Federation of Small and Medium Guest Houses – FOSAM

One of the priority sectors identified by CRT was the Small and Medium Enterprises (SMEs) in Tourism. A major mobilization process was taken up and meetings were held in different parts ofGoatogether owners of Small and Medium Guest Houses in their own locations. Having established the urgent imperative for an association – a rallying point for these enterprises to act in unison – an organization was created and called the “Federation of Small and Medium Guest Houses” (FOSAM).

Organizationally speaking FOSAM has defined itself as follows: 

Vision and Mission

The vision of FOSAM is to create an atmosphere wherein tourism inGoabecomes a meaningful and enjoyable experience and encounter for the visitor with the Goan culture, traditions, and the natural beauty ofGoa. In line with this vision, FOSAM seeks to enhance the experience of travelers toGoaby offering quality services and a distinct Goan experience to the visitor – be they tourists or business travelers visiting Goa.

Organizational Intent

FOSAM believes that its core organizational intent is to advance the interests of Small and Medium Hotels and Guest Houses inGoaas a way of creating self-employment to a wide range of people and thus serve the State ofGoain the tourism arena

 FOSAM’s objectives:

• Be a recognized body that speaks on behalf of its members and the Small and Medium accommodation sector who account for 95% of the accommodations provided to visitors toGoa.
• Create methods and avenues through which SMEs can gain access to incentives, subsidies, and government policies/packages which can enhance their financial earnings
• Develop relevant tourism policies and paradigms that serve to bring greater benefits to Goans and the Goan economy.
• Undertake initiatives that guarantee that the SMEs in tourism are seen as a socially responsible industry.
• Cooperate and work together with other small sectors of the economy such as dairy, poultry, agriculture, transportation, food services etc so that an integrated development is possible.
• Work to Lobby for policies and programmes which advance the interests of the all Small and Medium sectors in tourism so as to ensure that the benefits of tourism are not expatriated.
• Access relevant schemes and programmes available in the government – State and Central- which can be channeled to SMEs and, thus, further, advance their well being.
• Propose measures through which various departments of government at State and Central level can provide subsidies and incentives to SMEs by which they can increase their service and earning capacities.
• Develop a Code of Ethics for all members to be strictly adhered to.
• Create ‘Certification Schemes’/Labels for FOSAM members in cooperation with Centre for Responsible Tourism (CERT) under such subjects as ‘Responsible Host’, ‘Code of Ethics’, ‘Green Host’, ‘Committed to child protection’ etc.

Emerging issues

• Need for the Department of Tourism and GTDC to deem FOSAM as a consultative body and channel policy making through FOSAM for purposes of cooperation and smooth implementation. Also, that FOSAM will representGoain International Trade Fairs where tourism is show cased e.g. the ITB inBerlineach year.
• Need for a ‘single window’ clearance with a long-term Certificate of Registration and Trade License issued for five years; a waiver of registration fees to guest-houses with five or less rooms; a strict adherence to the three-month time-line for clearance’s).
• Special incentives to Nature Tourism resorts under the banner of eco-tourism.
• Special concessions to convert power supplies from normal pattern into solar energy sources.

Plan of Action

1. 1.     Charter Tours

Analyze the  social and economic implications of charter tours for Goa and Goan entrepreneurship; Develop a standard minimum rate that SMEs can charge the charter tour companies and better regulation of rates by the government based on market value; Government needs to be partner and advocate on behalf of local SMEs vis-à-vis foreign charter companies.

1. 2.     Infrastructure

Stake claims towards the following:

• Allocation of 25% of the annual tourism budget to ensure quality infrastructure at the local village/city level including proper roads with adequate lighting at night, steady

• 24-hour electricity especially during the monsoon, 24-hour clean water supply, a well planned.

• Public sewerage system and treatment plants, especially in highly concentrated coastal villages.

• Regular garbage collection segregated at source from residences and businesses as well as public bins which are emptied on a daily basis, and beaches free from litter.

