Sri Lanka must focus on innovation and digital transformation in tourism for future growth

‘World Tourism Day 2018’

The importance of digital technologies in tourism, providing opportunities for innovation and preparing the sector for the future of work, is at the centre stage of World Tourism Day 2018, to be celebrated in Budapest, Hungary today (27 September). World Tourism Day is celebrated every 27 September around the world, and is a unique opportunity to raise awareness on tourism’s actual and potential contribution to sustainable development.

This year’s World Tourism Day (WTD) will help to put the opportunities provided to tourism, by technological advances including big data, artificial intelligence and digital platforms, on the map of sustainable development. The World Tourism Organization (UNWTO) sees digital advances and innovation as part of the solution to the challenge of marrying continued growth with a more sustainable and responsible tourism sector. The WTD official celebration will be held in Budapest, Hungary, a country enjoying steady growth of tourism backed by consistent policy support and a commitment to the digital future. Other celebrations will take place worldwide. 

The official celebration will also see the announcement of the semi-finalists of the 1st UNWTO Tourism Startup Competition, launched by UNWTO and Globalia to give visibility to startups with innovative ideas capable of revolutionising the way we travel and enjoy tourism.

UNWTO Secretary-General Zurab Pololikashvili in his message on the ‘World Tourism Day 2018’ had said, “Harnessing innovation and digital advances provides tourism with opportunities to improve inclusiveness, local community empowerment and efficient resource management, amongst other objectives within the wider sustainable development agenda.” 

Global tourism industry and Sri Lanka’s potential

 As one of the world’s largest economic sectors, Travel and Tourism creates jobs, drives exports, and generates prosperity across the world. 

Latest research from World Travel & Tourism Council – WTTC outlines that the travel and tourism industry is one of the world’s largest industries with a global economic contribution (direct, indirect and induced) of over $ 7.6 trillion in 2016. The direct economic impact of the industry, including accommodation, transportation, entertainment and attractions, was approximately $ 2.3 trillion in the same year. A number of countries, such as France and the United States, are consistently popular tourism destinations, but other, less well-known countries are quickly emerging in order to reap the economic benefits of the industry. 

In 2016 Travel & Tourism directly supported 108,741,000 jobs (3.6% of total employment). This is expected to rise by 2.1% in 2017 and rise by 2.2% annually to 138,086,000 jobs (4.0% of total employment) in 2027. In 2016, the total contribution of Travel & Tourism to employment, including jobs indirectly supported by the industry, was 9.6% of total employment (292,220,000 jobs). This is expected to rise by 1.9% in 2017 to 297,896,000 jobs and rise by 2.5% pa to 381,700,000 jobs in 2027 (11.1% of total). Travel & Tourism investment in 2016 was $ 806.5 billion, or 4.4% of total investment. It should rise by 4.1% in 2017, and rise by 4.5% annually over the next ten years to $ 1,307.1 billion in 2027 (5.0% of total).

The global tourism industry is further envisioned to witness a year-on-year (Y-O-Y) growth rate of 3.9% and reach $ 11,382 billion (10.6% of GDP) by 2025. The revenue generated from visitor exports is also projected to upsurge from US $ 1,384 Billion in 2014 to $ 2,141 billion in 2025, exhibiting a Cumulative Annual Growth Rate (CAGR) of 4.0%. Total investment on global travel and tourism sector is anticipated to swell from $ 814 billion in 2014 at a year-on-year (Y-O-Y) growth rate of 4.7% to reach $ 1,336 billion in 2025.

Accordingly, in Sri Lanka the direct contribution of Travel & Tourism to GDP was Rs. 631.8 billion ($ 4.4 billion), 5.1% of total GDP in 2016 and is forecast to rise by 5.1% in 2017, and to rise by 6.6% annually, from 2017-2027, to Rs. 1,255 billion ($ 8.7 billion), 6.3% of total GDP in 2027. The total contribution of Travel & Tourism to GDP was Rs. 1,405.4 billion ($ 9.7 billion), 11.4% of GDP in 2016, and is forecast to rise by 5.5% in 2017, and to rise by 6.1% annually to Rs. 2,686.9 billion ($ 18.6 billion), 13.5% of GDP in 2027.

In 2016 Travel & Tourism directly supported 406,000 jobs (4.8% of total employment). This is expected to rise by 3.6% in 2017 and rise by 3.7% annually to 607,000 jobs (7.1% of total employment) in 2027. In 2016, the total contribution of Travel & Tourism to employment, including jobs indirectly supported by the industry was 10.7% of total employment (894,500 jobs). This is expected to rise by 2.8% in 2017 to 919,500 jobs and rise by 2.7% pa to 1,201,000 jobs in 2027 (14.0% of total). Travel & Tourism investment in 2016 was Rs. 129.4 billion, 4.0% of total investment ($ 0.9 billion). It should rise by 7.3% in 2017, and rise by 2.6% pa over the next ten years to Rs. 179.2 billion ($ 1.2 billion) in 2027, 3.4% of total.

Government authorities had recently said that existing economic development and peace in the country will largely benefit Sri Lanka to target over 4.5 million foreign tourist arrivals by 2020. Sri Lanka is currently reaping fruitful results from tourism due to the arrival of large number of tourists, and Sri Lanka tourism has planned to develop the sector by helping local and foreign investors to construct more and more hotels in every part of the country. Nearly over 2.5 million foreign tourists arrived in the county last year and during the past few months of this year over 2.3 million tourists have arrived so far according statistics.

