Bleak future for charter flights

Think Goa, images of its beaches and the several thousands of tourists that throng its shores come to mind. From the laid back 70’s when the hippies first stumbled on the joys of a lazy day on the beach, it is now a business that some might claim has gone overboard. Domestic tourists drive down from neighbouring states and partake of the pleasures, this State offers. Some live in hotels of varying quality, others in their vehicle and cook on the road. Then there is the international visitor who spends a couple of months in the State. He or she either books a ticket on an airline that lands in Goa or books a package with a charter company.

The charter company and the state have been in a passionate embrace for a while. The number of charter flights has generally been decent with the exception of 2015-16 when there was a drop due to problems in Russia. 

In 2012 -13, 996 charter flights landed at the Dabolim airport and around 2,15,304 international tourists visited the State. That number increased to 1,128 in 2013-14 with 2,61,452 tourists coming to Goa. That number dropped to 895 flights in 2014-15 with 1,61,316 tourists coming in. It dropped further to 798 flights in 2015-16 with just 1,58,779 international tourists coming in. That number was 988 in the 2016-17 season with around 2,32,679 coming in as of 14-5-2017. 

Tourists from countries as diverse UK, Russia, Finland, Germany, Ukraine, Iran visited Goa but the largest number of flights undoubtedly came from Russia. In the 2016-17 season around 614 charter flights came from that country, Ukraine with 168 flights followed by the UK with 156 flights, Iran with 19 flights, Kazakhstan and Finland with 19.

Does this mean a healthy profit is being generated by the players involved? Nilesh Cabral, chairman, GTDC responding to a questionnaire said “The GTDC had recorded a healthy financial growth and highest profits ever in the history of the Corporation for the fiscal year 2016-2017. GTDC achieved an all time high turnover of Rs 32 crore. Similarly the net profit after depreciation and setting off all the expenses/adjustments was recorded at Rs 1.42 crore. From a net profit of Rs 1.08 crore in 2015-16, the Corporation earned a huge net profit in 2016-17 which is an increase by 31%. Due to its proactive and professional management of assets, GTDC has continued to keep its financial growth graph rising. In 2012-13 the GTDC had recorded an annual turnover of Rs 24 crore, in 2013-14 a turnover of Rs 26 crore, in 2014-15 and 2015-16 a turnover of Rs 28 crore and in 2016-17 a turnover of around Rs 32 crore. The GTDC has also contributed and paid to the Central and State Government a total of around Rs 4.3 crore by way of taxes. These include luxury tax (Rs 1.2 crore) central service tax (Rs 2.6 crore), road and municipal tax (Rs 10 lakh) and entertainment tax (Rs 33 lakh).”

Now these numbers may seem impressive when looked in isolation but when analysed under a microscope, differing shades emerge. The nature of tourists coming to the State from countries like Russia has also changed over a period of time. Today a substantial percentage of the tourists coming to Goa, operate on a very tight budget.

An executive in one of the largest charter companies focussed on bringing in Russian tourists revealed his company would bring in around 55,000 to 58,000 tourists to Goa.  The business he said was getting tricky with landing charges increasing, hotels increasing rates every year and budgets of traveller’s not necessarily keeping pace.  

Aloo Gomes of TBI felt the charter business would be the same like the last year. He did not expect any increase in numbers from the Russian market. Goa, he said was not dependent on any market. The domestic market, he said was in love with Goa and that had saved the season last year and that market would continue to grow. He however predicted that when Egypt opens up to Russia, Goa would suffer. 

A hotelier in Vagator who did not want to come on record said “I have a resort with 35 rooms and I keep aside 6 rooms for charters. We prefer our domestic tourists who come and spend. Charter tourists come at reasonable rates but we are not benefitting. They want an environment which is very relaxing and yes they keep checking the prices of everything we provide”. 

If that is his complaint, imagine the problems of a five-star property based in Cavelossim. The person in charge of charter sales who did not want to come on record said, he expected a 25% drop in charter business and they were now looking aggressively at wedding and other MICE events. The South, he said was witnessing a dramatic drop in charter bookings and he did not visit Moscow or Berlin to conduct business. He was visiting business fairs in the country to tap into the burgeoning domestic market. He said “Charters are now moving to the 2 and 3 star category and our budgets of Rs 10,000 and upwards is beyond their budget. In two years FIT segment will contribute 30%-35% of our business and charters will cease to be important to a five star property”.

The changing nature of the business was alluded to by Savio Messias, president, TTAG, he said “I expect this season to be a good season like last year and I don’t expect to see a drop in arrivals. Russians, the English, Iranians, Ukrainians and the Scandinavians will come. It is a very competitive business but is also profitable”. He expected charters to continue to come but numbers would drop in the years ahead because airlines like Thomas Cook which earlier operated charters were now coming as scheduled airlines and more importantly with rates that matched low cost airlines. 

How is the government preparing for the changing market? For a tourist who would like to see Goa like a local. Nilesh Cabral said “Various infrastructure tourism projects are getting ready. The major focus is to develop the coastal circuit and provide basic tourism infrastructure like public conveniences (toilets, changing rooms, locker facilities, illumination, TIC), proper accesses and parking facilities at key beach locations. The Union Ministry for Tourism under the Swadesh Darshan Scheme has sanctioned Goa Rs 200 crore. While Rs 100 crore has been sanctioned in the first phase, another Rs 100 crore has been sanctioned in the second phase. Also, there is a state component of 70 crores which would be used for tourism infrastructure”.

Well perhaps it could be said, the presence of a large domestic market will help tide over the gradual but sure reduction of charter flights. Time will tell how it all works out.