Business Times

Future tourism growth from emerging markets not from the West-expert says

Words of wisdom (and concern) from a grower …

COLOMBO – Twenty years from now, tourists arriving at a more advanced international airport at Katunayake or the newly-built Hambantota international airport are most likely to be greeted by Russian, Chinese or Hindi-speaking guides. Name boards are also likely to include these languages promoting the sights, sounds and attractions of the country.

Lakshman Ratnapala

According to global tourism expert, Lakshman Ratnapala, tourism growth in the future will come and be led by the BRIC (Brazil, Russia, India and China) countries. “While advanced countries provide the tourism base, future growth will lie in emerging markets like the BRIC countries (Brazil, Russia, India and China). Emerging countries led by the BRIC nations will dominate the world economy and the growth in tourism,” noted the Sri Lankan, a one-time Lankadeepa journalist in the 1950s and a former Ceylon Tourist Board staffer, who has gone on to become a world figure in tourism.

Mr Ratnapala, who makes a once-in-two-years’ visit to his native land from San Francisco in the USA where he has lived for many years, believes Sri Lanka has a great opportunity to grow because while the war has ended, global tourism is also picking up after a severe recession.

While the figures are yet to be announced, world tourism in 2010 is expected to be the best year ever with a billion or close to a billion travellers, he said. “Tourism is coming out of a bad patch. Due to the global recession, tourism slowed down and took a dip for the first time in 2008 and 2009. They were the worst years for tourism. That also coincided with Sri Lanka’s worst times,” noted Mr Ratnapala, Emeritus President and CEO of Bangkok-based PATA (Pacific Area Trade Assocation). He was PATA President/CEO from 1992 to 1997 while serving the global organisation for many years.

Now in Colombo on one of his regular visits with wife, Barbara, Mr Ratnapala – who wears many hats including that of running Enelar International, a global tourism management consultancy and being President of the Foreign Travel Club of San Francisco – cautions against haphazard tourism development and says he is willing to offer his services to the country, if asked.

“We must take control of our development not allow development to control us. Tourism can be a disaster – a double edged sword. It can help us if channelled in the right direction. It can also cut us, hurt us and kill us if sent in the wrong direction. It’s like fire. Fire is a good servant, it will help you cook your meals, etc but if you let fire be the master then the fire will burn you,” he said. Mr Ratnapala says Sri Lankan authorities should be the masters of tourism and not let tourism be their masters. “It should be our servant,” he adds, pointing out also the importance of all benefits from tourism percolating down to the people of the country.

“If the poor cannot be made richer by tourism, then we will all be poorer (by it). Tourism is not for the five-star people. It’s for the ordinary people. They should be part of this process. People must be able to sell their products, their handicraft, get jobs. People should benefit whether it’s the taxi driver who takes the tourists, whether it’s the papaya grower who sells to the hotel, whether it’s the room maid or the manager.”

Mr Ratnapala says tourism has to be planned – otherwise there would be cultural degradation, natural degradation and human degradation. “We need sustainable development in terms of the carrying capacity.”

On Thursday, he spoke to the Business Times on a range of issues including mass market vs top-end tourism, the ambitious target of 2.5 million tourists by 2016, new markets and carrying capacity. Excerpts of the interview:

‘We need to look at tourism in the context of how it would benefit the country. We are in the business of tourism to make money; both the government and the private sector are united in the fact that they have to make money. The government wants money for taxes and the private sector to make profit. If that is the case, is it numbers that measure success? Is it volumes? Should we judge the success of tourism through the volumes or the profits made from tourism?

Nations trot out numbers to reflect success but in my view it’s the income generated to the national treasury that matters. That’s the true measure of success. Numbers can only be a guide. Put it another way, rather than count the number of heads on a pillow in hotel rooms we should be counting the number of dollars in our pockets.

Tourism is an international activity - not a national activity. This is a global industry – we can’t think nationally. If we do so then it is like domestic tourism. We are attracting tourists from overseas. So we have to look at the globe and see what attracts people to Sri Lanka. We need a wider and broader vision whether we think in terms of product development or whether we think in terms of hotel development.
Unless we are aware of global trends, the planners cannot make the right decisions. Tourism is an industry and like any other industry it has its pitfalls. It will grow as travel is an inherent right of people – the right to travel as much as the right to freedom of speech and expression.

New markets
The economies of the advanced countries will grow at 2.7% this year whereas the emerging countries will grow much faster, at an accelerated speed of 7.2%, according to forecasts. This is a 2-speed global economy.

Advanced nations have their own issues; they are trying to balance budgets which means greater hardships for the people; there are civil disturbances across Europe over unemployment. Tourism growth from there will be at a lesser pace as people have less money to travel.
So our future growth will come from emerging countries. While we need to strengthen traditional markets, we need to cultivate new and emerging ones.

International challenges
Sri Lanka has a vast reservoir of competent, talented and efficient people. We need to unleash the creative talent of these people. We need to upgrade our business model in human resources development, product development (new markets). We need to develop new products all the time.
Innovation and diversity are necessary in a competitive tourism environment. Innovation means new products to attract visitors. Diversification means diversify our experiences and stay competitive like Thailand for example where new products/new experiences are being developed all the time.

Sri Lanka has a reservoir of goodwill in the world. Whether we market or not, a certain number of tourists will come. Even in the worst of times, we had 400,000 vistors. Now in the best of times we have 600,000. That is pent-up demand being released - 25 years of pent-up demand.

For the economy to grow, the middle class must grow. You can have GDP or GNP growth but above all the middle class must grow. When this happens, purchasing power increases because it is the middle class who are the drivers of economic growth. That growth will also help tourism.’

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