At par with destinations such as Phuket and Bali in the 60s, the sun-lit state of Goa is now seeing an increase in domestic tourists and foreigners alike.
If there is one destination in India that is patronised by international and domestic travellers alike, it is Goa. This is one of India’s only true international holiday destinations.
With its golden beaches, scenic Portuguese reminiscence of magnificent churches, forts and settlements, Goa offers international tourists a cost effective holiday option. Over the years, the popularity of this coastal state has grown in prominence with an annually growing number of national and international tourists making a beeline for the destination.
However, Goa has a fair share of problems of its own, especially when juxtaposed with other similar destinations across the world.
Goa versus international destinations In the 1960s Goa was at par with international destinations such as Bali and Phuket, in the number of international visitor arrivals.
Bali and Phuket raced ahead and became popular tourist destinations and hit the 1 million visitors per annum mark by the end of the 60s. Goa reached the same figure in 1990.
Thailand and Sri Lanka have also emerged as preferred tourist destinations. This is likely to bring in more bad news for tourism in Goa. A superficial analysis of the cost of travel to Goa from the UK and Russia, leads us to this.
The UK and Russia are the two countries from which Goa receives maximum tourists. A small exercise of comparing travel cost to Bangkok, Sri Lanka and Goa from the UK and Russia reflects the ease and lower cost of travel to Bangkok and Sri Lanka.
This might not be a determining factor though, but it certainly impacts tourist arrivals. Although, it takes approximately the same time to travel to these destinations, the choice of airlines and the ease of reaching these destinations lie more in favour of Bangkok and Sri Lanka.
Seasonality & Segments The business for hotels in Goa is seasonal. Tourism seemingly is the most important demand driver for hotels here but MICE is the segment that ensures reasonable business for hotels in Goa.
October to February are the peak months for tourist arrivals, while March to May are the shoulder months, where the hotels host ample conferences and conventions.
June to September are the lean months due to the heat and the monsoon. The average length of stay in Goa is about nine days for international tourists and five days for domestic tourists.
Charters
The charter business is critical to Goa. Charter tourists form an important sub-segment of international visitors. A significant number of these tourists prefer to stay in midscale accommodation; however there is a small but growing trend of upscale charter arrivals particularly from Russia and the UK.
The charters start arriving from October and continue till the end of May. The charter business had shown steady increase from 2002 onwards.
Winds of Change The dynamics of the hospitality sector in Goa have undergone a dramatic change over the last five years. Till 2005, domestic travellers earlier constituted only 30% of visitors.
This figure has now gone up to 60%. The increase in share of domestic tourists has evened the steep seasonality variations witnessed earlier. Goa is becoming a 365 day destination.
This can be partially attributed to the increase in discretionary income of the younger age group, coupled by the growth in per capita income of the domestic market as well as the establishment of casinos, which have been legalised in Goa.
Visitors from North India come especially for the casinos. The market segments are shifting. Earlier, charters, especially from Europe, would contribute towards a large chunk of business. Now, the share of domestic MICE and leisure segments is increasing significantly.
Since last year rooms allocated for charter businesses have been used for MICE business due to the drop in charters. In the previous years during the peak of the economic cycle, due to the unsustainably high rates and restricted new supply, Goa was losing out on foreign tourists to other destinations in South East Asia like Malaysia, Thailand and Sri Lanka.
The lack of inventory might not be the case anymore. Alila Diwa and Fortune Select Regina opened their doors last year. Moreover, Goa will witness more supply over the next three years.
Approximately, 1500 rooms in luxury, upscale and upper midscale are likely to enter the market. The Grand Hyatt, with 314 rooms, is expected to open by the end of this year and so is The Radisson Resort, with approximately 200 rooms.
Current Market Performance The change in the travel pattern in Goa has had an impact on the average room revenue and the occupancy levels. Goa, historically, achieved the average occupancy of 68% to 70%.
This has now declined to 63%. The average room revenue achieved in the last fiscal (2009-10) was `6494. The ARRs are healthy as the number of rooms in the upscale and luxury category has increased over the years.
Outlook The planned rooms supply is anticipated to grow from 5535 rooms in 2010 (a mix of organised and un-organised hotels) to nearly 7170 rooms by 2014, reflecting a 30% increase on current levels.
An evident trend is the increasing number of casino properties in Goa, including standalone ones as well as those located within a hotel adding to the host of leisure activities in the destination and to the economic impact on the region.
The incremental rooms supply is likely to result in some rate and occupancy consolidation in the short to medium term; however the outlook for Goa is strong given its growing popularity in the domestic market, particularly with respect to the domestic MICE and weddings markets.
With large meeting facilities in proposed hotels and a proposed purpose-built convention centre, the city is likely to increase its share in demand from the MICE segment.
