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Sri Lanka: Arrival numbers not important, but $250 tourists are

Written by editor

“The travel and tourism industry is going through radical change, and unless we adjust, we will perish.

“The travel and tourism industry is going through radical change, and unless we adjust, we will perish. The formal sector being flat on growth in Q1 whilst tourist receipts up 14% are indications of the reform required on policy and [the] private sector business model.”

While the Sri Lanka Tourism industry can be proud of the end of July performance of 2015 at end of the month, visitor arrivals were up 16.8%, crossing the 1 million visitor arrival mark with July recording 31.2%. The Chairman of the Sri Lanka Tourism Promotions Bureau, Dr. Rohantha Athukorala, voiced that “Sri Lanka must stop chasing visitor arrival numbers but focus on attracting the $250 per day guests into the country if we are to make the industry financially viable” at the SKAL EGM which he was the key note speaker hosted by Galadari Hotel. He went on to mention that revenue growth being flat in the formal sector was worrying given that central bank confirms the tourism receipts at a 14% growth.

SKAL was founded in 1932 in Paris by travel managers and the idea of international goodwill and friendship grew and, in 1934, the “Association Internationale des Skål Clubs” was formed with Florimond Volckaert as its first President, who is considered the “Father of Skål”. Today, the organization has earned it self the reputation to be the ‘Voice of the Tourism Industry” and in Sri Lanka attracts the best names of the sector making it a key stakeholder in the industry under the leadership of Dushy Perera.

Dr Athukorala’s logic of targeting the minimum threshold traveller of $250 was that given the high cost of construction and labour in Sri Lanka, unless we have a hotel property that can attract a $250 it will not be financial viable. If not the owner will have to wait for asset enhancement alone which is not a strong business model that can be marketed for a potential investor he commented. Whilst we can do all the focussed B2B marketing on a private-public partnership for us to attract a $250 tourist Sri Lanka needs a strong brand building communication campaign targeting UK/Europe traveller who nets in a 22% of the net proceeds whilst though the Asian travellers account for a higher footfall due to India and China the revenue to the country is only 13% which clearly justifies the argument for the core markers to be Europe. The sad story is that for the last 3 years we have neglected the western markets by pumping in a colossal Rs.860 million to China alone which needs to be balanced if we are to name the industry financially attractive said Dr Athukorala who also has experience of serving the 12 billion dollar export development board and the Sri Lanka tea board for the last five years that gives him an insight to the cross sectoral policy issues the country needs to address.

The reason for the informal sector booming was the online travel agencies driving growth explained the Chairman. A typical dot com has over a 4000 entities in the list whist at SLTDA we have around 1200 registered which explains the gap on the number on arrivals. We don’t have to go far even in the formal sector on line booking was just 4-5% around four years back and today it has shot to as high as forty percent which means the business model has to change. The industry is going through radical change and now the industry has to align. We cannot change the game, we have to now do reforms on policy and as a business model voiced Athukorala.

Whilst commending the SKAL members for the strong private- public sector partnership on the below the line marketing strategies he urged the industry to focus to strategically positioning the country with brand equity developing initiatives and be vocal in an appropriate manner post the 17th August so that policy makers give priority to this issue and the radical changes that are required in the industry he said. The good news us that the top 8 global advertising agencies has expressed their interest in the Global Tourism tender pitch. We must now get things firmed up for a quick launch globally said Athukorala.