Home >Politics >Policy >20% of Goa shacks seen shutting down

Mumbai: If Goa is on your mind for the next long weekend, you may get a good hotel deal with the meals complimentary. Grab the deal and thank Russia for it. Also, your favourite shack in Goa may be shut—thank Russia for that too.

“Our permits for this year will expire on 31st May, however a good number of us plan to shut shacks earlier than that. The overall situation is bleak and there has been a major fall in Russian tourist numbers," said Cruz Cardozo, president of the Shack Owners Welfare Society. Cardozo expects about 20% of the 369 shacks in Goa to shut down in early March.

This is due to the recent crash in the Russian currency. A US dollar on Monday was equal to 64.25 Russian rubles, compared to 35.53 Russian rubles a year ago.

Industry sources say that for Russians, the ruble crash has made Goa twice as expensive as last year, leading to a slew of cancellations of hotel bookings. Of those who still kept their date with Goa, some chose to pay in euros and pounds, said Shridhar Nair, general manager, The Leela Goa.

In 2013, more than 1.6 lakh Russian tourists visited Goa, the biggest national group, according Goa Tourism’s official website. However, in the current season starting October 2014 things have changed dramatically—the number of Russian tourist arrivals in Goa is down by more than 50% according to Cruz Cardozo, president of the Shack Owners Welfare Society. The Goa Tourism website is yet to update its figures for 2014.

“With the daily fluctuations in the Russian currency, travel agents were finding it difficult to calculate the exact price for a trip from Russia to Goa," said Nair. Almost half of the pre-bookings from Russia were cancelled, he added.

Now shack owners are finding it uneconomical to stay open with manpower costs adding up. “I am struggling to pay my daily bills, then there are manpower and electricity costs. I plan to shut down early, by the end of March—can’t continue operating in losses," said Leslie Fernandes, owner, Sam’s Beach Shack at Baga, Goa.

Cardozo claims a couple of shacks at Agonda Beach shut down operations overnight. “These were people who had rented the place. They disappeared overnight, unable to keep up with payments."

For hotel operators like Neeti Dwivedi, owner, Ananda Resort Goa, the ruble crash came as a shock. “I did not know much of what was happening with the Russian currency, until a travel agent in Russia one fine day called up and called off talks for a package deal. The agent was earlier promising to take care of almost 30% of our occupancy," she said.

With Goa’s highest spending tourists giving it a miss this time, hotels have been forced to slash prices. Goa’s most expensive hotel The Leela Goa has reduced prices by 12%. Hotels like Ananda Resort have cut prices by as high as 40-50%.

For Ananda Resort weekends are the only respite. Dwivedi explains domestic tourists make up for the vacancies during weekends, but that weekdays remain a challenge. “In a normal year my weekday occupancy for January-February would have been 50% with high payments, it is now 20% with low payment," she added.

Not just occupancy, hotels are also struggling on the cost-revenue side. “Russians are high paying and long-stay tourists compared to domestic travellers. A high paying Russian can easily take care of the revenue loss on vacant rooms. With Indian tourists that is not the case," Dwivedi said. As per the department of Goa Tourism the average duration of stay by foreigners is nine days, while the average Indian tourist stays for five days.

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