 

3. Subsidies/Incentives

Obtain capital investment subsidy for locals; interest-free loans for upgrading existing facilities and an employment subsidy for hiring local staff throughout the year with a partial salary during the off-season.

4.  Tourism Tribunal

Establish a tourism tribunal to address grievances from service providers in the industry as well as complaints from civil society, and where necessary, provide a temporary resolution within 24-hours.

5. Environmentally Sustainable Rural Tourism

• Promote eco-tourism among existing SMEs in collaboration and  facilitate experiential training sessions and technical advice exchange within the entire accommodation sector,
• Claim incentives and subsidies to SMEs to adopt environmental-friendly practices such as alternative energy sources in the operation of their facilities;
• Claim rebates on water, electricity, and sewage charges.
•  Claim rewards/incentives for SMEs which have put into place these systems and save the government on water and power consumption, and sewage collection efforts

1. 6.    Taxes

Lobby to have new luxury tax of up to Rs. 800/- abandoned; and revert back to the old cut-off categories

1. 7.    Campaigns

Seasonal Certificate to small paying guest accommodation so as to support small entrepreneurs

1. 8.    Enhancement of the marketing capabilities of guesthouses

Claim support for separate brochures/booklets/website with    special mention of ‘paying guest’ accommodation throughout the Department’s promotional channels, e.g. Visibility and free telephone service at the airport accommodation

FOSAM’s Code of Conduct

Members of FOSAM developed a pledge to abide by. The following was adopted as a code of conduct in four key categories:

Legal Obligations

• Act in good faith in all dealings with the government and its representatives, i.e. no bribery, abide by building regulations.
• Pay all taxes and registration fees with the understanding that these contribute to our state’s revenues.

 Civic Responsibilities

• Be a good neighbor by applying highest standards of integrity, fairness and ethical conduct in neighborhood and participate actively in community fora to address broader social problems;
• Treat all visitors with honesty and courtesy and make sure that they are aware of the local customs and laws.
•  Provide decent employment/provisions for staff during the off season.

Protection of Human Dignity

• Shall not display tolerance of any activity that violates the human dignity of anyone else, e.g. pedophilia, prostitution, sale and abuse of drugs, human trafficking, in premises or surrounding areas.
• Shall not engage child workers. 

Green Tourism

• Shall be committed to environmental protection because this is not just in our business interests, but also because an environmentally friendly business is in the interest of our own health and well-being and that of our families and communities;
• Shall segregate waste on-site and participate in a community system of garbage collection and disposal.
• Shall demonstrate respect for nature and wildlife. 

Creation of Strategy Groups as follows:

• Environmental and Pollution issues
• Taxation/Rates and Tariffs/Infrastructure issues
• Eco-Tourism and Nature tourism issues
• Charter Tours/Rent Back issues
• Government relations/TTAG
• Media and publicity
• SME linkages to other sectors

In the ultimate analysis

FOSAM is, in the ultimate analysis, an organization and programme to:

• Bring the benefits of tourism to Goans.
• Give the visitor toGoaan authentic Goan experience.
• To establish that Goa is a destination that offers a safe and ideal environment for people to holiday and experience something distinct, be it cultural, spiritual, environmental, or just a relaxing time away from home!

 Some achievements:

A major initiative undertaken by the FOSAM was a Dialogue with Member-Secretary of theGoaPollution Control Board and representatives of FOSAM and CERT and the Director of Tourism. Following the dialogue, a few important steps were noted and agreed on. One was that the new requirements of the Goa Pollution Control Board pertaining to Small Guest Houses in ‘Category D’ would not be applicable for the current tourism season. Secondly, it was agreed that FOSAM will help design an anti-pollution regulatory system for the tourism industry that is based on the size of the guest house and the corresponding degree of pollution that can be potentially generated. This will be submitted to the Goa Pollution Control Board for their consideration. FOSAM members will have the opportunity to present their proposals and view points. The Pollution Control Board requested a letter signed by members of FOSAM which as done by a large group of SMEs. The letter said:

“We, the undersigned, have come together as Small and Medium Hotels / Guest Houses inGoa, henceforth shortened to small and medium-size enterprises or SMEs, to review a matter of grave concern to us. We are united under the banner of the ‘Centre for Responsible Tourism’ which is an initiative of the Caritas-Goa and Council for Social Justice and Peace.

