Treasures of Sri Lanka, the ethical way

Tuesday, 28 February 2012 00:24 -     - {{hitsCtrl.values.hits}}

In the latest UNWTO report, it is stated that tourism has become one of the world’s largest foreign exchange earners with the industry catapulting to US$ 900 billion and visitor numbers crossing 980 million visitors globally.The growth has been ignited with the launch of e-commerce where a holiday can be booked and paid for from one’s own cosy home. A top search engine like Google has revealed that tourism has now become the most traded item on the internet.With this new revelation, the implication to Sri Lanka is that in the key markets of UK, France and Germany, we need to have a strong internet-based communication strategy. It is estimated that almost 70 per cent of the people tend to book their holidays online.

Given that Sri Lanka has been recording a outstanding performance in the last two years with the industry touching US$ 800 million and almost 850,000 tourists flocking to the island, the key challenge now for Sri Lanka is to identify what the most compelling reason we can offer for a five star global traveller to go to the Sri Lankan website and select the country for their next vacation.

Sri Lanka market share

Even with the booming tourism industry of Sri Lanka, the fact of the matter is that Sri Lanka’s market share stands at around 0.07 per cent, which means that if we can up the number by a meagre 0.01 per cent share increase, it can result in additional foreign exchange earnings of Rs. 6 billion to the country.

In this perspective we see the enormous opportunity that this industry holds ground for Sri Lanka. However, the important point to note is that we must not chase behind statistics but drive after the proposition that can attract a quality tourist that can spend US$ 200 per day as against the US$ 97 that is been spent today.

If one tracks back on the performance of this industry, we can see that country has been robbed of over Rs. 7,000 billion (US$ 7 billion) due to the three-decade war that plagued our country. If not for the war we would have been attracting around 1.5 million tourists, which explains the capacity development that would have happened in Sri Lanka – this includes new hotels, new cab services and development in industries like handicrafts, batik, etc.

In contrast if we take a country like Cambodia, the country registered only 200,000 tourist arrivals in 1983 but today it has crossed the 2.1 million traveller mark. This has been the opportunity cost for Sri Lanka. Some can argue that Sri Lanka does not have the carrying cover for such a large number of tourists but I feel that the market dynamics would have taken this number to that reality.

The silver lining

In the recent past we see once again how the negative aspects of post-war Sri Lanka are being highlighted and hitting the global media. The drastic policy decision to move the exchange rate to a market-oriented dynamic platform has aggravated the situation due to the spike in cost of electricity, bread and gasoline but this is the reality. But our duty is to find a way of creatively interpreting these findings whilst focusing our efforts on ramping up the export business.

Getting back to tourism, an interesting insight for Sri Lanka is that almost 83% of those visiting Sri Lanka say that they will come back to the country, which means that we have a satisfied customer due to the diversity of the product, be it wildlife, beaches, culture or heritage.

This means that if we can develop a direct communication strategy (as we have the addresses of the travellers who visited Sri Lanka), maybe we can attract 50 per cent of them for a repeat purchase given that devaluation has made Sri Lanka a less pricey destination by almost 10% so far.

However, the key challenge we need to focus on is the key selling proposition we want to associate Sri Lanka with in the years to come, so that we give a strong reason to drive repeat purchase from those who have visited Sri Lanka in the recent past.

Less developed but less polluted

Even though the Sri Lankan economy has experienced accelerated growth from a 20 billion dollar economy in the 1990s to be a 59 billion rupee economy as at end 2011, our geographic landscape has yet maintained its pristine and natural beauty that many of our neighbours like India or Pakistan could not preserve.

Some can argue that Sri Lanka’s economy should have been 100 billion dollars by now and that Sri Lanka’s development has been retarded due to the war. However, one can also make the insinuation that due to the development not being so rapid, pollution levels are reflective at a low ebb as per table that was recently published by the UN report on climate change where we register a MtC02 emission of a low 11.5.

