New Liquor Policy Gives Tourism Sector Reasons to Smile, not Cheer
Kochi: It is sunshine days again for Kerala’s tourism sector. The industry, which played a major role in drawing the attention of the world towards this green stretch of land by its wonderful open-arm hospitality and relentless promotional initiatives, has been passing through a difficult phase in the past couple of years. The ‘calamity’ was ironically perpetrated by a perceived ‘pro-people’ initiative of ban imposed by the previous UDF Government, which subsequently received the concurrence of the apex court of the land as well.
LDF Government’s new liberal liquor policy has helped tourism industry in Kerala overcome the crisis caused by the ban imposed by the previous government, but some issues remain to be resolved.
Tourism, a major contributor to the revenue of the State and one of the biggest employment generators, suddenly started wilting, as vouched by industry insiders, with a sudden dip in the arrival of tourists who were drawn by the enchanting beauty of the land as well as its liberal way of life which put a premium on personal freedom. But the out-of-the-blue decision of the UDF Government to close down liquor vends, of all kinds and forms, suddenly conveyed a feeling that it was transforming into a ‘nanny state’, imposing curbs on the legitimate freedom of tourists, as well as citizens, to enjoy a whale of a time in the company of bewitching nature at God’s Own Country.
It was at this juncture – when the tourism industry was desperately looking for someone to salvage it from this predicament – that the State witnessed a change of guard. In the Assembly election held in 2016, the CPM-led LDF Government came to power dislodging the UDF dispensation. The industry was hoping for the new government to lend them a helping hand through a liberal liquor policy, and the Communists who were looking to put across an industry-friendly image were more than willing to consider this genuine demand of the tourism industry, even at the cost of incurring ‘public wrath.’
Kadakampally Surendran, State Tourism Minister, has to say this about the Government’s decision to stand by the industry: “The availability of liquor may not be the sole reason for travellers choosing a destination for holidaying or picking an exotic venue for hosting an event. But responsible drinking has become a part of urban lifestyle in all civilised societies. The earlier policy had adversely affected the MICE tourism sector. The new policy will infuse vigour into the sector once again. However, it will take another two years or so to undo the damage.”
According to the State Tourism Department, the industry suffered an annual loss of around Rs. 2,000 crore in the last two years. The LDF Government also claimed that the UDF Government’s liquor prohibition policy was nothing but a failure. “Liquor consumption has not witnessed any drop in the State despite the closure of vends. People resort to all kinds of methods to obtain liquor. Abkari cases rose by 35 per cent, Narcotic Drugs and Psychotropic Substances (NDPS) cases by 67 per cent, Cigarettes and Other Tobacco Products (COTPA) cases by 170 per cent and spirit cases by 100 per cent during the period. That is why the LDF Government advocates abstinence rather than prohibition,” said T P Ramakrishnan, State Excise Minister.
At present, every day about 8,49,000 litres of alcohol is sold in Kerala, higher than the pre-restriction levels, as per the Excise Department. The restriction period saw the growth in sales of Indian Made Foreign Liquor (IMFL) coming down by only a marginal 7 per cent. At the same time, sales of beer grew by 80 per cent. The State’s excise revenue, instead of dipping, rose from Rs. 1,777.42 crore in 2014-15 to Rs. 2,397.36 crore in 2016-17.
But does it really matter whether alcohol is served or not when one chooses a destination? “Yes, it does to a majority of travellers,” the entire travel and tourism fraternity says in unison. “For instance, liquor is an important factor as far as Russian tourists are concerned. They mostly prefer beach destinations. A stringent liquor policy means your chances of having charter flights from one of the markets become less, if not nil. Now the message will spread gradually and we can expect a more vibrant tourism season in the coming years. It is also important that successive governments ensure continuity in liquor policy. This will make sure that Kerala has a steady growth in tourist arrivals even if there is a slowdown in the economy of any of our major source markets,” a senior official with KTDC said. Liquor policy certainly has an impact on MICE and wedding tourism. The benefits of MICE tourism are many.
Extension tours are also a part of it. The new liberal policy permitting one-day licence for serving liquor during an event can really make a difference. The challenge is to ensure high standards in those hotels which were granted bar licences. Apart from Excise Department, Tourism Department should also have a say in monitoring the functioning of hotels to prevent the misuse of licence conditions, says Sajan Joseph, CEO and Co-founder, BreakOut Hotels.
According to Anish Kumar P K, President of the Association of Tourism Trade Organisations India, the new liquor policy will help check the propaganda by rival tourist markets that Kerala is a State that denies facilities to tourists. Before the UDF Government decided to close down all bars except the ones in five-star hotels in 2014, there were 732 bars functioning across the State. Later, the government decided to close down 418 bars citing poor hygienic conditions. But when the Oommen Chandy Government decided to close down all bars except the 30 in 5 star hotels out of political compulsion, the remaining 284 also had to be closed.
The LDF Government decided to grant bar licence to 3 and 4 star hotels which was restricted to 5 star hotels till now. Consequently, 700-plus bars became eligible to be reopened. The policy also allowed the bars to remain open from 11 am to 11 pm, and in tourist destinations, they are given an extra hour which permits them to start functioning from 10 am. The domestic terminals of three international airports were also given the freedom to serve liquor. The LDF policy also allowed Toddy, Kerala’s own brew, to be served in hotels classified 3 star and above.
At present, there are 815 beer and wine parlours functioning in Kerala. Of the 34 club licensees in the State, only 18 remain open now. But the problems did not end there. Many in the industry are upset that even the new liberalised liquor policy could not help completely ward off the concerns of the industry. What prompts them to think like that is a December 2016 order of the Supreme Court necessitating closure of all liquor vends situated within a distance of 500 metres from the National and State highways. The ban applies to bars, hotels and restaurants that serve liquor.
