TOURISM: ON THE
SLOW TRACK?
Vasantha Leelananda says there’s potential for the tourism industry to grow,
even while recovery continues at snail’s pace. Rochelle Jansen reports.

ri Lanka’s tsunami-battered tourism industry is slowly but steadily moving along the road to recovery, and the investment and effort put in by the industry to revive the sector – it appears – is beginning to pay dividends. Vasantha Leelananda, Executive Vice-President and Sector Head – Leisure (Inbound), John Keells Holdings, declares that tourism is picking up once again. Positive trends are evident as far as bookings are concerned, he adds.

“The prospects for the forth-coming winter season look encouraging,” he enthuses, des-pite the (expected) shortfall in numbers against previous years. Leelananda, who heads the Sri Lanka Association of Inbound Tour Operators (SLAITO), anticipates that the island-nation will have welcomed 600,000 tourists by the end of this year, based on Sri Lanka Tourist Board (SLTB) projections. The leisure-traveller component of this number will be between 300,000-350,000, he notes.

“The figures released by the SLTB are based on World Tourism Organization standards, where any person arriving in the country – be it to visit friends or relations – is considered a tourist. But I’m looking at it from the point of view of the actual numbers handled by our members and hotel occupancies. There will be a drop of around 25 per cent this winter, and room rates will suffer – particularly in hotels out of Colombo,” Leelananda avers.

From a post-tsunami standpoint, Sri Lanka must look at the different segments in the inbound travel business to charter a way forward, he says. “For far too long, we have depended on volumes and mass markets – and now, it is time to differentiate,” he urges. Leelananda recommends positioning Sri Lanka as an upmarket destination, to attract high net-worth clientele – particularly from within the region. With over 60 per cent of current tourism income derived from mass-market travel, this figure will then reduce to around 40 per cent, Leelananda asserts. Sri Lanka was well on course to achieving this last year, he says, before nature took its drastic course.

However, he dismisses the setback as merely “a passing cloud”. India and China will have a major role to play in Sri Lanka’s tourism future, he says, and predicts that the two Asian nations “will dominate the industry over the next decade”.

Leelananda notes that the SLTB is making a conscious effort to assist in the recovery process; yet unfortunately, it has been plagued by issues of finance. The need of the hour is a strong consumer campaign in key overseas markets, he says – a task hampered by the colossal costs involved. Despite mechanisms to generate funding for such promotional activities, the resources available are insufficient. Recently, USAID and SriLankan Airlines joined hands to partner in this effort, but more resources are needed, he avers.

“September to October is the major booking period in European markets. All our brochures are on shelves during these months. We felt that there was a strong need to be visible in these marketplaces during this time, as we did not want to miss out on the opportunity. A joint delegation from our association as well as the hotels’ association recently met with the tourism minister and expressed our need to obtain a special allowance from the Treasury – over and above what the SLTB has to offer – to moot an even stronger consumer campaign,” he reveals.

Western Europe is still the catalyst – or volume driver – into Sri Lanka, and this market needs to be sustained. There is also some potential as far as Eastern Europe is concerned, as many of these countries have now obtained EU status and more people with high disposable income are travelling for leisure. However, accessibility remains a problem there.

“The Middle East, too, has great potential and is turning into a thriving inbound hub. It has created fantasies for incoming visitors – par-ticularly in Dubai. There is potential for outbound travellers from that region as well. North America does pose some potential, but arrivals have been very slow from there. They would not opt to travel to visit Sri Lanka as a single destination, but we can position ourselves as a part of their Asian circuit,” Leelananda surmises.

But why all the hype, one may ask, when tourism contributes only around three per cent of the country’s GDP? With a turnover of Rs. 413 million last year, Leelananda asserts that inbound tourism contributes significantly to the country’s economy, as “the spill­over effect to the community is huge”.

“The potential is massive, and we still haven’t given back the due benefits of tourism to the nation,” he admits.

Successive governments have not focused enough attention on tourism, he charges, and the sector has the capacity to outperform even the apparel industry, Leelananda claims. “I am not advocating handouts, but what we need is a simple, easy mechanism to facilitate our needs. We are a mature industry driven by professionals who should have a voice in policy-making. The government must harness these resources. The Tourism Act, which has taken far too long to become a reality, is now before parliament – and we believe this will pave way forward,” he affirms.

“If you analyse what the industry has gone through over the last 20 years, you will see a case of mixed opportunities. We’ve only seen glimpses of what we really can do. There have been patches of very strong growth – negated by sustained periods of unrest. This has created doubt in the minds of travellers, as to whether Sri Lanka is a safe holiday destination. It has also stifled progress in terms of infrastructure development and construction – and more importantly, losing trained people in the hotel industry to competing destinations such as the Maldives and Dubai,” Leelananda reveals.

He maintains that Sri Lanka is still a value-for-money destination with a good-quality product on offer. “The diversity we offer is unparalleled,” he remarks, but there is a need to segment the product and explore niche markets. So if the industry is to increase its rates, it must also take steps to uplift standards. Leelananda justifies efforts to increase the number of rooms, citing the industry’s ambition to attract 1,000,000 tourists by 2010. With 14,000 rooms in operation at present, the industry must look to add 11,000 more in order to achieve that capacity. In bridging this gap, there is also a need to look at the location of these new facilities. The SLTB has identified several areas for this purpose, including Kalpitiya and Dedduwa, which are situated some distance away from the traditional tourism zones. Sri Lanka is not a cheap destination, he claims, and points to Thailand, Indonesia and Malaysia as examples of destinations that are cheaper.

“We have to realise that it’s not only about hotel accommodation, but that related infrastructure must also be improved – particularly with regard to the road network, which is far from adequate. Train travel is popular among holidaymakers – but our services are not up to the expected standards. Health and safety is also an issue that we need to address – such as offering decent hospitals and medical care. We must ensure that these are in place before we target a million travellers,” Leelananda asserts.

Global travel trends are changing, he notes, and many people are opting to travel individually – as in Free Individual Travellers or FIT – as opposed to groups. “They want their own experience”, and there is growing demand for customised holidays through the Internet, he reveals. Another trend is lifestyle holidays, where tourists can travel to destinations that afford them the opportunity to mix with the local culture, and experience ethnic tastes and styles. Yet, emerging markets will have to be content with group travellers, he says. For instance, in China, the FIT market will take a long time to grow, Leelananda avers – as people are still not accustomed to travelling on their own.

“Achieving a million tourists by 2010 is not an unrealistic goal, but we have a lot of work to do. Setting the infrastructure in place is key to getting anywhere near that. Both the private and public sectors have roles to play here. The state must develop the macro infrastructure required: tourism zones, roads, airports, marinas, the rail network and other value additions – such as theme parks, hot-air ballooning and cable cars. The potential for water-based activities is huge, due to the natural resources we possess. The initiative taken by SriLankan Airlines with its amphibian operation should be commended, as this has added substantial value to the industry. We have a vibrant private sector that believes in tourism, and it has invested in the industry despite all odds. We have also been blessed with an amazing level of commitment from foreign tour operators – people who have kept their faith in the destination during good times and bad. Now, we need to look at the human-resource aspect, as we have lost many of our professionals as a result of constrained growth. Future travellers will demand very high service standards and, in order to be ready for that, we need to impart proper training,” he remarks in conclusion.