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Only 50% of tourists to Sri Lanka patronise star class hotels!


Comments / {{hitsCtrl.values.hits}} Views / Thursday, 29 June 2017 00:00


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Before this analysis is presented in this paper, it may be worthwhile to establish some clear definitions as follows:

  • Foreign Guest Nights (FGN) are recorded directly from individual hotel establishments, which indicate the actual number of nights spent in a particular hotel by foreigners.
  • Graded establishments are categorised by the Sri Lanka Tourist Development Authority (SLTDA) as conventional star class hotels and boutique hotels 
  • Supplementary establishments are the smaller guest houses and home stay units (the so-called ‘informal’ sector), which are registered with SLTDA.
  • Informal establishments are the smaller units (the so-called ‘real informal’ sector), which are not registered with SLTDA.

(I am thankful to the SLTDA for releasing this information to me, even though the annual statistical report for 2016 is not available yet. As such the figures are provisional.)

The total number of tourists as recorded by the Emigration Department and published by the SLTDA for 2016 was 2,050,832. 

FGN in star class conventional hotels for 2016 was 1,595,118 according to the SLTDA, and average stay per tourist in the country 10.2 days. Hence by diving the FGN by average stay, the total number of tourists staying in conventional hotels is derived. 

This reveals that the ‘real’ tourists staying in graded (conventional) hotels is 1,025,416, which is only about 50% of total arrivals 

The total FGN generated by the supplementary sector for 2016 is 5,404,602. As before, dividing this by the average stay of 10.2 indicates that some 529,863 tourists stayed in these supplementary establishments, which is 26% of all arrivals 

The balance 24% is the unaccounted ‘leakage factor’. This leakage could be some ‘tourists’ who do not stay in hotels such as the diaspora element. The other part of this ‘leakage’ are the tourists who stay in the real unregistered informal sector. 

 

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These are the large number of unregistered small ‘bed and breakfast’ units that have sprung up in all popular tourist cities on the ‘round trip circuit’, whose statistics are not caught up in the SLTDA records.

Hence to summarise the foregoing:

  • Of the total tourist arrivals for 2016 (2,050,832) only 50% (1,038,737) stayed in conventional hotels, while 26% (529,863) stayed in supplementary (registered) accommodation
  • Hence the total number of tourists staying in all SLTDA registered establishments was only 76% (1,568,600)
  • About 24% (482,232) of tourists are thus ‘unaccounted’ for because they are staying in the unregistered informal establishments.

This could be the reason that graded star class hotels continue to struggle to maintain high occupancy levels and yields, in spite of the overall arrival numbers showing large increases.

Note: In discussing this with several other industry colleagues, the general consensus was that due to possible estimations in some of the STDA figures, the actual number patronising conventional hotels could be even less than 50%! 

Where have all the tourists gone? 

Where have all the tourists gone?

Gone to the informal sector most everyone 

When will they ever come back? 

When will they ever come back?

– With apologies to Pete Seeger/Kingston Trio/Bob Dylan et al.


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