Tourism – The true picture

By Shelton Dharmaratne

Sri Lanka Tourism’s scholarly Chairman’s recent remarks made at the CIM Talking Point series ‘Sri Lanka Tourism in the New Economy’ impelled the expression of concern on the subject tourism and economy.

Since Thomas Mun wrote (1620) ‘England’s Treasure by Foreign Trade,’ tourism has grown from a minor fiscal nuisance to an industry of major social and economic significance in the world economy.

Many countries, especially the developing ones, could not begin to balance their international accounts without those “petty things called expenses of travellers” referred to by Mun, then.

In view of the volume of expenditure and the rate of growth, importance of tourism is gradually being recognised in many countries, particularly developing ones.

In spite of the growing awareness of the importance of tourism, many questions concerning it are not so much unanswered as unasked and implicit assumptions which may have been valid 30 years ago are neither challenged nor substantiated.

It is therefore that there is a need for a more coherent, logical and up-to-date approach to tourism, both at personal and national level. Its role in the country needs to be more clearly identified so that the benefits of tourism can be encouraged and the pitfalls anticipated and circumvented. The consequences of continued growth must be analysed, and if found to be unfavourable, then attitudes must change.

Does tourist expenditure really filter through to benefit the local economy; or has the emergence of international airlines, international hotel companies, international travel agents and international banks meant that the benefits of tourist expenditure are now being siphoned away and reverting to the tourist’s country of origin rather than his destination?

Is it the case that the taxpayer of the tourist destination is in fact subsidising the tourist without receiving adequate benefit?

Is it in the best interests of a developing country like Sri Lanka to graduate from an agricultural economy to a service economy based on tourism without the immediate stage of a manufacturing economy?

Might the effort of diverting the country’s labour force into the tourist industry, where productivity gains are difficult to achieve, impede growth rather than accelerate it?

Though too little is still known about the effect on an economy, it is possible to put together some general propositions. If a tourist spent his money in a same way as a resident, his/her presence could not per say, accelerate or retard growth.

But tourist expenditure by its very nature is directed towards labour intensive service industries, rather than capital intensive manufacturing industries. Tourists can therefore shift the total direction of consumers’ expenditure, and it is in this direction of consumers’ expenditure in which this shift is made which can retard growth.

The danger appears to be at the next stage economic development. Where unemployment and underemployment have been reduced, the labour force is better educated and an infrastructure exists which might support other industries. Continuing dependence and emphasis on tourism may no longer be economically justifiable.

The time has now come for Sri Lanka Tourism to take the ‘Goddess of Tourism’ off her pedestal and place her to the garden with all other statutes. For too long governments have assumed unquestionably the benefits from tourism and have encouraged it to expand. The undesirable consequences have been swept under the carpet. It is to be hoped that Sri Lanka Tourism under its erudite Chairman will see a more rational and coherent approach to Sri Lanka’s tourism development.

In dealing with the future of tourism, one very important point must be made clear at the outset. It is assumed all too often that if correct demand forecasts are made and if the right number of hotel beds, etc., are made available, then this is the right and indeed the single solution.

The key question for the future is no longer volume but quality; a system which gives more weight to the visited than the visitor, which minimises the conflicts between other national objectives in a sustainable manner, facilitating the integration of sustainability and quality criteria into Sri Lanka tourism and reducing negative impacts upon the natural and socio-cultural environments.

If the visionary guidelines expressed by the Sri Lanka Tourism Chairman are combined with sensitive responsibility, Sri Lanka tourism can look forward to a hopeful future.

(The writer is a Post Graduate from Bournemouth University, UK, and CEO of Sustainable Solutions Private Limited. He can be reached via email [email protected].)