SLAITO on expectations and challenges facing tourism industry

Following are excerpts of an interview with Sri Lanka Association of Inbound Tour Operators (SLAITO) Secretary T.M.F. Packeer, who is also Managing Director and CEO of Asian Exotica Ltd.

Q: Sri Lanka Tourism has a very clear future standing as articulated by the President, of 2.5 million visitors by 2016. Is this expectation realistic?

A: First, there must be some clarification with regard to the target itself. If it is to achieve an aggregate of 2.5 million by 2016, that is certainly viable. In fact with the current number of visitors, we are capable of achieving it. However, if it is to achieve and maintain 2.5 million in one calendar year, that would be extremely difficult due to numerous factors.

To increase our capacity within four years from 153 hotels and 8,373 rooms to meet the increased demand will be a difficult task, as the industry is not making sufficient effort to encourage foreign investment to come into the country and such investors are essential for the development of necessary facilities.  If we are to service 2.5 million visitors, the entire infrastructure has to be improved – human resources, transportation, accommodation, the road network, facilities at sites and so on, to cater satisfactorily to such an influx of demand. As such, attracting the support of investors is vital.

Also, how we position Sri Lanka is essential too. Sri Lanka is known as an exotic destination and so we should not market it as a mass destination; that could destroy our culture, heritage and our existing ‘kind’ hospitality to foreigners.

While infrastructure is needed, we should take great care not to sacrifice our natural resources and the beauty of the country in trying to create them. We have our own ‘identity’ as a ‘paradise isle’ that offers much more than just beaches.

Therefore, we need to position ourselves right in order to attract the right kind of visitors and not just focus on achieving numbers. Whilst the quantity of visitors is important, quality of visitors (as in high spending tourists who seek more than a beach holiday) is also vital. And to do so, we need to retain the appeal of Sri Lanka as a ‘premium’ destination.

Q: Do you believe that tourism can become the engine of economic growth and development in Sri Lanka?

A: I totally agree that tourism is definitely an industry that will give impetus to the economic growth. However, it is a very sensitive industry and any unrest not only in Sri Lanka but in the region could affect the movement of visitors. Having said that, this industry could also bounce back very quickly after any eventuality and has proven to have done so.

It is also my opinion that proper controls and management should be in place to maintain standards for all the stakeholders and due respect must be given to visitors who arrive here with high expectations of a ‘dream holiday’. It must be our objective to fulfil those dreams, which for many is an once-in-a-lifetime experience. Therefore, we must not simply see them as ‘tourists’ but as guests to our country who will take back a wonderful and memorable experience with them.

In the past we have had many repeat visitors due to our hospitality and service. This is gradually fading away due to a lapse in standards and attitude. Therefore it is paramount that we address this issue to offer a quality experience in order to sustain the growth of visitors which will ultimately benefit our motherland. Indeed these benefits will be across the board, affecting all sectors of the community.

A vital ‘cascading effect’ that will benefit everyone from all walks of life – from the village craftsman to the fisher-folk to the owners of establishments, those in the tourist industry and in all other sectors too. Therefore, yes, tourism can indeed be the engine of economic growth in our country.

Unlike some other industries, in the tourism industry the ‘outflow’ is not as much as the ‘inflow’ – therefore the money that comes into the country stays back. Subsequently, due recognition should be given to our industry as a ‘growth’ factor to the economy in this sense too.

Q: What is SLAITO’s role in achieving the number of targeted visitors to Sri Lanka?

A: SLAITO’s role is largely an intermediary one. We are an association known for our strength in bringing together stakeholders from all sectors: From the industry ‘big fish’ to the persevering ‘small fry’. Over 95% of the SLAITO membership comprises 93 companies from the SME sector.

Our membership primarily consists of Destination Management Companies (DMCs) which assemble products to suit the marketplace and meet the requirements of the clients in line with the portfolio of the foreign tour operators they represent. The foreign principals, marketing and client network can be harnessed to achieve the expected growth provided our membership are encouraged and supported to synergise with the principals on an incentive.

Q: Has the group’s role as one of the main sources of tourist inflows been recognised by the industry at large?

A: No. For many years we have been lobbying with the authorities to consider our role to be placed under intangible exports, whereby benefits for this sector’s gains would also be given to us. This has not been looked into. Furthermore, 90% of the leisure market customers to this country are channelled through our overseas partners, but our efforts in doing so are not recognised by some of the stakeholders. This is a stressful situation since we play a vital role in bringing visitors to this country through our network as mentioned above and our investment in promoting the destination.

Through the association we have a very close relationship with our membership and the authorities thereby monitoring critical issues to position value for money destinations. Our membership also continues to invest heavily in promoting Sri Lanka as a sought-after destination through their network worldwide.