Goa: a 365 day destination
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At par with destinations such as Phuket and Bali in the 60s, the sun-lit state of Goa is now seeing an increase in domestic tourists and foreigners alike.
If there is one destination in India that is patronised by international and domestic travellers alike, it is Goa. This is one of India’s only true international holiday destinations.
With its golden beaches, scenic Portuguese reminiscence of magnificent churches, forts and settlements, Goa offers international tourists a cost effective holiday option. Over the years, the popularity of this coastal state has grown in prominence with an annually growing number of national and international tourists making a beeline for the destination.
However, Goa has a fair share of problems of its own, especially when juxtaposed with other similar destinations across the world.
Goa versus international destinations
In the 1960s Goa was at par with international destinations such as Bali and Phuket, in the number of international visitor arrivals.
Bali and Phuket raced ahead and became popular tourist destinations and hit the 1 million visitors per annum mark by the end of the 60s. Goa reached the same figure in 1990.
Thailand and Sri Lanka have also emerged as preferred tourist destinations. This is likely to bring in more bad news for tourism in Goa. A superficial analysis of the cost of travel to Goa from the UK and Russia, leads us to this.
The UK and Russia are the two countries from which Goa receives maximum tourists. A small exercise of comparing travel cost to Bangkok, Sri Lanka and Goa from the UK and Russia reflects the ease and lower cost of travel to Bangkok and Sri Lanka.
This might not be a determining factor though, but it certainly impacts tourist arrivals. Although, it takes approximately the same time to travel to these destinations, the choice of airlines and the ease of reaching these destinations lie more in favour of Bangkok and Sri Lanka.
Seasonality & Segments
The business for hotels in Goa is seasonal. Tourism seemingly is the most important demand driver for hotels here but MICE is the segment that ensures reasonable business for hotels in Goa.
October to February are the peak months for tourist arrivals, while March to May are the shoulder months, where the hotels host ample conferences and conventions.
June to September are the lean months due to the heat and the monsoon. The average length of stay in Goa is about nine days for international tourists and five days for domestic tourists.
Charters
The charter business is critical to Goa. Charter tourists form an important sub-segment of international visitors. A significant number of these tourists prefer to stay in midscale accommodation; however there is a small but growing trend of upscale charter arrivals particularly from Russia and the UK.
The charters start arriving from October and continue till the end of May. The charter business had shown steady increase from 2002 onwards.
Winds of Change
The dynamics of the hospitality sector in Goa have undergone a dramatic change over the last five years. Till 2005, domestic travellers earlier constituted only 30% of visitors.
This figure has now gone up to 60%. The increase in share of domestic tourists has evened the steep seasonality variations witnessed earlier. Goa is becoming a 365 day destination.
This can be partially attributed to the increase in discretionary income of the younger age group, coupled by the growth in per capita income of the domestic market as well as the establishment of casinos, which have been legalised in Goa.
Visitors from North India come especially for the casinos. The market segments are shifting. Earlier, charters, especially from Europe, would contribute towards a large chunk of business. Now, the share of domestic MICE and leisure segments is increasing significantly.
Since last year rooms allocated for charter businesses have been used for MICE business due to the drop in charters. In the previous years during the peak of the economic cycle, due to the unsustainably high rates and restricted new supply, Goa was losing out on foreign tourists to other destinations in South East Asia like Malaysia, Thailand and Sri Lanka.
The lack of inventory might not be the case anymore. Alila Diwa and Fortune Select Regina opened their doors last year. Moreover, Goa will witness more supply over the next three years.
Approximately, 1500 rooms in luxury, upscale and upper midscale are likely to enter the market. The Grand Hyatt, with 314 rooms, is expected to open by the end of this year and so is The Radisson Resort, with approximately 200 rooms.
Current Market Performance
The change in the travel pattern in Goa has had an impact on the average room revenue and the occupancy levels. Goa, historically, achieved the average occupancy of 68% to 70%.
This has now declined to 63%. The average room revenue achieved in the last fiscal (2009-10) was `6494. The ARRs are healthy as the number of rooms in the upscale and luxury category has increased over the years.
Outlook
The planned rooms supply is anticipated to grow from 5535 rooms in 2010 (a mix of organised and un-organised hotels) to nearly 7170 rooms by 2014, reflecting a 30% increase on current levels.
An evident trend is the increasing number of casino properties in Goa, including standalone ones as well as those located within a hotel adding to the host of leisure activities in the destination and to the economic impact on the region.
The incremental rooms supply is likely to result in some rate and occupancy consolidation in the short to medium term; however the outlook for Goa is strong given its growing popularity in the domestic market, particularly with respect to the domestic MICE and weddings markets.
With large meeting facilities in proposed hotels and a proposed purpose-built convention centre, the city is likely to increase its share in demand from the MICE segment.
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