Hence it is fair to say that against the backdrop of economic engines in the Asian region like China, India and Pakistan, Sri Lanka will emerge as a ‘less polluted country’. It is a positioning opportunity that is fast emerging for our beautiful little country in the backdrop of the apparel industry positioning itself as the first ethical sourcing destination and the tea industry being tagged as the first ozone friendly tea nation in the world, which are all on this theme of cleanliness and less pollution.

The challenge is if we get together and recognise this emerging new positioning that has happened due to an industry-led strategy rather than a nation branding initiative. But is it definitely a new positioning that can differentiate Sri Lanka from the rest of the destinations in the Asian region.

The UN human development report on climate change very clearly justifies the positioning opportunity which will emerging and it will become stronger in the years to come as countries like India, China, Malaysia and Singapore have a robust development agenda which is going to add to the pollution their respective countries. Currently Sri Lanka’s total emission (MtC02) is at a low 11.5 whilst per capita CO2 emission is at low ebb of 0.6 as against China at 5007.1 and India at 1342.1.

The ethical way

If we further analyse this ‘clean, less polluted proposition’ as a new strategy given the emphasis on climate, maybe we can attract the attention of a five-star tourist. Due to the fact of the strong product features like the beaches, wildlife, 2,500-year heritage and family-oriented culture, maybe a typical positioning can be ‘Treasures of Sri Lanka,’ which can be seen in the ethical way.

The Thailand floods that killed the tourism industry of the country for almost three months and the smog that covered Europe and left millions of people stranded in Europe further strengthens Sri Lanka’s claim to be ‘Treasures of Sri Lanka’ being seen in the ethical way.

Sri Lanka awareness – 4% globally

At a recent world tourism survey done on a brand tracking exercise done by a set of university students in Harvard, it has been found out that only 4% globally are aware of Sri Lanka whilst only 3% consider the country as a possible vacation hotspot. When I did a desk research via Google trends, this information was confirmed.

If we once again look at this data in positively, we can once again take advantage of this data. Since the current positioning is not strongly registered, we can now create awareness of the new positioning for Sri Lanka – ‘Treasures of Sri Lanka’ the ethical way that can add to the ‘Wonder of Asia’ theme.

If can push our market share to 2%, we can make this industry be a 100 billion industry for Sri Lanka. What is now required is to develop a short-term objective in our key markets of India, UK, France and Germany and increase the awareness of the new position to 10% and the consideration score to 7% .

The business opportunity

The UNWTO report states that over 175 million travellers have visited Asia in the last year and nine million of them have come to South Asia. This means that we have just over a six per cent market share of the South Asian market.

The reason for this choice of South Asia has been the ability of exploration and discovery that no other region can offer. The recent registration of over 11 new airlines coming into Sri Lanka further justifies this new positioning that we can harp on with brand Sri Lanka.

I feel Sri Lanka can exploit this opportunity big time creating awareness of the country as ‘Treasures of Sri Lanka’ the ethical way given the above data but on the theme ‘Wonder of Asia’. After all our treasure trove includes culture, beaches, sporting, wildlife, adventure, agriculture – i.e. tea, night life, off-beaten tracks, nature trails, ethically manufactured garments and good accommodation wrapped around with smiling warm people. This can trigger a hook on to the all-important emotional reason to visit Sri Lanka by the five-star tourist.

May be with the proposition of highlighting ‘Treasures of Sri Lanka – The Ethical Way,’ we can set Sri Lanka apart and take the high ground as at the end of the day we are fighting with giants like Singapore and Malaysian, which invests over US$ 20 million annually to attract top end travellers. Maybe with this strong proposition we can beat the fat budgets of the competitors by way of differentiation.

The reason why I am proposing that we target only the Western markets for the launch of this new positioning is because the average income of a traveller from UK, France and Germany (which are the top three markets for Sri Lanka) is around US$ 21,000. This gives us an indication of the purchasing power of a visitor to Sri Lanka and in turn the earning potential for the country.

(The author is actively involved in the growth agenda of the economy at policy and implementation level and is an alumnus of Harvard University, Boston. The thoughts are strictly his personal views.)