Mounting need for destination marketing

Could slowing growth in Sri Lanka’s tourism sector mean that the writing is finally on the wall regarding destination marketing? As per the latest data released by Sri Lanka Tourism, arrivals in April grew by 14.7% to 79,829 and cumulative figure in the first four months was 368,627, up by 11.7%.

In comparison to April last year’s growth of 9% over the corresponding period of 2011, the growth in 2013 is higher but the cumulative total’s growth is lower than 2012’s 18.3% improvement. However the 2013 figures are from a higher base relative to 2011.

For example, tourist arrivals from Western Europe had grown by 10% to 27.531 in April this year as opposed to 7.8% growth achieved in April last year over 2011. Arrivals from Eastern Europe had grown by 34.5% to 4,818 whereas a year earlier the improvement was only 14%. However growth in cumulative arrivals from these two markets is lower at 12.1% and 17.7% in 2013 in comparison to 19.4% and 43% last year.

The industry is seen losing its momentum, showing low percentage growth for the quarter as well as the lowest growth rate for a month recorded since 2011 for the month of March. The reduction could pose significant challenges to an economy dependent on its continued expansion.

Sri Lanka’s tourist businesses are charged a ‘cess’ by the State tourism agency and the industry has been calling for a well-funded destination program since the end of the war. Industry heavyweights even made the suggestion to Treasury Secretary Dr. P.B. Jayasundera ahead of the 2013 Budget, but received no positive response. This ‘wait-and-see’ policy has raised fears that Sri Lanka could lose ground to more competitive emerging destinations such as Cambodia, Laos and Myanmar.

Authorities have generally said that with a strong influx of tourists, a large marketing program was not needed at that time, especially since Sri Lanka did not yet have enough rooms. Instead, tourism promotion has relied on internet campaigns and promotions targeted at specific markets, which cost less money. Tourism authorities have been focusing on expanding infrastructure as the target of 2.5 million tourists by 2016 required more resources and many felt that the natural publicity generated by the end of the war would be sufficient to keep numbers afloat.

Mentions by Lonely Planet and the New York Times aside, the island has struggled to remain in the media for positive reasons. The lack of a destination marketing campaign could also mean that Sri Lanka will continue to lag behind in the race for high-end clients. This would mean that the returns on tourism, on which the Government has high hopes, would take longer to materialise – or may not materialise at all.

The growth and sustainability of such numbers is largely dependent on the vibrancy and continuity of arrivals. Earnings of local players also leaves limited funding for large-scale marketing programs, resulting in sporadic or limited exposure. A comprehensive destination marketing project would assist all players in the industry – from the small to the large.

Great expectations can only bear fruit with great commitment. This means that both the private and public sector need to work together so that the industry achieves its full potential. Per capita income of tourists, better market research, introduction of new products, promoting environmental sustainability, and having more transparent investment deals are all part of the challenge for tourism.