While othersectors are alarmed at a weakening rupee, Goa’s famed tourism industry hasreasons to celebrate. Though the cost of travelling abroad has increased by 20per cent, the number of tourists expected to visit the state is expected torise by 15 per cent. The Tourism Department of Goa expects 28 lakh tourists tovisit the state in 2012 rise from 26.8 lakh in 2010.
Theappreciation of the dollar has also resulted in a rise in the number ofcancellations of overseas trips in the past few months. An official at a leadingtravel agency said “Yes there have been cancellations for overseas travel. Butthe number of travellers opting for domestic destinations has increased substantially.”
Anotheradvantage for Goa’s tourism industry is the reduction in the cost of AirTurbine Fuel (ATF) by Chief Minister Manohar Parrikar in his Budget of 2012-13.Ralph de Souza, chairman of the De Souza group said, “If airlines want to cut thenumber of flights, they will do so in other sectors but not to Goa.” He goes onto explain, “The cost of refuelling in Goa is much cheaper. This helps createmore seats for Goa as the state becomes less expensive than other places. Thecut has neutralised the central government impact, which would have otherwiseseen a drop in tourism by 10 per cent. In this tourist season we will see anincrease of 15 per cent.”
The cut intax on luxury items adds to the goody bag. “Luxury tax has been cut by morethan 50 per cent, bringing it down to 5 per cent. This will directly impact therates that hotels are offering to clients from May to September,” said SwapnilNaik, Director of the Tourism Department. Contracts with foreign agencies forvarious packages offered by hotels in Goa, are in dollars. Hotels are thereforeexpected to benefit from the dollar rise. Pavithran Nambiar, General Manager ofGoa Mariott Resort and Spa said, “We have had a strong year since January.However we cannot quantify if this is due to the impact of the falling rupee.Though, it may be a contributing factor. But, there is no way for us todetermine if our increase in bookings is based on the dollar.”
Thedepreciating rupee will impact the prices of imported goods also. One may see amarginal increase in the cost of dining in restaurants and eateries that useimported ingredients. Pavithran however said, “Menu pricing is driven not somuch by cost but by market factors and supply demand equations. Cost is asecondary determinant of price. But, if cost increases there will be pressureto hike prices.” The dollar and the budget of2012-13 is what Goa’s tourism industry is depending on.
