Goa tourism: Empty beaches, empty pockets

Tourism in Goa relies on a seasonal influx of Russians fleeing the country’s harsh winter. But its weak economy and currency have stemmed the tide this year, leaving an industry without customers.

Western sanctions and the fall of the rouble have made it difficult for Russians to travel, and those who do find their way to Goa are not willing to spend as much. Rick Friedman / Corbis

PANAJI // Ravi Bagalkot, who runs a clothing stall perched above Arambol beach in Goa, is finding business difficult. Every year for the past ten years he and his family have travelled from the neighbouring state of Karnataka to Goa for the six-month tourist season.

Previously, Mr Bagalkot benefited from swarms of Russian tourists who descended on Goa’s beaches and were willing to shell out cash on the cheap, hippie-style clothes he sells. This season, however, he estimates that the number of Russians staying in Arambol has halved, and those who have made the trip have less to spend because of the rouble’s weakness.

“There’s nothing we can do about it,” he sighs.

Lower oil prices, western sanctions against Russia over Ukraine and a currency that has depreciated severely – to 63 roubles against the US dollar compared to about 35 roubles at the same time last year – have hurt Russians’ appetite for overseas travel and their spending power.

Goa’s tourism industry is heavily dependent on Russian tourists. A number of restaurants have menus in Russian, and shops have signs in the language along the northern beaches.

Russians in 2013 made up the biggest group of tourists by nationality, data from the state’s tourism department showed. A total of 162,746 Russian tourists visited Goa that year, making up a third of all its foreign tourist arrivals. The United Kingdom was the second biggest market, with 145,431 holidaymakers arriving from there, followed by Germany at 46,472 visitors.

Goa’s tourism season runs from October to March.

Nilesh Cabral, the chairman of the Goa Tourism Development Corporation, says that Russian charter flight arrivals to the state have dropped by almost 30 per cent this season.

“To Goa, tourism is very important,” he says. Goa’s economy has suffered over the past few years because of a ban on iron ore mining, which was lifted last year but left the sector in turmoil.

“After mining, tourism is the next economy for Goa, so in the interest of the state and in the interest of the citizens of Goa, tourism is essential,” Mr Cabral says. “It provides employment and it provides taxes to the government. The Goan economy is dependent on that.”

Goa’s tourism minister, Dilip Parulekar, last month blamed the Russian president, Vladmir Putin, for the drop in tourist numbers, saying that Mr Putin had asked Russians not to travel overseas, according to IANS, a news agency.

Roman Sidorenko, a commercial director from a small town outside of Moscow, nevertheless decided to travel to Goa in mid-October and is staying in the Arambol beach area until the beginning of April to escape the Russian winter. He says he is finding things more costly because of the weak rouble, particularly when it comes to buying goods imported from Russia to the local Goan shops for tourists, such as cheeses from back home. Despite the cheaper import costs because of a falling rouble, shopkeepers have not reduced prices.

“Some of my friends decided to stay at home this winter and went to Russian villages instead,” says Mr Sidorenko.

A few kilometres south, on the palm-fringed Ashvem Beach, locals point out that one of the most popular nightspots for Russian tourists closed its doors early for the season a few weeks ago because of the drop in tourism.

Dinesh Kumar, who runs L’Amore, a resort on Ashvem Beach, which stayed open until mid-April last year, is also thinking about closing early if business does not pick up and says he might be forced to lay off a few staff soon.

He estimates that Russian tourists normally make up about 80 to 90 per cent of Ashvem’s tourists. But this year the sharp drop means that they only make up about half.

“Next month I have no bookings, and March is normally very good,” he says.

In an effort to drum up business, L’Amore’s room rates have been slashed from 5,500 rupees (Dh324) a night, which it charged at the same time last year, to 4,000 rupees, Mr Kumar says.

His wife, Arti Singh, runs a massage and beauty spa nearby. Her spa, which depends on Russians for 90 per cent of its business, is struggling this season. The business, which employs 30 staff, will be lucky to break even this year, she says. The number of Russian tourists in Ashvem is down by about 40 per cent, she estimates.

“The Russians were coming and paying in dollars,” Ms Singh says. “This year, they don’t have any dollars. We have no expectations for this season.”

She says Goa should move away from its dependence on Russian tourists and diversify to target other nationalities, including more domestic visitors.

“Goa was not having any plan B,” Ms Singh says. “Only a plan A with the Russians.”

For their part, the tourism authorities in Goa are working to tap different markets, attending travel shows in Madrid and Amsterdam to advertise the destination. “As far as foreign tourist arrivals go, there has been a drop in charter arrivals, but this is a temporary phase arising from the geopolitical scenario in Europe,” Mr Parulekar said. “We are focusing on newer markets across the globe and will see a rise in footfall in the months to come.”

Mr Cabral says Goa has also been trying to attract higher-spending tourists to boost its economy. The state plans to add hot air balloon rides, amphibious vessels, sea plane services and golf courses “for the next market of Goa – a high-end market”, he says.

“Now we are focused on showing Goa not only as a tourism beach belt, but somewhere with a lot of heritage, culture and hinterlands,” he says.

Five-star resorts, including a Four Seasons, are being built in the state.

Thomas Abraham is the general manager of the Park Hyatt Goa Resort and Spa, one of the destination’s most luxurious hotels.

He says that “while the Russian tourist volumes dropped drastically”, the hotel is still doing well because business from other markets “softened the impact”. Most of the property’s guests come from the United Kingdom, France, Russia and the UAE, he adds.

“Being predominantly known for its beaches and party life, Goa has now evolved as a destination offering diverse experiences from spiritual sojourns to wellness retreats, adventure sports, culinary voyages and destination weddings,” Mr Abraham says.

For some Russians, things have worked out well. Elena Lyubimova, a tourist from Moscow in Goa, says that she planned a two-month holiday and has already ended up staying three months. While many of her fellow tourists complain about the weak rouble, she explains is managing to avoid such problems by earning rupees locally playing the violin in restaurants.

“Here everything is cheap,” says Ms Lyubimova, who previously worked in Russia. “A lot of my friends in Moscow are in shock because of the prices over there. Many firms have closed. Many people who work as managers can’t find jobs. It’s better for me in India.”

Mr Bagalkot is among those hoping that Russia’s economic and political woes ease. He says he will definitely return to Goa for the next season in anticipation of better trade.

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