Tourism struggles

Prime Minister Ranil Wickremesinghe over the weekend announced plans by the Government to introduce a new tourism promotion law that would broad base authority and possibly restructure Sri Lanka Tourism to essentially make Sri Lanka a year-round destination.  

This follows on the heels of the Government-appointed taskforce in June that included top private sector tourism industry leaders to spearhead policymaking to push the sector to a more sustainable footing. The new measures and officials have much to tackle.   

One of the key problems repeatedly highlighted by the industry is the lack of accurate data. For years, the Government has been releasing numbers that do not differentiate between the formal and informal sectors adequately enough to understand how many foreigners are tourists, where they stay, how much they spend and their level of expectations. Without in-depth data, policymakers cannot understand the direction the industry should take, which affects the entire value chain.

Sans in-depth data, Sri Lanka has been floundering around for years without a solid branding and marketing strategy. Sri Lanka lacks a cohesive marketing strategy and campaign which should be a mutually-agreed private-public partnership. There are various promotional exhibitions that have taken place in foreign capitals in the past but they are not based on a master plan to promote the market destination. There is much more work that needs to be done in this area.

Even target group marketing is lacking and the country’s slogan has veered from ‘Land Like No Other’ to  ‘Small Miracle’ to ‘Wonder of Asia’ without clearly communicating the island’s competitive advantage. Singapore, for example, changed to ‘Your Singapore’ to underpin its strengths as a destination. The re-branding was accompanied by a change in the offerings to tourists with the introduction of Formula One racing, casinos and other night entertainments. The rebranding focused on the experience of a tourist that could be personalised – sound, tastes, sights and user-centricity. Branding a destination has to be a carefully thought out exercise based on the competitive strength and strategic position vis-à-vis that of the competitors. It is on this basis that countries have branded their tourism. For example, Greece – ‘A Masterpiece You Can Afford’; Canada – ‘Keep Exploring’; Malaysia – ‘Truly Asia’; Bulgaria – ‘A Discovery to Share’; India – ‘Incredible India’; Vietnam – ‘A Different Orient’; Maldives – ‘Always Natural’ and so on. Then there is the eternal argument over where Sri Lanka should price itself and where it should source tourists from. Many tourism analysts have pointed out that Colombo’s minimum room rate is prohibitive and should be loosened so market forces can decide the best rates. However, the companies have steadfastly refused and with new properties and apartments coming into the market over the next few years, the possibility of a price bubble evolving in Colombo is high. Tourists could take the option of avoiding Colombo altogether, thereby impacting the revenue of other businesses. 

High-spending tourists are the desire of the industry. However, Sri Lanka is internationally known as a budget destination and would require a massive increase in the quality of products on offer to compete with destinations like Thailand. Tourism also faces a huge challenge in terms of human resources and will not be able to attract high-spending tourists consistently if it does not raise service levels exponentially in a short period of time. 

Human resource constraints, taxes, import substitution and investment laws were all highlighted as points where more engagement and work was needed to propel Sri Lanka’s tourism industry to where it deserves to be in the next few years.