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Tourism industry in a rather unprecedented move informed the State government that nothing will be achieved by merely spending money on promotion, but needs to market Goa more wisely. Giving incentives to operators and analysing where holiday-makers of source market travel, will help in bringing more foreign tourists. Karan Sehgal explores the situation
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Pic Credit: Sagun Gawade
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In a rather unprecedented move, the Travel and Tourism Association of Goa (TTAG) has urged the State government not to increase the allocation for tourism sector in the upcoming budget.
The question is why? The stakeholders maintain that the number of foreign travellers in Goa has stagnated in the last five years. This happened when the State government spent more money on promoting tourism of-late.
Clearly, the money spent hasn’t achieved the desired results. And, the situation doesn’t seem to improve. Russian currency, Ruble, continues to depreciate vis-Ã -vis US Dollar making it more and more expensive for Russians to travel.
These events started with Russia-Ukraine crisis in 2014 and by now they have manifested completely. The official numbers indicate that Russians formed 29% of total foreign tourists in 2014 in Goa, but tourism sources say that Russia’s contribution to overall foreign tourists is much higher.
While the market has done a complete U-turn, the State government’s approach towards marketing hasn’t changed much. That’s where the TTAG stepped in to advise the government to spend the money more wisely.
One of the suggestions was to divert the spending on road shows which are not Goa-centric to incentives for operators who bring foreign tourists. Francisco de Braganca, president, TTAG, said, “The stagnation in the number of foreign tourist arrivals in the last couple of years clearly indicates that many road shows have not had any effect on the inflow of tourism.”
De Braganca continued, “The tourism department and the delegations that attend such road-shows have no expertise at all in marketing a destination. Secondly, there is no inventory of products, rooms and services at the disposal of the tourism department for display at these shows.”
Road-shows and travel marts are important but only if the State government can link that promotion with other things like accommodation and activities that tourists can do in Goa. In the absence of which, there is not much benefit out of such promotion.
Ralph de Sousa, chairman of de Souza Group, said, “The State government can give brochure support to some of the tour operators, which means sharing a part of their cost of marketing Goa to their clients. Such operators deal in huge numbers. One such operator can bring 25 flights in six months of foreign travellers.”
De Sousa continued, “All competing destinations including Egypt, Maldives, Thailand, Sri Lanka are giving such incentives. Even Kerala government gives 15 dollars per foreign tourist to tour operators.”
The tourism market in Goa has changed rapidly in the last two years. On one hand, new 5-star hotels like Novotel, Hyatt Place and Grand Mercure have entered the tourism space. On the other hand, Russian market has shown immense challenges and the world economy too is unable to recover from the slowdown.
5-star hotels are able to face the situation because they have huge marketing networks in the form of branch offices around the world. So, for them spreading word isn’t a big challenge. But, 2-star, 3-star and 4-star hotels are facing the heat.
The State government will have to fine-tune its strategies to adapt to changing conditions. The government will have to be very shrewd to analyse how to get benefit out of every penny spent on promotion.
De Braganca said, “We should no doubt go to the big trade fairs in London, Berlin, Moscow and Dubai, where the entire travel and tourism trade converges. But, we will not get large enough numbers from Australia and the US, which have much better beaches and infrastructure.”
The US has a long coast-line and as a result American tourists prefer to go to beaches within the country. Moreover, Caribbean islands offer them great chance to visit beaches if they want to head out of the US.
Same is the case with Australians as they can go to Bali in case they want to go to a beach. De Braganca continued, “It is pointless wasting our time and money on marketing to Australia and the US.”
In the last two years, Goa’s connectivity to Middle-East has improved a lot. There are direct scheduled flights to Goa from Dubai, Sharjah, Abu Dhabi, Oman and Qatar. De Sousa said, “We have to advertise in in-flight magazines of these airlines, which have direct flights to various parts of Middle-East.”
De Braganca supported it by saying, “The gulf is an untapped market, but it travels and takes a holiday during the months of monsoon which we consider off-peak season, when we have no sun, no sand, no beaches and no activity levels.”
TTAG has even requested the State government not to increase taxation for the tourism sector. As of now, the sector is saddled with a number of taxes. There’s a value-added-tax (VAT) of 12.5%, a luxury tax of 8%, a service tax of 14.5%, which put together amounts to 35%. Over and above this, there are municipality and panchayat taxes.
And, finally if you make money, you will have to pay 35% income tax. The tourism industry has to recover all indirect taxes from the tourist. Goa has one of the highest tax rates for tourism in India. Such high tax incidence is bad for tourism trade and bad for tourists.
High taxes result in more people not paying taxes. Unorganised players in tourism are in plenty in Goa. A source who didn’t wish to be named said, “Unorganised players laugh at people like us who pay taxes.”
Rationalising tax rates isn’t easy and requires a lot of political will, but still, the State government can do a lot by just marketing Goa more wisely. For instance, sometime back, a company from Sweden had cancelled charter flights due to visa related issues.
Now Swedish tourists can avail of e-visa facility. There’s a need to sensitise tourism industry in Sweden that now it is no longer difficult to visit Goa from visa viewpoint.
The current tourism season is going to be a watershed event in Goa’s tourism. A lot depends upon the State government helping the industry in getting more foreign tourists. If it fails to do so, it will have a far-reaching impact on Goa as an international tourism destination.
