A thought on entrusting tourism promotion to a Joint Council

Tuesday, 5 November 2019 00:00 -     - {{hitsCtrl.values.hits}}


It is with much empathy that we understand the plight of the tourism and hospitality industry with regard to the current strength of tourism promotion which, according to them, appears to be inadequate to bring the required numbers to fill the hotels, specially the large entities.  

These are thoughts  after seeing comments of THASL Sanath Ukwatte where he had demanded to ‘reform the Promotions Bureau and to transfer the control of the promotions fund to the Tourism Joint Council in a bold, new and ambitious public-private partnership’.

In this connection it is important to be aware of the process how the present Tourism Act came into being and ramifications thereafter before visualising a structure to carry out effective integrated tourism campaigns with the collection of taxes. 

My article under the caption ‘Tourism development and some thoughts on Samaranayake report’ appeared in a newspaper 10 years ago (1 October 2009) soon after the Tourism Act 38 was gazetted (creating four institutions to handle respective areas of tourism development thus leaving the tourism promotion in the hands of Sri Lanka Tourism Promotion Bureau), was to shed light on the problems which the industry is facing since then.

Those who were connected to tourism may remember an integrated worldwide campaign was carried out from 2009-2012 by Ogilvy and Mather following a stringent procurement process. The members of the selection committee comprised this writer, Dileep Mudadeniya, Rohantha Athukorala, Shashikala Premawardena and Weerasinghe (the procurement expert). The two envelop system was introduced to lessen the complications in the procurement process and maintain transparency.

Except for the tagline ‘Small Miracle’ issue, the project moved smoothly. Not wanting to rock the boat, SLTPB went ahead with the political tagline of ‘Wonder of Asia’. The only such campaign that was done prior to this was 1996 when the contract was awarded to Manning Selvage and the writer then acted as Secretary to the Selection Board with the substantive position as Director Marketing of the Tourist Board, hence the unfolding of facts to my recollection. 

Yes, Ukwatte’s proposal to bring in an amendment to Tourism Act is understandable. However there are many nitty-gritties that have to be sorted if this is to be a reality.

The idea of the then Minister Milinda Moragoda was to implement the Act and then go for amendments after monitoring the performance within a given period. He took this decision in good faith when the new Act had stalled after it was passed in the Parliament.  

With regard to promotions, the recent global campaign did not take off because of procedural issues. There is no way a tender process floated by one institute can be implemented by another, viz. SLTPB.  Claims such as ‘closeness’ to politicians wouldn’t work in reality particularly after some officials were subject to investigations since 2015.

If mega campaigns were possible in 1996 and 2009, the reason why not now needs to be investigated before amending the Act which is a long process through the Legal Draftsman to the Parliament. Besides, such an amendment may warrant transferring funds to a Joint Council which will continue to be under financial regulations, meaning proper tender processes, assuming that such a council will have more public sector members. 

The tax is collected from the consumer viz. the tourist while industry collects it and passes it on to SLTDA. It was vehemently argued by a former chairman that the funds belong to the Government or the people and not the industry although it was the industry that pursued this proposal for several years when the SLTB had a mere allocation of Rs. 100 million per year from the Treasury. 

Nothing will prevent this argument being brought forward by anyone in the future considering the tax collection is not necessarily for promotions but also for development, investment, infrastructure and regulation too. This raises the question for the allocation of percentages for each institution. 

For instance, the Convention Bureau, the smallest institution, was given 4% which was felt more than enough by many experts without realising that Sri Lanka is way behind in convention and exhibition business without a multipurpose translatable convention centre while Nelum Pokuna and Hambantota became white elephants as they are mere ‘auditoria’.  

The exhibition space in Sri Lanka is full and SLCB would have pursued a strategy to lease out a land to an investor as India did in Hyderabad which was an ideal model for Sri Lanka. Instead, SLCB had to be content mainly with incentives and the industry was happy at the cost of unseen long-term prospects for the country. This is just one example.

Ukwatte had rightly pointed out that ‘over the years the promotions fund had monies accumulated that was not utilised for the launch of the key global campaign as a result of which we lose potential tourists, potential revenue streams and potential investments’. This is true but the cause of this is the lack of coordination and corporation between the polity and bureaucracy as I mentioned in my article in this paper on 27 August 2019. 

Not long before, there were reports on a disagreement between the Ministry and SLTPB on the policy of promotion during a previous government and one could even read about this tussle in the Wikipedia profile of the said chairman. The industry became helpless. Amending the Act is therefore of no use when there is no clear understanding with the hierarchy. 

There was also the question raised by the SMEs that major trade associations are represented on the boards of four tourism institutions including ASMET. The implementation of global campaigns can be discussed at board level summoning responsible officers on as to why things are not moving. For instance, the gamut of the work including participation of trade shows by SLTPB seems to be moving smoothly and how is it not possible for a mega campaign? Who is blocking what and how?

As Ukwatte explained, many countries are handing over the control of tourism promotion funds to the private sector; it is worthwhile studying Malaysia, Singapore, Thailand and India to see which model works for Sri Lanka based on the political and bureaucratic structure in Sri Lanka. 

Maldives had done a comprehensive consumer research in 2018 which is publicly available online that reveals what promotional strategies the country needs. From the marketing parlance, such a consumer and trade research findings are needed to ascertain the components of promotional methods, modes, and what combinations to be adapted rather than just firing shot guns towards known and emerging markets. The industry will otherwise confront the allegation that hotels are only interested in filling the rooms.

That said, there is certainly an issue without a global campaign. Everyone was happy when the numbers were picking up as against previous year until April. However, it is noted that the September figure is less than August in this year despite the Bohra conference and hopefully this will not be the case in October from September.

If the Act is to be amended, it needs to take into consideration many other important areas. Identifying tourism zones and gazetting them, establishing new tourism resorts, investment promotions, regulating tourism institutions and plants, tourism and hospitality training, promoting domestic tourism, projecting Sri Lanka as a location for special interest tourism including events, offering support for new entrants and entrepreneurs, encouraging innovators, etc. are some of them. 

Funds are also needed to equip tourist police to ensure safety and security as one hostile incident could mean hundreds of cancellations. It should also specify the role of classifications committee and how they could meet the tasks with sub committees if necessary. Recommendation of liquor licenses is a major issue for SLTDA with political interferences. It is better if the new Act clarifies the framework for such actions.

For a layman, the Act is expected to simplify procedures, reduce excessive bureaucracy and fast track programs envisaged to reach short and long-term goals. All these can be reviewed now after many years of operations.  

Proper legal advice is essential. This is because until the Act was gazetted last time, no one knew that SLTPB was just another corporation subject to AR and FR and paradoxically SLCB which hitherto functioned as a private institute since the ’80s with complete autonomy became a corporation. Thanks to Minister Moragoda, things were cleared within a shorter period as there were two SLCBs for several months and the industry wasn’t even aware of this. 

The point I am raising is that Act needs to be amended to reshape the policy as to what the country needs based on findings of trade and consumer research plus the gut feelings of experienced industry members. Until then, every statement made by a private sector member whether on stage or at meetings is construed as expression of vested interest, like Ukwatte’s statement, although he has a strong point.

The industry will understand that promulgation of the present Act was a bold move and in fairness to the Minister then, an ‘oversight committee’ was appointed to closely monitor the functions and rectify any defects, while gathering policy issues to be ratified in one go, by way of an amendment. What happened to this committee?

(The writer is a former diplomat and tourism official and is currently an academic.)

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