By Bandula Sirimanna Whilst the tourism authorities have been celebrating the arrival of one million tourists in the island in 2012, the travel trade has been rather skeptical over the statistics projected by the Sri Lanka Tourism Development Authority (SLDA), a tourism expert revealed. The paradox of hotels registering lower occupancy during the month of [...]

The Sundaytimes Sri Lanka

Mystery as Sri Lanka’s tourist arrivals rise amidst falling occupancy levels


By Bandula Sirimanna

Whilst the tourism authorities have been celebrating the arrival of one million tourists in the island in 2012, the travel trade has been rather skeptical over the statistics projected by the Sri Lanka Tourism Development Authority (SLDA), a tourism expert revealed.
The paradox of hotels registering lower occupancy during the month of December 2012 in comparison to recorded occupancy levels during the previous three years against the backdrop of claims by the authorities that the arrivals during December 2012 have been the highest ever recorded remains a mystery. This is the main reason for the travel trade, specially the hospitality sector to be disgruntled, head of the research team, Priyantha Fernando, a senior tourism consultant, says.

According to a survey conducted by a team of tourism experts headed by Mr Fernando, occupancy levels during the month of January 2013, too has remained below expectations and a cause of concern for the industry.

Most people in the industry are of the opinion that the statistics provided by the authorities are incorrect and that the arrival figures have been inflated to justify economic development, growth in the tourist industry, justify achievement of targets by authorities and to project a positive inflated image than the actual situation.

This leads to major repercussions from a tourism planning perspective, Mr Fernando argued.

Targeting 2.5 million tourist arrivals to Sri Lanka by the year 2016 and developing the required room capacity to accommodate the targeted which is more than a three-fold increase to the existing room capacity, if not founded on a strong base of statistical evidence with proper projections based on performance, trends and professionally planned marketing efforts, could impact negatively on the industry as well as the economy on the medium term, he predicted.

Tourism authorities in compiling the arrivals figures are guided by the definition of a “Tourist”. In brief a person arriving from another country and spending over 24 hours in Sri Lanka is counted as a tourist, he added.

It has been revealed that there are many visitors to Sri Lanka who will fit this definition but for all purpose and intent will not be tourists in the sense of where they would go for occupation of hotel rooms and spend on goods and services in the manner that a normal tourist will do.

According to the survey conducted during the months of November and December 2012 the country had large numbers of Sri Lankans domiciled in countries such as Australia, Canada, USA, UK, Italy and other countries returning home on holiday.
Since the war ended in 2009 Sri Lanka has witnessed the Diaspora returning on holiday in large numbers every year. Large numbers of Chinese are also working on different projects in Sri Lanka.

The highest number of tourist arrivals to Sri Lanka is from India followed by the UK. From countries such as Maldives there are large inflows for other activities and purposes rather than tourism. To a lesser extent it is the same for India, Mr Fernando revealed.
“We enjoy over 30 per cent repeat visitors year after year, obviously bolstered by Maldivians, Indians, etc. In addition there are many European tourists who are repeat visitors but prefer to use accommodation in the informal sector and other. In the compilation of arrival statistics all such persons are falling under the classification of a ‘tourist’,” he said.

Based on individual declarations made by the visitor, the breakdown by purpose of visit is available in the annual statistical report which could be used to gain an insight in respect of the use of services, facilities and other in Sri Lanka.

Therefore in the backdrop of having an idea of what is happening, in all probability the claims of the authorities on tourist arrivals could be correct but from a tourism industry perspective could be misleading, he added.

It is a fact that hoteliers had lower occupancy December 2012 than in the previous years. Even if the claimed figures of the SLTDA on arrivals during December was correct, most Sri Lankans returning home on holiday would have stayed with friends, relatives and in short-let dwellings.

Most Maldivians visiting Sri Lanka have family and friends living in Sri Lanka with whom they stay. A high percentage of Indian and Pakistani visitors use informal sector accommodation. The expatriates entering the country from time to time are counted time and again. They are housed within the development project sites. The number of Chinese working on development projects where they have come into Sri Lanka with their families and are residing on project sites will be evident if one visits the development sites in the Hambantota area.
Although peace within a country is a pre-requisite for tourism to thrive, there are other considerations as well. Political stability, law and order, environmental issues, human rights issues, the stand taken by tourists generating countries on destination countries and travel advisories issued from time to time have their own implications.