 

We recognize the need for anti-pollution legislation inGoaand as responsible citizens, would like to play our part in keepingGoaclean. However we are deeply troubled by some fundamental flaws in the approach to pollution control that we are being subjected to. Below, we list the problems as we see them and some recommendations.

 

Problems

We recommend:

The new system of pollution control seems be arbitrary and not based on actual emissions of enterprises in different industries, particularly of SMEs in the hospitality industry.     The proposed sewerage system contradicts existing anti-pollution mechanisms that have been put into place by SMEs at great costs in accordance to the licensing and regulatory requirements.   The new forms are based on the operation of large hotels and manufacturing industries. They are, therefore, inappropriate and impractical for SMEs.   The high pollution control fees which have been levied by the Board does not address the problem of pollution;       SMEs that operate in the coastal areas are unduly penalised by a year-round fees and tax system;     Enterprises that rely on generators/alternative energy sources are made to pay high fees in addition to the fees already charged for anticipated pollution.   The new ‘renewal of registration’ fee structure does not take into account the varying degrees of pollution within the industry.   The retrospective character of the fee structure is unfair

Design an anti-pollution regulatory system for the tourism industry that is based on the size of the guest house and the corresponding degree of pollution that can be potentially generated;   Inspect the existing systems in place at SMEs and review the need for a new sewerage system         Formulate a reporting form that is relevant to the size, type and services offered by guest houses;       Instead, offer a friendly administrative system which can provide guidance on reporting the levels of potential pollution and technical advice on how this can be controlled and reduced;   Any pollution control mechanisms that are put in place need to reflect the seasonality of the tourism industry in general and SMEs in particular.   The use of back-up sources of energy should be incorporated in the existing fee structure;       It needs to reflect the size of the enterprise, i.e. the number of rooms rather than broad categories as outlined in the new registration criteria;   It needs to be revised.

In general, there needs to be adequate justification for including tourism SMEs having 35 rooms or less under the purview of the Goa Pollution Control Board.

Due to the highly controversial nature of the present system, we demand that the licenses of small and medium hotels and guesthouses be renewed by the Department of Tourism without further hardships, until there has been sufficient time to review and revise the anti-pollution legislation in light of discussions of its implications with those affected by it.

We earnestly request you to consider the proposals we make to you and which has been signed a large numbers of Small and Medium Hotels / Guest House from North, South, and centralGoa. (Please see attached). We are willing to come and meet you to discuss this proposal and find consultative solution to the problems our attitude is one of cooperation and partnership with your department. We hope you will reciprocate in the same spirit.

Change in tax policy

FOSAM/CERT is also lobbying for a rescission of the current policy and the institution of a tax on room rates of 800 rupees and above.

The letter to the Minister of Finance was a request to reconsider the ‘recent’ announcement of new luxury taxes and pointed out the following:

On April 14^th, 2008 your department issued an announcement in the Gazette requiring all guesthouses to pay a luxury tax on room rates of 250 rupees and above.  Prior to this year, the luxury tax applied only to room rates of 500 rupees and above.  This new policy results in an arbitrary and oppressive increase in taxes for small and medium guesthouses.   As a result of this increase, Guesthouses will have to increase their rates, prospectively losing business to the detriment of the Goan economy.  Furthermore, the sudden increase in the tax will create a significant loss of revenue to guesthouses locked in long term contracts with charter tour companies.

It must also be noted that while your announcement was issued on the 14^th April, it was back dated as 2^nd April, 2008 and it came into force fromApril 1, 2008. The net result was that it disadvantaged a large number of Guest Houses and Hotels because they were unaware of the announcement and, having, not collected any taxes from customers; now have to pay this from their own pockets.

