Goa’s parallel tourism economy is no longer confined to informal guesthouses or seasonal beach rentals. It is increasingly operating inside residential housing societies, where flats are being used as unlicensed short-stay accommodation while avoiding the regulatory obligations imposed on hotels, homestays and registered bed-and-breakfast establishments. The result is a governance problem that reaches beyond lost tax revenue: residential buildings are being made to function as hotels without necessarily having the safeguards, approvals or consent expected of hospitality businesses.
The issue has emerged as Goa continues to attract very large visitor numbers. The state recorded 1 crore tourist visits in 2025, including 99.4 lakh domestic travellers and 4.7 lakh foreign visitors, according to the report. By July this year, 59 lakh domestic and 2.4 lakh international travellers had already arrived. Those figures underline the scale of tourism demand, but they do not show where visitors are staying or whether the accommodation infrastructure serving them is operating within the state’s regulatory framework.
That distinction is central to understanding Goa’s housing challenge. A licensed hotel or registered homestay is subject to several layers of oversight. The report identifies tourism department registration, panchayat trade licensing, food and drug administration scrutiny, fire and pollution clearances, excise requirements and GST obligations. It also notes that licensed operators pay commercial rates for water and power. A residential flat offered through nightly bookings may avoid some or all of these requirements while competing for the same tourist demand.
The reported price difference helps explain why the informal model can expand quickly. Unlicensed flats are said to undercut licensed operators by 15% to 30%. The report estimates that 5,000 such flats, operating for 150 nights a year at Rs 5,000 per night, would represent an informal economy worth roughly Rs 375 crore outside the tax net. That is an estimate based on stated assumptions, not an official measurement of the entire market, but it illustrates the financial incentive created when residential properties can earn hotel-like revenue without carrying equivalent compliance costs.
The reported number of unregistered tourism units is larger still. Legislators in the state assembly have put the number of unregistered tourism units across Goa at 12,000. The report does not establish how many of these units are flats inside housing societies, how many are independent houses or small lodging establishments, or how many remain active. That lack of a comprehensive, publicly explained inventory is itself part of the administrative difficulty: authorities cannot effectively regulate a market that is not fully visible.
Goa’s own homestay and bed-and-breakfast policy recognises the risks associated with placing tourist accommodation inside residential societies. Clause 4.5 bars registration of a homestay in a housing society without a no-objection certificate from the managing committee. The policy cites residents’ security and the continuous entry of unknown individuals. Clauses 4.3 and 4.4 also require the owner or a resident agent to live on the premises.
These conditions establish an important principle: tourist accommodation is not treated as an entirely private use of a flat. Once a home becomes a commercial short-stay property, it affects shared corridors, entrances, parking, waste systems, security arrangements and the everyday expectations of other residents. The requirement for an NOC attempts to place part of that decision with the housing society, where the consequences are experienced directly.
Tourism director Kedar Naik cited the NOC requirement as evidence that the government has acted. “We have made it mandatory to obtain an NOC from housing societies if the flat has to be registered as a homestay or bed-n-breakfast,” he said, according to the report. The policy, however, only governs properties seeking registration. It does not by itself resolve the problem of properties that operate without entering the registration system.
That enforcement gap is reflected in warnings from the Travel and Tourism Association of Goa. In 2025, the association wrote to the tourism department about small hotels, bed-and-breakfast establishments and homestays operating without trade licences, tourism licences, food and drug administration approvals and fire clearances. The association said the government was losing registration fees and taxes paid by compliant businesses.
At the same time, the registered market has expanded. TTAG president Jack Sukhija said registrations of hotels and guesthouses increased from 3,500 to 9,000 over five years after the tourism department simplified the registration process under ease-of-doing-business measures. He said a significant number of unregistered units had subsequently registered, although some could still be operating inside housing societies. This suggests that the problem is not simply a lack of legal pathways. It may also involve weak detection, limited enforcement or an economic preference for remaining outside the system.
The residential impact is more difficult to quantify but more immediate for people living in affected buildings. The report describes concerns among senior citizens, single women and families who find unfamiliar visitors becoming temporary neighbours. It also refers to the absence of verification, guest registers, C-forms or the T.I.M.E. software footprint for such stays. These mechanisms are relevant because regulated accommodation produces records and assigns responsibility. An unregistered flat can make it harder for a society, local authority or law-enforcement agency to know who is occupying a building and under what arrangement.
