It was a friendly tour guide lecturer who shared with me a few years ago some stark details of the nature of the commission structure that prevails within our tourism industry.
From the time a tour is undertaken by a tour operating company, several layers of commissions are built on the informal pricing equation associated with that tour, he said. It often begins at the company’s tour desk (sans some exceptions), determining where the stops on the tour should be.
The meals, shopping for gems and jewellery, handicrafts, visits to spice gardens, clothing purchases, elephant rides, safari rides, photographs with mahouts, it’s all worked out and laid before the accompanying tour guide.
According to him, the tour operators who hire their services, have agreements with these entities and even have taken security deposits, some exceeding millions of rupees. In other words, it’s an institutionalised system in place.
The structure of commission sharing on each purchase or service apparently involves several people along the way. The driver, the guide, tour assistant and others along the way, given the nature of the product or service bought.
Apart from not having the choice to visit or shop at will, the visitor ends up paying a cool 60% on top of the market value of that product or service, he claimed. I further verified and found it to be fact.
These indeed are charges beyond the real economic value plus the profit margin of the good or service that is purchased. Upon the return from a tour, the first question asked from the guide, he said, was “how much commission was made?” and not “was the guest happy with the tour?”
I often raised this issue with leaders of the tourism industry and the answers were always, “These are bad times. We are too many, chasing too few tourists” or “It’s not only in Sri Lanka, this is the practise everywhere else” or “We all need to survive and let them earn those extra bucks”.
Please don’t get me wrong. I am all for people in tourism earning the extra bucks. In fact all good tourism must be good profitable business for all involved and it must benefit communities and the people at large.
But that does not mean making it through what I would call an almost vulgar practice of gross over-charging, preventing the freedom of choice of the visitors themselves. On the flip side, this practice also prevents communities at large from benefiting from incomes generated from tourism operations taking place in their own backyards.
Now the scenario has changed. We are no longer “too many operators, chasing too few tourists”. The arrivals are increasing, thanks to the ending of the terrorist menace and Sri Lanka is fast becoming a much-sought-after visitor destination.
It is now our opportunity to shun ‘bad time, bad practises’ and take on ‘all time, good practices’. It is our opportunity to be truly the wonder of Asia, with operations based on integrity and honesty within our tourism domain.
We often complain about what is wrong around us with our society at large; bribery, corruption, deception, etc., but within the bounds of our own industry, we tend to be ones who encourage such practices, through our own modus operandi.
Tourism is an industry with great potential. An industry that can promote understanding between people, be a catalyst for peace and be an activity where sharing and caring takes pride of place.
Our visitors, given the expectations they have of our caring ways, our cultural heritage and the smiling faces, deserve better than to be taken for a good old ride, when they purchase a gem, an item of handicraft, herbal oil or clothing. They deserve to get true value for their money.
The formal price they have paid for their stay, modes of transport, visits to places and for decent entertainment must adequately include margins of value to bring in a reasonable yield for the operators, their service providers and the communities that participate in the activity.
The key operational element here should be transparency. The tour elements, operated by a company or an individual, must be totally transparent with indicative charges clearly laid out.
I am of the firm view that the long-term impact of such a transparent operation will many times offset, over the short term ill-gotten gains made through hidden commission structures.
There are several other destinations that provide guidelines on pricing and on service charges to serve as the basis for such transparency. Added personalised services and service charges are the norm, and as long as the visitor is aware of what they are, and/or is making payments of gratuity only for exceptional service, that should be the way we ought to go.
Good times need not see a continuation of bad-time practices. Good times can be used as an opportunity for us all to get real and show the rest of the world that Sri Lanka’s tourism is not only about showing off the island’s natural beauty, cultural heritage and the other many wonders we possess.
We must show that we are truly a nation of smiling people. Smiling for we truly care to share what we possess with our visitors, with a deep-seated sense of integrity and sincerity.
That then will enable us to deliver on the promise of being the true wonder destination of Asia.
(Renton de Alwis is a former Chairman of Sri Lanka Tourism serving two terms during 2000-2002 and again from 2007-2008. He served as Head of the Asia Division of the Pacific Asia Travel Association based in Singapore from 1990-96 and as CEO of the National Association of Travel Agents Singapore from 1997-99. He also served as a Chief Technical Advisor and consultant with the ADB, UNDP, UNWTO, ESCAP, UNICEF and the ILO. Now in retirement, Renton lives away from Colombo in the Deep South of Sri Lanka and is involved in writing and social activism. He can be contacted at email@example.com.)