We propose a rescission of the current policy and the institution of a tax on room rates of 800 rupees and above.  After all, most of us are self employed individuals, not large industrial conglomerates to whom this concession will mean a lot. A tax at this rate will free guesthouses to charge more competitive prices, increasing business to the benefit of the Goan economy.

We earnestly request you to consider this proposal we make to you and which has been signed by large numbers of Small and Medium Hotels/Guest House from North, South, andCentral Goa. We are willing to come and meet you to discuss this proposal and find consultative solution to the problem. Our attitude is one of cooperation and partnership with your department. We hope you will reciprocate in the same spirit.

White paper on SMEs

FOSAM and CERT worked together to produce a research-based, policy-oriented paper that benefits small and medium-size tourist accommodation facilities, and the Goan community more broadly. Titled ‘Small is Goan’, the ground breaking study, carried out by Dr. Anibel Ferus-Comelo who served as Consultant to FOSAM -could impact other Third World destinations too where, like in Goa, the benefits of tourism do not always accrue to the local communities. The report argues that, since 97% of the tourist accommodation sector is made up of SMEs, a substantial majority of which are owned and operated by Goan families catering to a vast diversity of tourist budgets, SMEs deserve to be formally consulted in tourism planning. Additional reasons why entrepreneurship in the SME segment needs to be financially and institutionally supported by the government are also presented. Finally, the report suggests thatGoaneeds sustainable, responsible tourism development with an emphasis on small and medium enterprises for the benefit of our communities. Once this has been put into place, tourists in large numbers will continue to be drawn to the state for its natural beauty, cultural heritage and harmonious social environment.

Although tourism is considered the ‘backbone of Goan economy,’ there is a disturbing lack of a policy framework which ensures that the gains of tourism-related activities benefits local people, local communities and local entrepreneurs. The policy paper is a path-breaking attempt of small and medium enterprise (henceforth SME) owners in the tourist accommodation sector to highlight the problems they face, to propose policy solutions, and to articulate their social and ethical responsibilities toward an alternative tourism.

The research for this paper covered a representative sample of the small and medium hotel and guesthouse (SMEs) owners from around the state. The study was conducted through multiple forms of data collection, including a total of 219 surveys collected from SMEs representing over 1,600 rooms available in coastal villages from Pernem to Canacona. Four principles framed the study, namely, an equitable redistribution of the economic benefits through tourism; preservation of human dignity and meaning in tourism-related activity; the protection of nature and the environment; and democratic decision-making along with all stakeholders including local communities which are profoundly impacted by tourism.

The White Paper comes in the wake of a Central Planning Commission report on the need for additional hotel accommodation around the country, especially in the coastal regulation zone (CRZ) areas ofIndia. The report also proposes the establishment of casinos, hinterland tourism, and the formation of ‘tourism clusters’ around major cities. It may pave the path toward Special Tourism Zones (STZ), which are currently under consideration at the central level. This does not bode well forGoa. In direct contrast, our White Paper presents research-based arguments in favour of small-scale, equitable tourism development rather than mass-based luxury tourism.

It argues that, since 97% of the tourist accommodation sector is made up of SMEs, a substantial majority of which are owned and operated by Goan families catering to a vast diversity of tourist budgets, SMEs deserve to be formally consulted in tourism planning. Additional reasons why entrepreneurship in the SME segment needs to be financially and institutionally supported by the government are also presented. Primary among these is that SMEs support livelihoods and are a channel through which the benefits of tourism are widely distributed in the community. Some of the SME demands are: an annual budgetary allocation to ensure basic infrastructure such as steady 24-hour electricity and water supply, a well-planned sewage system, proper roads and a proper garbage collection and disposal system; a ‘single window’ clearance for a long-term Trade License; the reinvestment of luxury tax into the struggling agro-dairy-poultry-bakery industries in Goa; support for Goan  entrepreneurship; immediate repeal of the Goa Town and Country Planning (Amendment) Act, 2008 (which excludes government projects from due process); a Tourism Tribunal; and genuine environmentally sustainable rural tourism.

FOSAM submitted this interim report to the government as an initial step toward a transparent and participatory approach to decision-making about the future of tourism in our state.