The other day a hotelier on the western Sri Lanka coast said he just couldn’t understand the arrival statistics of tourists. “We saw a surge in arrivals in December – according to statistical data released by Sri Lanka Tourism, but where are they staying?” he asked. This same issue puzzled a veteran hotel manager in [...]

The Sundaytimes Sri Lanka

Tourism rules but are the numbers right?


The other day a hotelier on the western Sri Lanka coast said he just couldn’t understand the arrival statistics of tourists.
“We saw a surge in arrivals in December – according to statistical data released by Sri Lanka Tourism, but where are they staying?” he asked.

This same issue puzzled a veteran hotel manager in the south a few years ago who said May-June months had been low for his old, upscale property and expected it to be the same across the country. He was however surprised to find that total arrival figures released later by the authorities, saw a sharp rise in those months.

According to latest figures, January to June 2014 arrivals totalled 727,353, up 24.6 per cent from 583,573 in the same 2013 period. Officials say targetted arrivals this year is set to reach 1.5 million against 1.2 million in 2013.

How does one explain figures released by the authorities and actual arrivals based on occupancy levels at hotels? “If we had over 150,000 tourists in December 2013 our hotels should have been full. Instead we had occupancies of 50-60 per cent,” one hotel manager argued.

The accuracy of tourism arrivals figures has plagued the industry ever since the sector started to bloom in the post-2009 war period. Tourism authorities have defended the figures saying the arrivals calculation is based on the standard World Tourism Organisation classification which says any foreigner who stays more than 24 hours is considered a ‘tourist’.

However a notable percentage of arrivals that come under this classification are diplomats, aid and NGO workers, UN agency workers and Sri Lankans holding foreign passports – a large number from Australia, the US, UK and the rest of Europe. And that’s where the problem lies and has been for many years.

However another issue surfaced earlier this year when Sri Lanka Tourism readjusted the 2013 arrivals figures and released a set of new figures. Denying the figures were being ‘massaged’ to keep up with the ambitious target of achieving 2.5 million arrivals by 2016, officials said the ‘correction’ was meant to improve the statistical data collection process.

Another response to the jigsaw puzzle of figures not tallying with occupancy levels is that many visitors are staying in new accommodation segments that are growing – home stays, guest houses and hostels. True to some extent but doesn’t still clear the blurry picture of statistics.

‘Lies, damned lies and statistics’ (courtesy Mark Twain) is the issue that confronts many sectors of the economy. Well-known economists like Nimal Sanderatne, W.A. Wijewardena, S.S. Colombage and Muttukrishna Sarvananthan have raised doubts and credibility issues over the collection mechanism of economic data by the Department of Census (DCS) and the Central Bank.

For example take inflation and cost of living – the focus of an analysis by Sarvananthan published on this page. He says anecdotal evidence suggests that ordinary people, including him, feel the declining rate of inflation in 2013 and 2014, as pronounced by the Government, is unbelievable and unrealistic.

“… The foregoing anomalies between the rate of inflation and the rate of growth of private consumption expenditure are circumstantial evidences for doubting the inflation data DCS and trumpeted by the CB. There are doubts and questions raised on the authenticity of economic data released by the CB and DCS by a growing number of economists in the country in recent times. Recently, this author exposed the huge underestimation of the rate of unemployment by employing an alternative method for computing the rate of unemployment,” he wrote.

Sarvananthan argues that falling inflation rates have been cited as the reason for the reduction in the interest rate by the CB in order to stimulate economic growth. However, reducing interest rates (borrowing cost) have not resulted in growth in private sector borrowings which is dampening economic growth. “This phenomenon strengthens the scepticism about the official economic data in Sri Lanka in recent years,” he says.

‘Positive’ economic statistics was also used by the President at the Ceylon Chamber of Commerce’s 175th anniversary dinner earlier this week, to throttle his political opponents who say the economy is not moving. On the surface, the figures look great on economic growth, inflation, cost of living, etc. But is this the real thing? Is this just scratching the surface to cover hidden and worrying issues like rising debt and dependence on borrowed foreign cash to boost reserves? In the absence of full disclosure, Sri Lankans are forced to make their own conclusions, more or less based on what price they pay for goods in the marketplace.

The tussle over ‘real’ economic data is part of the crisis in the country in terms of credibility, transparency, governance, unbridled corruption and the rule of law. Recent events have showed that even the enforcers of the law – Police – are not able to exercise their authority when dealing with politicians and their cronies and powerful business cronies (the ‘untouchables’ in our book). To add fuel to the fire, a senior BOI official asked a BT reporter whether he was ‘writing a positive or negative’ story, when some investment figures were sought. The response implied that if it was a ‘negative’ story, the figures would not be released, which is the public’s right to know. Such is the pressure on the media.

A new report by the beleaguered Transparency International, Sri Lanka titled ‘National Integrity System Assessment (NISA) 2014’ deals extensively with governance and accountability issues, and says the bane of the entire system is the powerful presidency which should be scrapped.

Tourism is one sector that is entirely driven by the private sector with the Government acting as a facilitator and is thriving in post-war Sri Lanka. However one piece of advice would be to implement a more focused collection of data on tourist arrivals. It will not only stimulate the industry and provide the actual data needed to grow the sector but also be the first, probably in the world, to focus on the ‘real’ tourist arrival.

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