PANJIM: The increased taxation levied on the hospitality sector by the Laxmikant Parsekar government in the 2016-17 Budget will burn a hole in the pockets of visitors vacationing in Goa.
The proposals approved on the floor of the House include an increase in taxes on alcohol, travel and hotel bookings, leading to the tourism industry expressing serious concerns against the backdrop of falling footfalls.
They argue that the rise in hotel room and restaurant bills, besides other tourism-related services from August 2016, a little before the beginning of tourist season, could severely impact tourism. Travel and Tourism Association of Goa (TTAG) fears that this could dampen the mood of tourists enjoying or seeking to extend their vacation in Goa as the State is already an expensive destination. Tourism has become the largest contributor to the Goan economy after mining operations were banned in 2012, but TTAG President Francisco de Braganca alleges a step-motherly treatment to the sector.
“The tourism industry which is the backbone of our economy – after the collapse of mining – is being given step-motherly treatment,” he told Herald. “Tourist arrivals will be affected by the increase in taxes on various heads especially in the off season,” he added. Besides taxes, Braganca pointed out that competing destinations are gaining an upper hand by giving huge incentives to tour operators and airlines to fly to their countries.
Another TTAG official claimed that an impact on the overall arrivals would be seen at a later stage ruling out an immediate response to the hiked taxes. “There won’t be an impact at this stage but when a tourist arrives and experiences how over expensive Goa has turned out to be, it could hit the industry,” he said, hoping it doesn’t happen as the State is already reeling due to the mining crisis.
Tourism insiders also fear that increased taxation will dent the number of repeat clientele who would stay away after having to spend more than expected on their first visit. Goa Tourism Development Corporation (GTDC), on the other hand, defended the increased taxation. “We have to analyse why Goa has become expensive. There are an increasing number of tourists annually but hotels are less in comparison,” GTDC Chairman Nilesh Cabral said. He went on to state that Goa should concentrate on catering to the middle class and high-end tourists in order to bring revenue to the State. “What type of tourists do we need in Goa? Bag packers or those who spend money?” he asked.
Another stakeholder, seconding TTAG’s view, feels the government should work towards making Goa a cheaper destination. “The tourism industry should be handled with care, it being fragile. It should not face a disaster like mining,” said former TTAG President Gaurish Dhond. Asked whether the hike proposed by the government in various sectors was justified, he stated that hikes are to be justified whereas some of the stakeholders – who have certain demands – should ensure they don’t loot the tourists.
“When there was a taxi strike, the tourists faced a lot of inconvenience. Why will tourists come to Goa in such a situation? It sends a bad signal across the world. People want to make fast money wherein hotels also multiply their rates. Take the example of DefExpo,” he said, requesting the Tourism Department to take cognizance of such situations.
Visitors at the DefExpo had to cough up large sums of money. Herald is witness to incidents wherein a taxi charged a passenger a fare of Rs 7,000 from the airport to the venue at Betul. Similarly, starred hotels had also hiked per their tariff during that week, as did restaurants, small eateries and even shopping places.
Cabral asked the government to come up with budget hotels stating that the GTDC-run residencies are being renovated and turning expensive. “When one is in government you cannot make it a business. There have to be lodges to cater to class three and four grade tourists. Similarly, Goa is more dependent on charter tourists than the over 20 lakh domestic arrivals. This segment (of Indian tourists) has to be taken care of,” Dhond said, adding that tourism can go bust like mining if not taken care.
Braganca further added that Goa is an expensive destination compared to south eastern countries. He also slammed the tendency to blame hotels for raising the price stating that 38 percent of a holiday package to Goa goes into taxes and charges by the government. “The flights to Goa, domestic and international, are one of the most expensive in the country. It is cheaper to fly to Malaysia from Delhi in comparison from Delhi to Goa,” he rued.
