Time for new strategies?

Thursday, 9 May 2013 00:00 - - {{hitsCtrl.values.hits}}

The first quarter results of tourism for the year released on Tuesday show the lowest quarterly growth since 2011, which is recorded at 10.9%, bringing in a total of 288,798 tourists to the country and raising fears that the industry may not be able to meet the 1.25 million target set for 2013.

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.

The Central Bank has kept an optimistic US$ 2 billion target in Foreign Direct Investment for 2012, with half expected to come from tourism. Yet, there are tough questions being asked on the transparency front. The infamous Galle Face CATIC land scandal is still fresh in the minds of the public and to add to that there are now issues over the payment of US$ 450 million from Krrish Group, with Opposition parties calling for the Government to cancel the agreement if payment schedules are not met.

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.