An industry source said the Act would create high-entry barriers for new service providers and limit customer choice
A recent amendment in the Goa Registration of Tourist Trade Act, which has made it compulsory for online travel aggregators and hotels to register their business to continue operations, has raised concern among the sector.
The amendment, which has been notified in the official gazette, is expected to negatively affect online travel firms such as MakeMyTrip, Oyo and Airbnb, raising their compliance costs and setting a precedent that other tourism-heavy states may look to emulate.
Companies said they were still studying the Act, which was passed on January 31.
“While we are taking up this bill through industry bodies, we are concerned about some of the onerous provisions around local registration,” said a MakeMyTrip spokesperson.
An industry source said the Act would create high-entry barriers for new service providers and limit customer choice.
“E-commerce businesses are having to register in every state under the new GST rules.
"The ones that don’t need to register because they don’t meet the revenue threshold.
"If the government is going to force them to register their business under the new Goa Tourism Act, it will lead to a loss of revenue for state while increase operational and compliance costs for small businesses,” said the source.
In January, a group of small and medium hotels had demanded an amendment in the existing laws to check low and aggressive pricing by online aggregators and also to regulate the conversion of residential property to boutique hotels and bed and breakfasts.
“We are studying the notification and will be keen to understand the details as they pertain to the bed and breakfast hotels and homestays segments.
"We are committed to engaging with the states and all other stakeholders towards resolving any concerns as we move forward in our vision to create a perfect space in every place,” said a Oyo spokesperson.
The move is also part of the Goa government’s larger effort to improve the quality of tourism and bring about discipline among tourists.
According to a report by the India Brand Equity Foundation, 3.16 million tourists visited Goa in the first half of 2018 and received visitors from as many as 141 countries in the previous year.
Companies like Airbnb, which host homestays, lodging and tourist experiences in a marketplace model, will also be affected by the law.
Airbnb allows people to offer a part of their residential property for a short-term stay.
The area is largely unregulated but allows for competitive pricing and greater choice for customers across all income groups.
Airbnb did not respond to a request for comment.
“Online travel aggregators are internet based platform and are global service providers that allow customers to visit Goa.
"Asking them to register will not only restrict service provision of these platforms but will end up alienating potential tourists.
"Moreover any provision for regulating such online platforms/services come under the ambit of information technology regulation,” said a senior industry leader, who did not wish to be named.
Photograph: Punit Paranjpe/Reuters