Context:

• The Himachal Pradesh Cabinet has recently approved the Himachal Pradesh Homestays Rules, 2024 which is a significant step aimed at regulating the burgeoning homestay industry in the state.

Key Points:

• This decision follows recommendations from a sub-committee led by Industries Minister Harshwardhan Chauhan, which was formed to address issues related to the illegal operation of homestays and the misuse of land ownership regulations. The new rules are designed to enhance tourism, ensure compliance with existing laws, and protect local interests.
• Himachal Pradesh has seen a rapid increase in homestays, particularly in areas popular with tourists. While these accommodations offer unique experiences for visitors, many operate without proper registration and oversight, leading to concerns about tax evasion and unfair competition with registered hotels.
• The original Homestay Scheme, introduced in 2008, aimed to promote self-employment among locals and provide tourists with authentic experiences. However, the rise of unregulated units has prompted the government to reevaluate its approach.

Key features of the new Himachal Pradesh Homestays Rules

Mandatory Registration

• One of the primary objectives of the new rules is to enforce mandatory registration for all homestay operators. This measure aims to curb the proliferation of unregistered units that evade taxes and regulatory oversight.
• The registration process will involve a fee structure that varies between rural and urban homestays, reflecting their differing operational costs and market dynamics.

Focus on local operators

• The rules prioritize bonafide Himachalis in operating homestays.
• This preference aims to ensure that local residents benefit from tourism-related opportunities while preventing non-residents from exploiting land purchased under relaxed regulations for commercial purposes.
• Specifically, individuals who have acquired land for residential purposes under Section 118 of the Himachal Pradesh Tenancy and Land Reforms Act will not be allowed to operate homestays.

Increased fees and Utility Charges

• The new policy will introduce increased registration fees for homestays, alongside mandatory payment of commercial rates for utilities such as electricity and water.
• Previously, many homestay operators benefitted from domestic rates, which created an uneven playing field compared to registered hotels. The government aims to ensure that all operators contribute fairly to local revenue.

Regulatory oversight

• District tourism officers will now play a crucial role in inspecting homestays and setting rental rates based on amenities and services offered.
• This regulatory oversight is intended to standardize pricing across the sector and prevent inflated rates that could deter tourists.
• Additionally, operators will be required to implement proper waste management systems and encourage sustainable practices like rainwater harvesting.

Addressing illegal operations

• The introduction of these rules directly addresses concerns regarding illegal homestays operating in violation of Section 118. The government has received numerous complaints about such units, prompting a need for stricter enforcement measures.
• The new regulations will empower authorities to take action against offenders, ensuring compliance with land use laws designed to protect local communities.