Why Goa is looking to go upmarket – and banish Brits and backpackers

The sun is setting over the sea at Vagator beach and the smell of marijuana drifts from a grubby bar a little way up the road, where the flotsam and jetsam of Goa are gathering for their evening descent into oblivion. A retired western couple pick their way between the cows and the rubbish, pausing to glare grumpily at the young Indian tourists who swoop around them on hired mopeds, whooping and passing bottles of beer.

Goa is India's good-time state, the hedonistic hippy haven whose promises of sun, sand, cheap beer and drugs transformed it into a magnet for backpackers and budget tourists looking for an alternative to the Spanish costas. With the collapse of the Indian rupee this year, it has never been more affordable. But the love affair is waning. Years of mismanagement and decline have prompted many British tourists to go elsewhere.

Good riddance, says Goa. It doesn't want them any more. Nor does it want anyone else on who's on a tight budget, including Indian tourists. Tired of being India's answer to Blackpool, it wants to go upmarket.

"The image of Goa is being destroyed," says John Lobo, who speaks for owners of the state's popular beach shacks. "What Goa should try to do is stop cheap Indian tourists as well as cheap foreign tourists. I would say the middle-income plus the rich tourists should be welcome. There are a lot of European tourists who come here who hardly spend any money."

Now, with the season about to get under way, the talk is of a cleanup and a new direction. Drinking hours have been slashed, dance bars banned, raves raided, drinking on the beach forbidden. The ministry of tourism has allocated £7.5m for tourism projects, including a golf course, helicopter tours and a cruise ship terminal. There is talk of oceanariums and theme parks.

It may be too late. International tourist arrivals are down 23% since 2010. Visa fees have soared this year from £32 to £82, plus a processing fee of £10.20, and even with the collapse of the rupee, tourists are eyeing other Asian beach destinations such as Thailand and Vietnam.

Figures released by the tourist ministry last week show the state falling behind many of India's less well-known destinations. Tourism grew by only 0.08% in the past five years. Even Bihar, the country's poorest state, recorded a more impressive rise last year. The number of British tourists has fallen from 154,122 in 2010 to 119,891 last year.

Goa's critics say it has only itself to blame for its predicament and that it has a mountain to climb if it is to attract well-heeled visitors. They argue that successive governments have failed to look after an industry that is now the state's biggest earner. The result is that rubbish is mounting up – huge drifts of it lie at the roadsides – because there is nowhere to dispose of it. The beaches are filthy, strewn with broken glass and soaked in oil discharged by tankers off the coast.

The state is in the grip of drug and property mafias, and low alcohol prices have drawn in large gangs of men who drink heavily and whose presence makes it feel less safe for local women and female tourists. The Foreign Office travel advisory notice to Britons thinking of visiting Goa warns: "Throughout Goa there have been reports of drinks being spiked and travellers, including British nationals, subsequently being robbed, sexually assaulted or dying. In 2012, 29 British nationals died in Goa. Some of these deaths were attributed to drug/alcohol abuse. There has been a series of high-profile incidents in Goa of alleged rape against foreign nationals, including Britons. Avoid beaches after dark. There is a risk of being attacked by packs of stray dogs, robbed or sexually assaulted."

There is little confidence in the justice system. Five-and-a-half years after the death of British teenager Scarlett Keeling on Anjuna beach, the stop-start trial of two men in connection with her death drags on with no sign of a conclusion.

John McGinley, a retired Scot living in an apartment complex in the beach town of Calangute, says tourists feel helpless. "Corruption within the police and their failure to record crimes makes getting justice for foreigners virtually impossible," he says, "because the police quite simply refuse to record crime involving foreigners."

Some of the problems reported in the local papers verge on the bizarre: eunuchs harassing tourists and demanding money on the beaches, and police cutting up sunbeds with chainsaws to clear space on the sand. Many British tourists who normally return year after year have had enough.

One former bar owner, now back in Britain, says his customers were tired of being taken for granted. "We found most Goans only want Brits for their money," he says. "We couldn't stand it any longer: people urinating in the streets, constant spitting, and rubbish dumped everywhere. There are lots of our customers who feel the same way and are not going back."

Good riddance, says Lobo, general secretary of the Shack Owners' Welfare Society. Goa needs a better class of tourist, he says, not Indian men who start fights and chase women because they cannot hold their drink, and not parsimonious foreign pensioners. He smiles wryly as he describes two of his typical customers: "A retired British couple come in every day. The man nurses a single beer, the woman buys nothing, because on the way to the beach they stop off to buy a bottle of water and some pastries from a local shop. When she thinks nobody is looking she stuffs her head into her bag and eats it, then closes her bag."

Others buy one cup of tea, then ask for a separate cup of hot water and share the tea bag between them. "There are a lot of pensioners coming here," he says. "They cannot afford to live back home, but they are telling me: 'We are retired. We spend the heating allowance that the government gives us – that money is enough for us to buy our accommodation. The pension money is more than enough for us to live.'

"It is not that we don't welcome them, but you can't expect everything to be perfect if you don't contribute anything to the running of the state."

Even so, the state authorities now accept that change must come. "After drugs and prostitution, garbage has proved to be the third-biggest hurdle that is keeping away high-spending tourists from Goa," the state's chief minister, Manohar Parrikar, said in a recent speech.

Parrikar, who previously pledged to rid Goa of garbage within three months of his election last year, now promises that three rubbish treatment plants will open within a year. But most of the projects exist only on paper. A long-delayed airport terminal, finally due to open this month, will do so without a mains sewage connection.

There are plans to position hundreds of armed guards on beaches to improve security, but when a police superintendent launched a series of drug raids on rave parties, he found himself chastised by a government minister and transferred to traffic duties.

Actions are harder than words, says Lobo: "There is a lot of nexus between the politicians and the police and the antisocial activities that are going on. If this nexus between the police and politicians stops, things can change for Goa. India is known all over the world as a corrupt country. This corruption cannot be weeded out in a short time."

The slump in the value of the rupee means more Indians will be taking their hoidays at home this year. That could be a shot in the arm for Goa. But Francisco de Braganca, president of the Travel and Tourism Association of Goa, says what it really needs is more tourists who can afford to stay in the state's few five-star hotels.

"We need to make Goa a peaceful destination, not an overcrowded destination where the high spending tourist does not wish to be," he says. "Hedonism is not something I would like Goa to be associated with. If that is the view a tourist is holding, I think we are better off without such tourists."