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Make Goa An Affordable Tourist Destination

Goa has seen a 30 per cent drop in tourist arrivals during the Christmas season, according to the hospitality industry. The occupancy in many middle and higher grade hotels during the second half of December is reported to be mere 32 per cent as compared to 60 per cent last year. According to industry sources, the smallest hotels have been least affected and the luxury hotels the most. The huge drop in tourist arrivals has surprised the managements of starred hotels that, barring a few, had kept room tariffs quite reasonable in view of their past experience and fearing uncertainty in view of implementation of GST (Goods and Service Tax) regime, higher airfares and other factors. The fall has prompted the hotels that used to make a killing during the peak season, to offer discounts ranging between 25 per cent and 46 per cent. This is in contrast to past years when hoteliers would sell rooms for a premium at this time of the year. Goa has nearly 3,400 hotels having around 32,000 rooms and around 56,000 beds. Nearly one fifth of the total hotel beds are in the luxury hotel segment.

The hotel industry blames GST as the main reason for drop in room occupancy. Hotels charging room tariffs above Rs 7,500 are taxed at 28 per cent and those charging between 2,500 and 7,500 at 18 per cent. Corporate houses are not giving significant salary hikes to employees following demonetization and implementation of GST. Airfares are also very high in the aftermath of the harsh economic measures. Another reason for drop in hotel occupancy is that Goa is no more a preferred wedding destination. Each wedding event would attract hundreds of guests adding to the occupancy of rooms. The moving out of weddings to Malaysia, Thailand, Indonesia and other South East Asian countries has also been blamed upon GST. The taxation rate in the countries with the new wedding destinations is low, usually four per cent. Besides, the airlines operating in the sectors spanning those destinations offer attractive air fares which are easily bagged up by the clients. The airlines do not offer attractive air fares to passengers in the peak season. In fact, they take it to the highest
level.

The decline in tourist arrivals has forced even starred hotels to list their rooms on travel planner websites offering heavy discounts in a bid to boost occupancy. Starred hotels are giving heavy discounts to gain occupancy. The woes of the hoteliers have been compounded by costlier taxi services and high costs of food and beverage services. According to the buzz in the hotel industry linking of Aadhar card to bank accounts is also seen as a dampener as people feel that the government could monitor their spending and act against them. Though the travel industry is yet to come out with average stay in number of days of domestic tourists in the state, there is a rough estimate by the industry that the figures have fallen from average five days to three or four days. The industry and the tourism department can only hope that the situation improves ahead of the New Year festivities and the Timeout EDM festival. The saving grace for the state hotel industry has been the charter flights and foreign tourists who have been coming regularly and in greater numbers. The e-visa facilitation centre at the Dabolim airport has proved helpful for foreign tourists.

Though the hotel industry had not felt the pangs of demonetization as it was announced just weeks ahead of the peak season, it has been hit hard by the high taxation rates under GST regime. Given the fact that the tourism sector is a major contributor to the state economy, the state government needs to take proactive measures in collaboration with the central authorities to get the taxation rates reduced to a reasonable limit and make Goa competitive with other tourist destinations. Any delay in mitigating the adverse impact will have adverse impact on its economy and employment. The government can play the role of facilitator in this respect by easing tax rates, expeditiously finalizing the tourism master plan and developing infrastructure. The stakeholders in the tourism sector – hoteliers, airlines, taxi owners and government – should sit across the table and work out measures to make Goa an affordable tourist destination so as to ensure continuous flow of tourists round the year. One of the reasons for lower hotel occupancy is said to growing preference of the average tourist for homestays. That makes the case of reducing the prices of hotel rooms and other services stronger.

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