Fri, 19 Jul, 2019

Tourism tanking due to illegal multi-residential complexes

There are a number of multi-residential complexes in the State, which have private residences as well as hotel rooms. Often, the hoteliers running them even offer private residencies as hotel rooms to tourists without informing the Tourism Department. As a result, the government loses money and supply of rooms increases causing tariffs to fall

28th January 2019, 04:34 Hrs

Karan Sehgal  

Recently, Small and Medium Hoteliers Association of Goa called a press conference in which they highlighted an issue, which has been going on for decades in the State but no one seems to have taken any notice.  

The issue pertains to the so-called “multi-residential complexes” or resort-cum-residence, of which there are plenty, especially in Calangute, Arpora and Colva. Such complexes typically have villas/flats sold as second-homes to people and apart from that they also have villas/flats for tourists.   

So far so good but the members of Small and Medium Hoteliers Association of Goa alleged that the hoteliers running such complexes do not inform the Tourism Department when they strike a deal with owners of second-homes and start offering those homes also to the tourists.   

Antonio De Souza, secretary, Small and Medium Hoteliers Association, said, “Such multi-residential properties have private residences (in the form of villas sold to people for residential purpose) and they also have hotel rooms meant for tourists. Suppose a person gets a clearance for building a multi-residential property, which has 80 villas and 20 hotel rooms.”  

De Souza continued, “He then goes to Tourism Department and gets approval for 20 hotel rooms. However, he has an agreement with owners of 80 villas saying that those villas could also be given to tourists to stay. So, essentially those villas are also used as hotel rooms, but the Tourism Department is not informed about it. Such a person cheats the government and creates nuisance. He goes to an online agent and markets both 80 villas as well as 20 hotel rooms without paying any government fees for 80 villas.”  

The current season has been really bad for hoteliers because the number of tourists has dropped significantly. In such a condition, illegally run multi-purpose residential complexes help in inflating the supply of hotel rooms and cause the tariffs to fall down sharply.  

Polly D’Cruz, general manager, The Golden Crown Hotel & Spa in Colva, said, “There is a residential society next to my place here in Colva, which has not registered with the Tourism Department, but they are giving accommodation to tourists. In fact, a tourist checked-in at our property but two days later he left and started staying in that society.”  

D’Cruz continued, “Not only such complexes offer much lower tariffs but they also offer things like gas-stove, fridge, washing machines and etc. So, tourists prefer staying there.”  

In the 1980s, the concept of second-homes gained currency in the market. Few builders started selling the concept of second homes to Goans living out of Goa. The idea was to provide a second-home to such Goan families while they were on a vacation in the State and rest of the time the flat could be let out to anyone.  

By the 2000s, the trend of second-homes became even more popular and rich non-Goans living in Delhi, Mumbai and Bangalore started investing in such homes in Goa. There is nothing wrong in it, but if a property is being used for tourism purposes, the Tourism Department has to be informed about it and required approvals have to be taken from other government departments, which does not happen.  

Savio Messias, president, Travel and Tourism Association of Goa (TTAG), said, “I’m aware of this issue. Over the years, a number of people have bought apartments in such complexes as an investment. They are stuck with the investment now that rentals have also fallen.”  

Various kinds of tourism stakeholders are grappling to deal with this issue. With online travel agents proliferating, everyone with any sort of residential accommodation in the beach-belt is willing to offer it to tourists using online channels. There is nothing wrong about it provided required approvals are taken.  

Dr Jagannath (Desh) Prabhudessai, president of the Goa unit of CREDAI (Confederation of Real Estate Developers’ Association of India), said, “As a builder, there is nothing much that we can do. We build a property and pass it on to the owner. From thereon, the owner is free to do with it as he pleases.”  

Prabhudessai continued, “I think the Tourism Department should catch hold of online travel agents and instruct them to share with the department the list of properties in Goa they are offering to tourists. This way, the government will know who is offering his property to tourists for tourism purpose.”  

It seems that the Tourism Department will have to step in and check how many multi-residential complexes are actually being run as hotels under the guise of residential properties. Once the government has the details, it can start a crackdown on people involved in illegal activities.  

De Souza said, “I think there should be a level playing field. If a hotelier is indeed using private villas for tourism purpose, then he should be paying required fees to all the government departments just like small and medium hoteliers like us do.”  

How illegal multi-residential complexes have 

become a problem

There are several multi-residential complexes in Calangute, Arpora and Colva, which have flats sold as private residence and also flats being offered to tourists.  

However, in most cases, people running them seek Tourism Dept’s approval only for flats clearly being offered to tourists.  

Such people also strike a deal with owner of flats sold as residence to use their flats for tourists’ accommodation. But they don’t disclose this to the Tourism Dept. or to any government authority.  

As a result, government loses fees while such parties carry on business illegally.  

They then speak to an online agent and offer the whole room inventory in a complex (including flats sold as residence) and increase the supply of rooms, which causes tariffs to fall. 

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