If the foreign partners of the membership are given incentives by means of marketing support or incentives to sales staff, thereby emulating our competitors, achieving the expected targets will not be an issue.

It is also important that the local authorities are also aware of the importance of tourism as a vital industry that contributes to the growth of the economy. We are presently on this mission and it is hoped the officials will view our issues in a more practical manner since we are dealing with a tangible commodity in comparison to other sectors earning foreign currency.

Q: What are the main challenges which need to be overcome in order to achieve goals set for the industry?

A: To me, the main challenge is to sustain Sri Lanka as a sought-after destination and to retain its beauty and the hospitality of our people for generations to come. We should not focus on numbers, but on yield. Having said that, the product that we offer should also be value-for-money. So a challenge will be to change the perception of the traveller from the present position, that of value-for-money destination, to a destination that delivers on its promise.

We need all stakeholders to think in these terms, which could then make it a destination that people would be yearning to come to spend their holidays. Most of the time, our stakeholders forget that visitors come to Sri Lanka for a holiday and not just a visit. Therefore, there has to be some change in attitude of those in the industry to provide the guests with a satisfying and memorable experience they will want to repeat.

Safety of visitors is another factor that must be looked into urgently. Strong steps must be taken to resolve the issues of harassment of visitors at tourist attractions, the beaches and the cities to worse atrocities like kidnappings and even murder. It is a challenge to monitor and put in place preventative measures, but it is one that must be taken seriously.

Educating the public is vital to change the mindset of the people and their attitudes and make them realise that these guests should be treated with respect and are not targets to take advantage of. If allowed to, this can become a threat worse than terrorism, where Sri Lanka could gain a bad reputation as a ‘not safe’ destination. Measures must be taken to address this issue as a matter of urgency.

Q: One of the main challenges is the number of rooms available in Sri Lanka at present. It is not easy to build new rooms as this requires capital investment that must mainly be sourced as FDI. Has the industry and the Government addressed this challenge?

A: As a nation we are easy going and are not consistent in addressing a situation or meeting a challenge. With the opening of the euro zone and regional countries offering enormous incentives, we should have a proper mechanism in place to encourage investors to come to Sri Lanka. It is true that peace is prevailing in the country, but that is all. However, do we have the other mechanisms in place?

In comparison with the other factors related to capital investment, to build a hotel with a minimum of 100 rooms, you need a good location and other resources that go with it. Therefore, it is necessary that all authorities come together on one common platform and place it before the investor to choose Sri Lanka as a place for investment and show them the potential that Sri Lanka has as a holiday destination due to its geographic location and the beauty of the country.

Q: There are on average 10 different authorities and ministries that must grant approval on a proposed venture before construction work can begin and this process takes 12 months at minimum. No foreign investor is going to accept a 12-month lead time after the decision to invest has been made. How is this being addressed?

A: This issue has been discussed at numerous forums and I am aware that authorities have addressed it. At a particular forum the Minister in charge of Tourism also mentioned the difficulty of the bureaucratic forces living with a regulation that has been drafted five decades ago. This has to change and I am sure with the necessary strength in the legislature, they could fast track these legalities.

Q: Another issue is transport and accessibility; time taken to reach resorts from the airport. How does SLAITO see the time a visitor spends travelling between destinations?

A: Transportation is a major issue in this country and at present we are not even looking at networks beyond roads. We have a rail network which can service tourist locations and if this is properly structured and developed with improved facilities and services, accessibility to resorts will be easier and it will be a pleasure to travel.

Air travel is another option. We could develop the existing airstrips at various locations and turn them into small domestic airports. We should also encourage domestic airlines to fly as scheduled carriers rather than as at present where carriers which do so operate on charter or request basis. We have some operators in this area, but we need a consistent, regularised and dependable domestic flight operation. This should not be a major issue since a majority of the main cities have landing strips that can be utilised for small aircraft.

Q: Inbound tour operators are the segment of the industry directly involved with arranging transport and face issues of accessibility. What does SLAITO as a group see as possible solutions to this challenge?

A: Some senior colleagues in our association including myself have had numerous discussions with the authorities and addressed this issue with regard to coaches, micro vans and cars. If we are to position this country as one that offers convenience to the visitor, transport is one of the major components we need to address.

The companies which are financially strong can import luxury vehicles, but the medium and small enterprises cannot afford to do so and many have to rely on vehicles which are often more than 10 years old and if they are to invest in newer models, they will be forced to out-price themselves to get back their cost of investment. This creates an imbalance in the industry in this regard, to some extent.  As with other industries and occupations, Government concessions should also be given to our industry to obtain vehicles at duty free prices, while steps must be taken to prevent the misuse of such concessions. Such allowances would make a great deal of difference to tour operators and SLAITO hopes that this issue will be addressed urgently.