As of now, only 23 of the 30 five star hotels in Kerala have bars as the remaining seven could not renew the licence on account of the Supreme Court order. The Kerala State Tourism Development Corporation (KTDC) also had to close down 29 beer parlours following the SC order. However, KTDC is in the process of identifying alternate locations to re-open the beer parlours. “Since identifying new locations is a time-consuming process, we expect it to be completed over the next two to three months,” said M Vijayakumar, Chairman, KTDC.
Says Mahadevan, General Manager, Radisson Blu, Kochi: “Our focus now should be to drive positive outcomes such as ensuring the growth of tourism sector and hospitality industry, increasing employment opportunities and ending the brewing of adulterated liquor. The policy will help lift Kerala’s status as a prominent tourism destination and go on to meet the demand of today’s urban lifestyle.”
We have informed international tour operators about the Kerala Government’s decision and all of them are very excited about the development. MICE business will be revived, no doubt, but I do not think it will reflect in the coming tourism season. It will take some more time and the industry may reap the results in 2018 tourism season. The Apex Court’s 500-metre liquor ban on bars and restaurants on highways is also playing spoilsport - Ranju Joseph, Director, Pioneer Personalised Holidays Pvt. Ltd.
We believe that the biggest factor helping the tourist arrivals would be a proper excise policy which can compete with ever-increasing competition from neighboring destinations especially Sri Lanka. Kerala Government’s new liquor policy is a hardheaded step that will improve the dent caused to the state’s tourism sector. The number of FTAs to Kerala will see new heights this year. It will have a positive impact on the growth of the MICE business. Around 70 per cent of hotels/resorts have conference facilities and almost 50 per cent of the tour operators handle MICE which becomes a major revenue generator in the industry. The decision to allow serving of beverages in banquet halls during corporate functions, conferences and social events will be a shot in the arm - Mahadevan, General Manager, Radisson Blu, Kochi
The current modification in liquor policy is sure to give a boost to the tourism industry, which has been suffering from the construction of Kochi Metro, liquor ban, demonetisation, new policies etc. for the past three years. With the new policy in place, we expect that Kochi will get back its lost sheen and glory as a MICE destination. Foreign travel agents and tour operators have skipped God’s Own Country as a result of the series of bans and we are almost out from the tour packages. Great efforts are needed to regain the lost rhythm and confidence among the stakeholders to bring back the visitors. The hotel industry also needs to change by adopting new eco-friendly services and amenities without causing further damage to the already fragile nature - Achuthan Menon, Corporate General Manager, Renai Hospitality & Health Care, Kochi
MICE was largely hit compared to the normal business/leisure traveller segment. Since most of the MICE events are held with cocktail dinner, the corporates looked out for new destinations wherein they could have all the facilities. In due course of time the industry may survive but the ban surely brought down the growth-at least in domestic tourism and MICE sector. Now, with the revised policy we are expecting a positive move in the industry - Ajith Prasad, General Manager – Sales, B’Canti Beach Resort, Varkala
Liquor policy has a bearing on tourism in many ways. It is all about perception of a destination. Who would go to a place where there are bans, be it liquor or dress or food. Until and unless you are targeting a specific segment like pilgrimage tourism or visitors who wants to stay away from liquor, it is better to have a moderately liberal liquor policy. Kerala is not an exception to this universal law. Though liquor was not banned and only bars were banned, the message that went out to tourism industry and tourists was that of a total ban. The result was evident in the past 2 years when we had a slowdown in domestic and inbound tourist arrivals - Sajan Joseph, CEO & Co-founder, BreakOut Hotels
On January 29, 1919, Congress ratified the 18th Amendment to the US Constitution, effectively banning the manufacture, transportation, and sale of intoxicating liquors in the country. The law, which ushered in the era known as Prohibition, went into effect one year later. Organised crime received a major boost from Prohibition. Consequently, organised bootlegging emerged in response to Prohibition. A profitable, often violent, black market for alcohol flourished. Same situation is panning out in Kerala too. Multinational companies have moved their events and official banquets are now in Tamil Nadu and Karnataka. With the new policy, those businesses have to come back; but it sure will take its own time - KP Sethumadhavan, Marketing Manager, Hotel Indraprastha, Palakkad
The new liquor policy moots the novel idea of serving Toddy, Kerala’s own brew, in star hotels. The industry generally has welcomed the move, but many are doubtful about ensuring the supply of it. Coconut farmers are also sceptical about being able to meet the demand. Though reports say that production of Toddy is very low, it has never affected the supply in any way which, in turn, raises the possibility of adulteration of the brew on a large scale. The farmers say that they see no logic in the government decision as nothing has been done so far to keep the productivity high.
“Toddy is a favourite drink of many. Now people flock to Toddy parlours. Those who would like to taste the drink but were not interested in going to Toddy parlours could enjoy the drink in the comforts of a hotel. But what is to be made sure is that there will not be any scarcity of the drink. Apart from all these, when we sell Toddy through star hotels, Toddy tapping would become more organised. It is the suppliers who have to make sure that quality Toddy is made available in hotels according to the demand. It will also create more employment,” the Tourism Minister said expressing hope that star hotels would start serving Toddy.
“The idea to serve Toddy in classified hotels, especially in resorts and bigger hotels, is a good move. But the main question is whether good Toddy is available in the market? There is always demand for good Toddy but storage, expiry control etc. are the greatest challenges,” says Achuthan Menon, Corporate General Manager, Renai Hospitality and Health Care, Kochi.