An Arpora resident quoted in the report said the government should enforce the bed-and-breakfast policy and remove unregistered properties from online travel aggregators, arguing that the issue involved more than tax or nuisance. The statement points to the role of digital platforms in expanding the market. Online visibility can convert an ordinary flat into a tourism asset rapidly, while the physical building continues to be governed as a residential property. This creates an asymmetry between the speed of commercial listing and the slower processes of licensing, inspection and local enforcement.
The investment logic behind these conversions is also becoming clearer. Villas and apartments bought for Rs 3 crore to Rs 10 crore can generate substantial returns when leased to operators running informal homestays. Vijay Shetty, group head for commercial banking at Axis Bank, said the bank had seen strong growth in informal hospitality operators approaching it for loans. He said the bank registers such customers as micro, small and medium enterprises when they take a loan through the bank, and that the bank expects continued growth in the segment.
This indicates that informal tourism is not necessarily a marginal activity carried out by occasional homeowners. It can be connected to property investment, leasing arrangements, credit and professional operating models. The term “informal” therefore describes the regulatory position of some operators, not necessarily the size of the capital involved. A high-value property can participate in a low-compliance business model, particularly when short-stay income is more attractive than conventional residential leasing.
Tourism Minister Rohan Khaunte acknowledged the problem during a meeting with Yuva Clubs. “There are a lot of unverified accommodation that is being shown on the Internet,” he said, adding that some properties were not registered with the department even when travellers arrived or departmental checks were carried out. He said such practices had to be removed.
The minister’s statement places the issue within a wider question of state capacity. Goa has multiple actors with overlapping responsibilities: the tourism department, panchayats, housing societies, enforcement agencies, fire authorities, the food and drug administration, tax authorities and online platforms. Each may see only one part of the transaction. The tourism department may focus on registration, a panchayat on trade licensing, a housing society on access and security, and a platform on listing information. Without an integrated system linking these responsibilities, unregistered accommodation can remain visible to tourists while remaining opaque to regulators.
The policy challenge is complicated by the fact that tourism is a major source of employment and livelihood. Fr Malcolm Colaco of the Centre for Responsible Tourism said tourism growth had also brought congestion, waste, pressure on natural resources, over-dependence on a few popular destinations and the gradual marginalisation of local communities and traditional livelihoods. His comments broaden the issue beyond the legality of individual flats. The question is how much additional tourism activity a place can absorb, through which types of accommodation, and with what consequences for residents and local infrastructure.
Goa’s visitor numbers show strong demand, but demand alone does not determine whether the urban system is functioning well. A residential society has a designed capacity for movement, parking, waste collection, water supply and security. A short-stay accommodation business may increase the intensity and unpredictability of those uses without changing the building’s formal classification. The cumulative effect may be experienced as noise, unfamiliar movement, waste or pressure on common facilities even when no single booking appears large enough to create a measurable impact.
This is why the housing-society NOC is more than a procedural document. It is an attempt to recognise that property rights operate within shared urban systems. A flat owner may control the private unit, but guests use common entrances, lifts, parking areas and circulation spaces. The policy’s requirement that the owner or a resident agent live on the premises similarly tries to preserve a line of accountability that is weaker when an entire flat is handed to an external operator.
Technology could help close some of the visibility gap. Colaco said technology could make lesser-known destinations more visible, connect visitors directly with local experiences and promote responsible travel while curbing uncontrolled mass tourism. The same principle could apply to regulation: a more complete digital register of approved accommodation, connected to local authorities and platforms, could make it easier to distinguish registered properties from unverified listings. The supplied report does not establish whether such an integrated system currently exists or whether authorities have adopted a specific platform-level enforcement mechanism.
The evidence presently confirms three things. First, Goa has a large and growing tourism market that creates strong incentives to convert residential property into short-stay accommodation. Second, the state has formal rules requiring registration, housing-society consent and on-site accountability for recognised homestays and bed-and-breakfast units. Third, officials and industry representatives acknowledge that unverified or unregistered accommodation continues to appear online and operate within the wider tourism economy.
What remains unclear is the precise size and geography of the parallel market, the number of residential societies affected, the volume of unpaid taxes and the enforcement action taken against specific properties. Those gaps matter because the solution depends on more than statements of intent. It requires the state to identify units, coordinate agencies, clarify responsibility and ensure that online visibility does not outpace legal recognition. Goa’s tourism challenge is therefore also a housing and governance challenge: the state must determine where commercial hospitality can operate, what safeguards it owes to residents and how growth can be recorded rather than allowed to disappear into residential buildings.
