Trunk Economics | January 16, 2025
Goa vs Thailand: Shifting Sands
It is no longer a simple binary choice between Goa and other destinations; rather, it is a complex interplay of aspirations, affordability, and experience. Goa must reconcile its appeal to both loyal repeat visitors and new, aspirational travelers.
THERE’S A LOT THAT GOES ON behind a family vacation. Affordability, while being a central determinant, is still only one among the many constituents that swings a family’s vote towards a particular location in a catalogue of multiple destinations.
There are quite a few intangibles and not-so-obvious prompts. Social media friendliness, defined broadly on how a location is likely to stand out and draw engagements in the form `likes’, `shares’, and `comments’ across posts, reels and stories, has, now-a-days, emerged as a principal deciding factor.
This is emblematic of a sociological makeover that is currently underway. Family WhatsApp groups that get flooded with pictures and videos anytime someone goes on a trip is a testimony to how vacations are subtly becoming as much about swaggering trophies as they are about switching off from the daily bustle and discovering new people, places, culture, language and food.
There is an element of subliminal in this. People’s ability to take a vacation is a function of spending ability. With rising incomes people also move on the consumption value ladder. In the product space we quite often see this playing out in the goods such as cars and clothing. Yesterday’s luxuries, become today’s affordables.
Likewise in the world of experiences too, such as a vacation. Yesterday’s aspirational destinations become today’s affordables as income levels move up. And when aspirationals turn into affordables, the demand for quality assumes centre stage, which is what seems to be playing out in the high octane Goa versus Thailand debate in the tourism sweepstakes.
Falling Stock
The sun-kissed beaches, Indo-Portuguese cultural heritage, and vibrant nightlife that once made Goa an irresistible magnet for travellers, both domestic and international, are no longer enough to guarantee its position as the country's most preferred coastal getaway.
The proliferation of social media has democratised travel planning, empowering potential visitors to scrutinise destinations with unprecedented precision.
The likes of Thailand, Vietnam, Malaysia, and Sri Lanka have seized this opportunity to woo Indian tourists with competitive pricing, streamlined visa processes, and a reputation for tourist-friendly hospitality.
The perception that Goa has become complacent in its appeal, relying on past glories rather than innovating to stay ahead of the curve, has begun to take hold. Goa has found itself beset on all sides by a crisis of perception.
The narrative, amplified by the echo chambers of social media, is stark: Goa, once a haven for global travellers, critics say has devolved into a destination beset by extortionate taxi operators and a general air of unfriendliness. The anecdotal evidence, shared and re-shared on social media platforms by influencers and travellers alike, has coalesced into a damning indictment of Goa's hospitality industry.
Economics and Sociology at Play
The phenomenon at play here is multifaceted, driven by a combination of economic and sociological factors. As India's middle class continues to expand, more families are joining the ranks of the aspirational, seeking out new and exotic destinations to fulfill their vacation aspirations. Economists describe this as the `demonstration effect’. Sociologists call it 'upward mobility’.
The data tells a fascinating story. Proxy indicators suggest that Goa's tourism industry remains robust, with flights, trains, hotels, and restaurants reporting brisk business. According to the state government, five and four-star hotels have reported close to 100 per cent occupancy during the peak year-end week. Lower category hotels have logged in 60-65 per cent occupancy.
Prima facie, this would suggest that tourists, across income classes, are still flocking to Goa. So, what’s the hullabaloo all about?
The truth, it would seem, is more nuanced than what the headline visitors’ numbers would signal. While Goa remains a beloved destination for many, a significant proportion of travelers are seeking out newer, more exotic experiences.
The key question to ask is what proportion of those who vacationed in Goa were first time visitors? And what proportion of the tourists were repeat visitors? A time series analysis of these can throw up some fascinating insights.
Is Goa attracting more first timers than repeat visitors over the years on a proportionate basis? If the data mirrors this hypothesis, then it could well mean that more and more Indian travellers who have been to Goa earlier are choosing to embark on their inaugural overseas vacation.
So long as Goa continues to attract the first-timers, it would show up in the hotel booking and other indicators. Goa’s status as one of India’s most preferred beach destinations, however, will come from its ability to hold on to the die-hards.
It is no longer a straightforward either-or proposition, but rather a nuanced interplay of aspirational desires, economic viability, and experiential expectations. Goa must skillfully reconcile its appeal to two distinct demographics: loyal repeat visitors seeking familiarity and comfort, and new, aspirational travelers craving novel experiences and bragging rights.
From government authorities to taxi operators, restaurateurs, and hoteliers should adapt to this shifting landscape by contemporising regulation and infrastructure, and shrug off the general complacency.
It needs to reclaim that fast-losing identity of `Beach matlab Goa’.
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