Sri Lanka as a tourist destination has the potential and the ideal recipe to allure at least nine million tourists per year. This dream could be realised with a pragmatic approach backed by systematic planning, said Aquarius Resorts (Pvt) Ltd., CEO Dr. Dietmar Doering in an interview with the Business Observer last week.
Excerpts of the interview:
Q: How do you view the current status of the tourism industry and its strengths to be the leading foreign exchange earner to the country?
A: Seven months into the Easter Sunday carnage, the tourism industry is still struggling to recover from the fallout of the terror attacks, which plunged the critically important economic sector into depths of despair.
Five-star and boutique-style hotels also suffered a crippling blow with occupancy still hovering around a marginal 37 percent – hardly adequate to cover overheads. However, the position of these luxury properties in no way reflects the overall ground situation in the tourism industry.
With salary, rental, loan, EPF/ETF commitments, taxes et al, the luxury hotels need at least a 50 percent occupancy ratio to keep head above water.
Far more pathetic is the plight of the assortment of 2-star and 3-star hotels, and guest houses spread across the country. They are now in total disarray. This category of middle class accommodation depends largely on direct inquiries through online platforms, such as Expedia, Booking.com, Agoda or Airbnb.
A survey conducted on middle class hotels and guest houses in Sri Lanka by AGSEP Research – an institute, which provides services and data to international universities, the outcome was less promising. The forthcoming high season in the western coastal belt looks grim with cancellations of more than 50 percent reservations in comparison with last year’s performance.
A few Sri Lankan hotels in the upper class segment are still performing quite well, thanks to their contractual partners overseas, with leading tour operators such as TUI, Meiers Weltreisen and others continuing to tap markets in Europe. They provide bookings for some of the top Lankan chains, such as Jetwing and John Keells. This category was also hit by the downturn, but in a more mild manner.
Sri Lanka’s hospitality industry, in terms of numbers, concentrate more on provincial areas and the coastal belts, which offer budget rates to travellers. This sector has been badly affected by the downturn and is fighting a lone battle to keep their businesses going.
As reiterated in my previous articles, the Tourism Ministry has so far been unable to tackle the exorbitant airfares from Europe to Sri Lanka. First-time travellers from Europe could become ‘repeaters’ if reasonable airfares are offered, but unfortunately, there is still no sign of seeing any efforts to take up this important issue directly with international airlines.
It would have been a promising step to directly invite the heads of Emirates, Qatar, Etihad, Oman Air and Turkish Airlines, the major carriers from Europe to Sri Lanka, for a discussion to sort out the question of costly airfares to Colombo.
The Minister of Tourism could have made this a priority ‘must do’ on his calendar as exorbitant airfares are a disincentive to prospective European travellers. There is sufficient room for airlines to offer airfares in the range of 450 to 500 Euros per traveller to Sri Lanka, which is on offer for other destinations, such as Bangkok, Kuala Lumpur and Vietnam. The Minister should intervene in this matter, and this has to happen swiftly before Sri Lanka’s tourism industry slides further down the precipice.
Sri Lanka’s tourism is still struggling to achieve an annual 2.3 million tourist arrivals target, while being outperformed by Vietnam, which has reached a remarkable 10 million tourists so far this year. Thailand and Malaysia are eying 40 million annual arrivals by the end of 2019.
The Tourism Ministry should take meaningful steps to invite the airline bosses to Colombo and work out reasonable airfare structures from Europe, which was at one time the major market for Sri Lanka, but has witnessed a drastic drop in recent times. The high-end spenders are the Europeans, and at the same time, more Europeans do their bookings online avoiding tour operators. This was one of the key factors which led to the recent collapse of the giant tour operator Thomas Cook.
Q: What are the impediments that stifle the growth of the industry?
A: Sri Lanka remains an awe-inspiring destination to the discerning traveller in this part of the world – an island endowed with incredibly captivating natural scenic beauty coupled with fascinating diversity.
There are the ‘ups’ and ‘downs’ in tourism as well, and countries do take a battering from time to time as negative developments unfold, and the bad news grows wings.
As history has clearly taught us, no country, whether big or small, could be immune to terrorism, which can unleash a senseless killing spree. Even the US, considered the world’s superpower, could not save New York’s World Trade Centre.
Sri Lanka’s giant neighbour India suffered one of its worst attacks when terrorists stormed the Mumbai Taj Hotel in November 2008, which left 166 people dead. The list can go on from Bali (Indonesia) to Egypt, the UK, France and Norway.
After 10 years of relative peace, it was unimaginable that Sri Lanka would experience another bout of devastating violence, as it sadly did on that Easter Sunday. The multiple attacks proved that terrorists can strike anywhere, any time.
With normalcy prevailing, tourist arrivals are on an upward trend. With the past behind us now, what is critical at this juncture, as an industry expert outlines, is to “look at the bigger picture in terms of the number of arrivals”.
Sri Lanka’s tourism industry is still in its infancy in terms of planning and forward movement, and as a result, the whole sector is under-performing.
As a worthy destination in its own right, Sri Lanka has the potential and the ideal recipe to allure at least nine million tourists per year. Or at least five million for a start. With a pragmatic approach backed by systematic planning, this big dream can be realised. When it comes to tourism, the sky is the limit.
Vietnam fought a long, protracted war. It was the mostly heavily bombed country in history, with more than 6.1 million tons of bombs dropped, compared to 2.1 million tons in World War II.
What is Vietnam’s position now as a nation, which virtually rose from the ashes? Today, the country attracts an incredible 10 million plus tourists per year.
Thailand is way ahead with 30 million annual arrivals, while resplendent Sri Lanka is still struggling to go beyond the three million mark. Even ‘Lonely Planet’ has acknowledged that this ‘Land Like No Other’ is an “Incredible Place to Visit”, but then why is it that the country cannot attract even half the number of tourists that Vietnam boasts of?, the industry expert queried.
He said that vigorous international promotional campaigns are helpful, but to start with, the airfare to a destination should be the initial attraction as prices are key to the average traveller. A holiday-maker keen to visit Sri Lanka will think twice because the airfares from Europe to Colombo are more expensive in comparison to most other popular destinations in the region (example: Thailand, Malaysia and Singapore).
Another disincentive is the six-month period termed ‘off season’ in Sri Lanka. It’s a misnomer, which discourages potential travellers as the misconception virtually paralyses the east and west coastal tourist centers for six months each year. Unlike in India, Pakistan and Bangladesh, there are no devastating storms, which batter the island placing lives at risk. Sri Lanka is not exposed to such harsh weather conditions. Tourists can enjoy Sri Lanka’s bounty of attractions any time of the year.
Q: What policy measures do you propose to revive the industry?
A: The removal of the major two misconceptions, such as the Off season misnomer, which creates an only 6 months season for tourists in Sri Lanka and the exorbitantly high airfares to Sri lanka, which blocks first time travelers to select Sri Lanka as their destination is crucial to revive the industry.
Q: How does your property help promote and attract the high-end travel sector, key to boost revenue to the industry?
A: It is the large middle class of tourist hotels in the categories of 2 and 3 and 4 star hotels and guest houses where the focus had to be put first.
This sector provides the most numbers of employment opportunities to the people. I am not a fan of focusing too much of the high end clients, since Sri Lanka at this point doesn’t has to offer much for this tourist categories. Night life in Colombo is non-existing and not everyone goes to bed at eight.