A year after demonetisation: How cash crunch crashed party for Goa's tourism and travel industry

Panaji: In India’s holiday capital, demonetisation crashed the party for the tourism and travel industry, rocking the coastal state’s gravy-boat. Goa’s tourism season begins in October as the winter sets in and winds up in March, with the advent of summer. Coming on 8 November, demonetisation landed a sucker-punch bang in the middle of the lucrative season creating problems for travellers and other stakeholders. “Foreigners saw a restriction on the flow of funds. Taxi fares shot up, making it difficult for them to travel within Goa. Indian tourists also faced restriction as far as funds were concerned,” Edgar Cotta, proprietor of Miramar Hotel in the state capital, told IANS. He said major negative signs emerged when booking cancellations by foreigners and domestic tourists started happening. [caption id=“attachment_2282268” align=“alignleft” width=“380”] Representational image. Reuters[/caption] Goa receives more than six million tourists every year with half a million visitors hailing from European countries who visit Goa to escape the harsh winter back home. John D’Souza, head of operations for inbound travel for Eastbound Group, said that soon after the prime minister’s announcement, the situation turned desperate. “Czech and Slovakian travel agents were travelling to Goa for the first time. They did not even have money left for a coffee. And they were supposed to promote Goa and India as a holiday destination for tourists in their respective countries. Imagine what impression they carried back,” D’Souza told IANS. The Goa Tourism department, however, does not agree with omnipresent tales of woe, insisting that demonetisation barely caused “initial hiccups” even as tourism inflow stabilised within one month. “In fact, the distress of demonetisation did not really affect Goa in any way. Except for some initial hiccups due to cash-crunch, tourists continued to visit Goa and accepted alternate modes of payment and facilitated the state’s initiative for a cashless society,” Tourism Director Menino D’Souza told IANS. “It was only in the first month of the introduction of demonetisation that the industry witnessed some cuts in travel plans from domestic and international tourists, but within a month the scenario was back to normal and we did not see any huge drop in footfalls,” D’Souza said. Other stakeholders, of course, disagree. “It created a negative impact on us. We had to suffer a lot to make ends meet and paying employee salaries was a total burden. As a result we had to lay off many good employees as business was poor,” said Sheldon Remedios of Groove Events, one of the popular event management companies in Goa. He said that convincing clients to go cashless was “very difficult”. Now, the introduction of Goods and Services Tax was also not a healthy prospect, he said adding that “the forthcoming season also looks quite dull for us.” Many businesses benefit from the beeline tourists make for the Goa beeches. Take the example of Smile Factory, a dental clinic in Calangute beach village known as a dental tourism destination. Dr Rachna Fernandes, who runs the clinic, must have seen the smile being wiped away from the visitors’ faces. “They did not like standing in queue for hours for a couple of thousand rupees each day. They said they were here for a holiday, not to stand in queues for hours begging for their own money. It had scarred people. So those who were annoyed will not come back. Not this season at least,” Fernandes said. Several of her prospective clients, who had pre-booked dental appointments before arriving in Goa on a holiday, had cancelled their arrival plans after hearing about the demonetisation decision, she said. But has demonetisation spread the practice of digital transactions in the tourism hub? Despite demonetisation and the subsequent emphasis on cashless transactions, only five per cent of the transactions were carried out by cashless means, D’Souza of Eastbound Group said. “Ninety five per cent of the transactions are still in cash,” he added.