ISSN: 1391 - 0531
Sunday April 6, 2008
Vol. 42 - No 45
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Tourism in trouble

The global tourism industry is a three trillion US dollar business annually, according to the World Travel and Tourism Council and no country -- rich, poor or in-between -- would not want a share of this cake. Acclaimed as a paradise island, Sri Lanka was one of the earliest in the region to start tourism as an industry to earn foreign-exchange and provide employment.

The year 2005 with 566,000 arrivals was a high but last year has been the worst in recent times, arrivals dipping to 494,000. The World Economic Forum (WEF) recently ranked Sri Lanka 73rd in a total of 130 countries in terms of its travel and tourism competitiveness index. India, a late developer, came 65th in comparison. And yet, despite the downturn, tourism remains the fourth largest foreign exchange earner -- next to new entrants textile and garment exports, foreign remittances, and of course, tea exports. Tourism's contribution to foreign exchange earnings amounts to 3.8 % of GDP.

This weekend, the floundering industry received a morale booster from the PATA (Pacific Asia Travel Association) holding its annual general meeting in Colombo. Last year's AGM was in Vancouver, and it goes to show that the industry is both sympathetic to the vicissitudes of struggling nations and supportive of their colleagues around the world.

But both the Government and the industry must work in partnership if Sri Lanka is to benefit from this money-spinning industry. The northern insurgency is the major spanner-in- the-works, but it is more the inability for this partnership to work that is causing hiccups. Take for example the drop in tourist arrivals from the European Union countries, especially Germany, once the top-most nation from where tourists came to Sri Lanka.

The Sri Lankan Government has been unable to strike a proper rapport with the EU. On a different front it is battling for most favoured status in regard to exports to the EU but on the tourism front, the EU has been slapping travel restrictions on Sri Lanka citing security concerns and human rights violations.

After years of lobbying, in 2003 the trade eventually managed to convince the then Government to start a cess fund that would be managed by the industry to promote Sri Lanka as a destination for holiday-makers worldwide, instead of the chronic ad-hoc way of doing things that the Tourism Ministry and the Tourist Board were noted for in the past.

After great labour, the Tourism Authority was born, and the cess fund with its considerable cash was put into the hands of the industry. But by all accounts, little has changed. The Minister's directives are meekly complied with, and no imaginative initiatives to market Sri Lanka have been seen. Tourism marketing still revolves around the traditional Gokkola pavilion at a travel fair; Sri Lankan rice 'n curry; Kandyan drummers and dancers -- and inviting travel writers.

Closely associated with the local tourism industry is the national carrier, SriLankan Airlines, and developments on that front also impact on the country's fortunes. From this week, the airline has reverted to full Sri Lankan management.

Since the management of the airline has for decades been plagued by political meddling and more often than not, with mounting losses, it has had to rely on foreign management to steer it out of the woods. We have had tie-ups with KLM, UTA French Airlines, Singapore Airlines and Emirates from the inception of Air Ceylon to date. But from last Tuesday, it flies on Sri Lankan steam.

The President who triggered the break with Emirates management on a knee-jerk reaction to what was seen as a snub to his office last December, told airline staff that he would place the blame on them if things go wrong from now onwards.

But if that is the case, there has to be a quid-pro-quo from the Government: No political interference on their part. There were undoubtedly advantages to both partners in the Emirates management agreement -- the bigger mystery being whether the Government had to sell 43% stakes in the airline to Emirates -- and whether there was any ulterior motive by the Government that did that to cozy up to the Emirs of the Gulf, who happened to be race-horse owners with large stables.

SriLankan Airlines has been competitive in an airline business that it in turmoil worldwide. Alitalia, the Italian national carrier losing US$ 1 million a day is up for sale. SriLankan, meanwhile, with innovative marketing strategies has 100 flights per week to India, using Colombo as a transit-point to the Maldives and has adapted to changing market forces and the volatile political climate. They were quick to fly direct to Beijing recognizing the economic boom in China. That kind of innovative thinking is something the travel trade can take a leaf from. But for that you need a totally committed political input and a trade that has the spine to do what it thinks is best for themselves, and the country.

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