking, but the taxes were almost as much as the room price I’d be paying! When I asked how that could be, the manager informed me that the government taxes the rack rate and not the actual rate that the guest pays! Anyway, it made the room too expensive, so I didn’t book. Curiously, even though it’s also heavily discounted, the place I’m staying now has a higher base rate and a much lower tax rate, making it cheaper overall.

Let me give an example: if you get a Rs6,000 room for Rs2,000 that has a tax rate of 20%, you would pay Rs 1,200 in tax, or 60% of the actual room rent! That’s something to think about. You may still be getting a bargain, but it’s a lot less of one than you might have imagined.

I had never encountered such a huge difference from the expected tax, so I called a travel agent friend to find out if this is the reality. He told me that it is. The government actually charges tax on the rack rate, no matter how much less the actual rate is. So, when booking a hotel, you may want to ask how much the taxes will be, or you may be in for an unpleasant surprise when you get your bill.

I’m not staying at the Imperial, as it’s way over my budget right now; but I needed a photo for this post, so here it is. The Imperial in Delhi is one of India’s best hotels. As far as Delhi goes, I’d say it is the best. It’s an oasis right in the heart of Delhi. Photo credit: Nicolas Fleury (Creative Commons)

Presumably, the government does this because they expect hotel owners to cheat on reporting their income. Well, many do, but still . . .


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