Tourism is a major industry that contributes to the economic and social development of Sri Lanka by way of foreign exchange earnings, employment generation, income creation and generation of government revenue. Tourist traffic to the country soared from 1968 onwards until the eruption of ethnic conflict in 1983. Arrival plunged sharply due to the ethnic conflict from that year but arrival increased sharply with the improvement of the security situation in the early 1990s. Since 2009 with the end of war against terrorism, Sri Lanka is now emerging to reap the benefits of a thriving tourism industry.

From breath-taking coastlines, rivers, waterfalls, manmade tanks and a lakes and other wetlands, Sri Lanka is could be positioned as a most popular tourism destinations for even water sports. In the modern context Sri Lanka’s present development drive that includes mega structures such as ports, airports, fly-overs, highways, mega star class hotels, leisure centres and cultural centres, performing arts theatres and medium and up market city centres including shopping malls had also boosted country’s tourism with local travellers as well as foreign travellers increasing their sightseeing around the mega structure sites or nearby cities. 

On the other hands Sandy Golden Beaches such as Negombo, Mount Lavinia, Kalutara, Beruwela, Bentota, Pasikudah and Kalkudah, Unawatuna, Mirissa, Weligama, Polhena, Dickwella, Hikkaduwa, Koggala, Tangalle, Trincomalee, Nilaveli, Batticaloa, Arugam Bay, Casuarina Beach, Kilaaly Beach, Vankalai, and even Kalpitiya are major tourism attraction zones. Those areas have contributed vastly to the economic development of the country and to the boom of country’s tourism industry. 

And in fact the present government had considered the ‘Tourism’ as a major sector to drive Sri Lanka’s economic growth whilst the several new leisure projects are in the pipeline across Sri Lanka’s coastline. Many of them are five-star properties and country’s tourism authorities are also mulling to promote Sri Lanka as a preferred holiday destination for emerging middle class in two of the world’s largest economies – India and China.

 Way forward

 As the most widely celebrated global day for tourism, it symbolises a unique opportunity to raise awareness of tourism’s future direction, and how tourism could be made an effective product using modern tools such as digital marketing for destination marketing. On the other hand it is vital that tourism industry improves with innovation and digital transformation in the years to come.  Country is yet to reap its benefits from the tourism industries growth potential and be a part of Asian growth story that is happening for the next 100 years of world’s timeline. Sri Lanka’s tourist arrivals rose 4.9% in August 2018 compared to the same period last year, according to the data released by the Sri Lanka Tourism Development Authority (SLTDA). The month recorded 200,359 tourists arriving in the country compared to the 190,928 arrived in August 2017. As at 31st August, 1,582,835 tourists had visited Sri Lanka for this year. 

It is a 12.5% growth over last year when 1,406,854 tourists had visited the country during the same period of the last year. Asia and Pacific continued to be the largest source of tourist traffic to Sri Lanka with 47% of the total traffic received in August 2018. Europe accounted for 41% of the total traffic, Middle East 6%, America 5% and Africa 0.5%. India, China, United Kingdom, France and Germany remains Sri Lanka’s top five international tourist generating markets whilst over 2.1 million tourists arrived in Sri Lanka in 2017 contributing $ 3.9 billion of earnings to the government revenues.

Sri Lanka is on course to develop into a major tourist destination. Analysts also note that in the long term, with the entrance of more international brands and maturing of the tourism industry, Sri Lanka is set to change from a budget destination to a more exotic one offering a variety of experiences to a diverse segment of travellers. Meanwhile government of Sri Lanka has recently informed that it is looking at revenue from tourism in the excess of $ 5.9 billion for 2018 end and $ 6.5 billion for 2019 end and a target of $ 7 billion for 2020. The Tourism sector has been given priority by the Government to push growth and also to earn foreign exchange. It is significant to note that Sri Lanka tourism has recently announced that it is carrying out multi-platform promotional campaigns whilst a digital campaign had also been announced focusing on key international markets including Europe, Middle East, China, India, APAC and the USA. From May 2017 to April 2018, over 30 social media travel influencers have visited Sri Lanka, resulting in an overall social media reach of 65 million and a total engagement of 12.5 million on social media platforms including Instagram, YouTube and face book. 

Several TV documentaries about Sri Lanka have been also aired on leading TV channels including Channel 9 (Australia), WDR (Germany), 3SAT (France), CCTV (China) and ARTE (France/Germany) in 2017,describing about the country’s beautiful tea estates, beaches, culture and exotic wildlife. 

In addition to earned publicity advertising and branding, paid print media publications which featured the Sri Lanka include Food and Travel Magazine, Escapism magazine UK, Abenteuer und Reisen&Reise Germany, Voyagers & Grand Reportages of France, and the Gulf newspaper, UAE. Report highlight that in 2017 via the visiting travel writers’ and TV programme. a viewership of 75 million (both TV and magazine) have featured Sri Lanka in the recent past, reaching target audiences in key markets such as UK, France, Germany, China, and India which are important markets for Sri Lanka in terms of tourist arrivals and investments.

Therefore it is noteworthy that Sri Lanka’s government has taken preliminary efforts to brand Sri Lanka on the digital landscape in parallel to this year’s ‘World Tourism Day 2018’ theme. We are looking forward these efforts will uplift the industry and make Sri Lanka’s Tourism as competitive product in the modern times.

(The Writer is the President Chamber of Tourism and Industry)