Tourism and hospitality: A critical driver of growth
Thursday, 14 November 2013 00:42
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By Cheranka Mendis
A key driver in developing an economy, tourism is a sector that has experienced almost uninterrupted growth since the 1950s. Latest records have shown that the Asia Pacific region is growing the fastest, with China as the number one source market, and Simonds Farsons Cisk, Malta Chairman Louis Farrugia noted that every tourist dollar earned has a high multiplier effect.
Farrugia chaired the session on the tourism industry and its importance for the world economy at the CBF yesterday.
Clean, green tourism
The traditional approach towards assessing the industry, in terms of arrivals, room nights and occupancy rates, must be reviewed and the environmental aspect added to it, Foreign Employment Promotion and Welfare Minister Dilan Perera said.
Expressing that Mahinda Chinthana framework has taken into account the importance of an environmental friendly industry, Perera asserted that the tourism strategy of the country looks at maximising on green tourism. “We have created seven zones and tourism products, have designed generous tax incentive schemes, and VAT and custom exemptions.”
Anticipating four million tourists by 2020, the Sri Lanka Tourism Development Authority has created a one-stop shop concept for investors.
Sustainable tourism growth: Key issues
Acknowledging the country’s development as the “Sri Lankan economic miracle”, Seychelles Foreign Affairs Minister Jean-Paul Adam stated that Sri Lanka has proved that a country with great challenges can be successful thanks to tourism.
Discussing some of the key issues that need to be addressed by the Commonwealth in order to achieve sustainable tourism growth, Adam highlighted the following:
Growth with equity, with social and economic inclusion: “This creates wealth,” he said. “Seychelles is a luxury destination which is affordable. Even though this sounds contradictory, we have large chains as well as smaller tourist spots.” For equitable growth, the establishment of the right framework for the private sector is important.
Sustainable tourism development: This must revolve around environmental protection. Post 2015, after the Millennium Development Goals, Seychelles will promote the ‘blue economy’, which will focus on maintaining a healthy ocean, and keeping the environment safe and secure for tourism industries thriving on the islands.
Connectivity: Connecting people and country, with a focus on air access, to create more opportunities to enhance connectivity and regional cooperation.
Recipe for success
With 4,000 hotels around the world, employing quarter of a million people, Marriott International President and Managing Director for the Asia Pacific Simon Cooper noted that the recipe for success to build up a thriving industry which is sustainable in the long run has hard and soft assets that need to be looked at.
Hard assets:
The country must have a brand: It has to be a destination people want to visit, safe and secure. “After years of conflict, Sri Lanka’s brand has come through extremely well and it is a brand people enjoy and are intrigued by,” Cooper observed.
Magnets: People travel to places because there is something they want to experience. The industry must identify the magnets that will draw people to Sri Lanka. “How do you tap into tourism infrastructure that creates that demand?” Government infrastructure can create such magnets as well, as seen in Singapore and Macau. “Sri Lanka is one of those countries that have natural magnets,” Cooper said.
Access: Ease of getting there. Sri Lanka is improving its accessibility dramatically. “I am a huge supporter of the Southern Highway, creating airports in different parts of the country and new ports of entry. I think it is incredibly smart that you are creating new tourism regions,” he asserted. “A number of my competitors are investing here because they have seen this country and identified the long term opportunities.”
‘Lift’ or air connectivity.
Visa regime: Are we making the tourists feel welcomed? A billion people crossed borders for the first time last year. “To get to the next billion, we must look at smart visa regimes.”
Soft assets
Human capital: This includes service culture, literacy rate and industry training. Cooper stated: “Sri Lanka has free education and a culture with Buddhist values which puts it in a great position to promote a service culture for the hospitality industry, just like Thailand.” He noted that the quality of the country’s human capital will be the key to success.
Sustainable tourism: The industry will not be able to survive in the long term without that. Listing out the outcomes of an effective tourism strategy, Cooper noted that with this, the industry can reverse urban migration, provide long term careers in geographically disperse locations, create more jobs and enliven dispersed communities.
“It is a great industry and I think Sri Lanka is incredibly well positioned to really benefit from the culture of the country, fantastic locations and the great capital city,” Cooper said. “It is a wonderful country to tour – both for mass tourism as well as luxury tourism. The tea-trails here are one of the most creative tourism products I have seen in any part of the world.”
What authorities can do to help
GML Group Mauritius CEO Amaud Lagesse with his brand Lux (Island Resorts) spoke on creating a connected network of islands in the region to compete in the industry better and obtain better advantages.
The Lux brand is now looking at market diversification, moving away from Europe and South Africa to China, the Middle East and India, with heavy emphasis on promoting the brand as a regional one.
Expounding on what authorities can do to support the industry in general terms, Lagesse made several suggestions, including that air connectivity be improved, a joint brand for Indian Ocean islands be designed, visas eliminated, tax incentives for tourism development be put in place, joint marketing promotion between private and public sector encouraged, twin destinations promoted, and the establishment of duty free centres and world class festivals.
“Governments must be proactive, have close collaborations with private sector and increase connectivity with the open skies concept,” Lagesse said.
Sri Lankan tourism numbers
Sri Lanka Tourism Development Authority DG D.S. Jayaweera asserted that Sri Lanka’s tourism industry is well positioned and is expected to bring in US$ 1.5 billion in revenue by the end of the year.
“Average nights were 10 days in 2012 which has improved to 10.5 this year. Average spending of a tourist per day increased from US$ 65 to US$ 106 between 2012 and 2013.” In a booming economy, the growth benefits filter down to the regional level, eliminating disparities in tourism contribution, Jayaweera added.
Currently, the country has 25,000 rooms in the formal and informal sectors, and 22,000 rooms are to be added with branded hotels due to open up in the country in the very near future. “We are looking to target the high-end market,” he said. “We are proud to say that Sri Lanka is a paradise in every way possible,” he said.
To the skies
SriLankan Airlines Chairman Nishantha Wickremasinghe highlighted that the national carrier flies to 65 destinations in 35 countries, which include 32 destinations in the Commonwealth. He pointed out that connectivity in Africa and Asia must grow and that it is being considered in the airlines’ future plans.
Sri Lanka is enhancing links with African continent, Wickremasinghe said. “We will start flying to Seychelles in three days, which will be the first direct flight to Africa.” This will bode well for the country, as Sri Lanka has diplomatic relationships with 15 African destinations, with plans to improve on this record. “Cooperation and closer relationships are important in growth.”
“Sri Lanka is in a position to capture some of the fastest growing travel flows in the world.” Investors have opportunities in the Government’s concept of creating a aviation hub, he said.
