Competitiveness is key to securing tourism success

Following are excerpts of an interview with SLAITO Executive Committee Member and Walkers Tours Limited Chief Executive Officer Michael Elias:

Q: Is Sri Lanka becoming too expensive? Why must Sri Lanka be competitive in order to attract tourists? Surely we offer the visitor a unique mix that is not repeated anywhere else in the world!

Q: Is Sri Lanka becoming too expensive? Why must Sri Lanka be competitive in order to attract tourists? Surely we offer the visitor a unique mix that is not repeated anywhere else in the world!

A: Of course we must be competitive and it is imperative that all stakeholders are conscious of this fact. While we certainly have a fascinating diversity and a great mix of attractions, do the majority of tourists actually travel to experience this – however unique the mix?

Isn’t there greater focus on a few specific needs when the travel destination is picked? It seems fashionable these days to be derisive on triple ‘S’ – Sun, Sea and Sand tourism but the hard fact is that a large component of the world’s tourism is focused on beach – from California to Florida, from the Gold Coast to Bondi Beach, from the Mediterranean beaches of Europe or Africa, from the Caribbean or Pacific islands to Hawaii and the Maldives. Even less attractive beaches like the Pebble beach at Brighton or the cold North Sea coasts of Germany and Belgium.

Few people know that the majority of the tourists to Kenya have not stepped into a wildlife park – instead they stay 14 days at a beach hotel in Mombasa. Similarly most of Egypt’s tourists have not seen a Pyramid or the Nile because their entire vacation is spent at the beach resorts of Sharm Al Sheik or Hurgada.

Even destinations like Costa Rica that are supposed to be uniquely ‘eco touristic’ have a large component of triple ‘S’ business. It may not be palatable to some, but it is reality. The issue with triple ‘S’ tourism is that besides differences in temperature and sand colour or texture it is basically the same anywhere in the world and can be replicated in Dubai, Phuket or South America.

While we can and do sell our more unique segments at premium rates, is the world’s demand in these niches sufficient for an entire destination? We are an island nation blessed by miles of beaches with a resort hotel product ranging from 1 to 5 star and must be very competitive to succeed. In addition it must be clearly understood that even the special segments are offered by other destinations so competitiveness is the key.

Q: Do you believe that Sri Lankan Tourism should spend more on promoting our country overseas? Won’t that make Sri Lanka even more expensive to travel to since we will need to up our prices further to cover marketing costs?

A: Definitely. Consumer promotion is an absolute need to create a pull for the destination. Everywhere in the international market you are exposed to the effective marketing campaigns of our competitor destinations – Incredible India, Malaysia Truly Asia, Amazing Thailand, Surprising Singapore, Maldives the Sunny Side of Life are all perfect examples of success. Why would it make Sri Lanka more expensive?

The industry already contributes a significant sum to Government coffers through the TDL. This should be used in totality to promote the destination. Just look at Singapore’s budget in 2011. The figure disclosed under two components – operating and development of tourism is an astronomical SGD 459, 470, 000, which is approximately US$ 350 milion!

Q: Who in your opinion consider Sri Lanka too expensive? Is it the regional traveller, the European or is the feeling evenly felt across the globe?

A: For specific niches, the question does not arise as we price these special segments relatively high but give value. However, for general beach and cultural tourism we are relatively expensive for both European and regional travellers.

Q: SLAITO compiled a report on issues in the tourism industry, where it looked at factors like price hikes that hamper the potential for growth. What prompted the report?

A: The members of SLAITO are those directly involved in bringing tourists into the country and they understand the realities of the ground situation intimately. They are not armchair critics who spout impractical theory. The concerns are very real and the report was compiled to shed light on some of the issues.

Q: What are the destinations/tourist attractions that you studied for the report?

A: SLAITO analysed Thailand, Malaysia, India, Kenya, Egypt and Singapore among others.

Q: How is it do you think, possible for our direct competitors (those whom you have studied in your report) to keep prices comparatively low for the tourist? And have tourist numbers significantly increased to justify this?

A: We are not certain of this. However the fact is that if you check the internet today, you will see high quality beach hotels in Thailand and Egypt to name just two, selling at remarkable prices well under the price of similar products in Sri Lanka. There is no debate on the large numbers of tourists they handle.

Q: You mention ‘arbitrary price increases at tourism sites’ in your report. How arbitrary are the price changes? Can you give us some examples of those tourist attractions? And what are their major competing destinations?

A: Let’s take a simple example. While Sigiriya is a fabulous site, comparable to the best in the world, who other than us Sri Lankans elevate it to the same level with the Taj Mahal in India or the Pyramids of Giza? These international icons attract millions of visitors annually but the Taj charges an entrance fee of only US$ 17 which includes a large bottle of mineral water and a pair of socks while the Pyramids charge US$ 10. The entrance fee to Sigiriya is US$ 30. Similarly, the famous Tiger Parks of India like Ranthambore or Kanha charge between US$ 6 to US$ 7 per person while we charge over US$ 20 for our parks. Compounding these high rates is the fact that the facilities at our sites are abysmal.

Q: Have you experienced first-hand, any tour cancellations purely due to price hikes by Sri Lanka?

A: Yes.

Q: Do you believe that this is further compounded by the ongoing recession across Europe?

A: Certainly. The problem for us is compounded as competing destinations with low rates obviously are more attractive.

Q: You have also stated in the report that we should in fact cater to the back-packing segment of tourists who may in fact be the doctors and high paid professionals of tomorrow. Could you elaborate on your thoughts here please?

A: Yes, many young people in the developed world take a break between High School and University to experience the reality of life in different lands, at their own pace. If a destination is attractive to this segment, there is high possibility that they return regularly. I personally know several German guests who are now empty nesters in their late ’50s and ’60s who return annually to Sri Lanka and stay 20 to 30 days. They first came here as backpackers in the ’70s. A friend from the United Kingdom who fell in love with Thailand while backpacking as a 20-year-old student now owns three hotels there.