To some degree the travel insurance premium too is pivoted on these considerations. Having identified tourism as a thrust industry with above average growth potential for Sri Lanka, it is the responsibility of the government and its agencies to do the needful to create a favourable environment for tourism, he said. “We need to revert to our traditional markets and new potential markets which have not been fully exploited,” Mr. Fernando pointed out.

Going by results or achievements there is a lot more that could be done to register better market performance. More than adequate resources are now available for the authorities for marketing when compared to what it was a few decades ago. With new legislation and the new acts governing the tourist industry, greater power has been vested with the private sector to be involved in the operational process. The travel trade associations have their nominees appointed to the respective boards and it is their responsibility to protect the overall interest of the travel trade.

If the tourism authorities have failed, a part of the blame should be shouldered by the trade. It is up to the trade representatives to speak up if the Government or its agencies are faltering. “Has any trade representative resigned from any board citing that the respective organizations are not doing what it should in the interest of the country and the industry? – I do not know, but I doubt it. As per acts in force now, the industry has power to voice their opinion and to determine the destiny of Sri Lanka tourism together with the authorities. If the travel trade at large feels that the performance of the SLTDA, SLTPB (Promotion Bureau) and other institutions are below expected levels, the trade should urge their representatives to play a greater active role on the respective boards in steering the industry,” he asserted.

“On the product development aspect I wonder if the authorities know what they are doing. Are we on the path to develop a sustainable tourist industry? Having an overall master plan/development plan is one thing and what’s been done is another. Are we laying enough emphasis to protect and conserve the environment which is one of the main attractions when marketing Sri Lanka?” he asked.

At every level, national as well as regional, capacity among officers handling the subject of tourism needs to be built. The destruction being caused to tourism and natural assets needs to be stopped. The role and involvement of the Provincial Councils and the respective ministries need not only be defined but practiced for the betterment of tourism, he added.

When talking of tourism it is not only the number of tourists arriving in a country and the number of hotel rooms that matter. It is not confined to foreign exchange earned through tourism and the number of direct and indirect employment opportunities generated. Overall there needs to be greater emphasis on economic, social, cultural, environment issues and their impact on the nation and its population. “Having the correct equilibrium and understanding that Sri Lanka has no monopoly as a destination, but we need to compete with many countries to get our fair share and that too based on what we desire to have is in the hands of all stakeholders and the responsibility to be a catalyst and guide the industry is with the government and its respective organizations,” he said, quoting the research report.

Mr. Fernando was of the view that 2.5 million tourists by the year 2016 seems to be a bit far-fetched but 2 million tourists by the end 2016 will be more realistic and this too could only be achieved by been proactive.

It is good to be optimistic and reach out. Even with an accelerated program, one needs to address many areas to ensure the overall development process which will also include human resource development and having safety nets to protect negative impacts on social, cultural, environmental and to a lesser extent economic is taken care of, he said.

If tourism is to blossom, the aviation policy needs to be encouraging for other leading carriers from the major tourist generating markets to operate in and out of Sri Lanka and to allow greater charter flight movement, he said, quoting the report. “We cannot totally depend on upmarket tourism when looking at the targeted volume of 2.5 million in tourist arrivals. Therefore we need to be pragmatic with the development process making provision for a cross segment of tourists from all countries. We also need to bear in mind that the informal sector could mushroom pretty fast. If destination management and marketing is done professionally, tourism could become the main source of foreign exchange earnings for Sri Lanka over the next 3 to 5 years. At the end, it boils down to simple economics where the demand and the supply needs to be carefully watched and managed over the next few years for Sri Lanka and all stakeholders to benefit through tourism,” he added.

Mr Fernando is a former Director Marketing of the Ceylon Tourist Board and professionally qualified with a Msc. in Tourism Marketing from the University of Surrey and a Diploma in Hotel Management and Tourism. He accounts for over 40 years of experience in the field of tourism both in the public and private sectors. He also served as Director JobsNet, Sri Lanka’s premier employment services delivery network.

Occupancies fell in Jan-Nov 2012 against same 2011 period

As per Sri Lanka Tourism published statistics, the total number of hotel rooms in all categories including unclassified hotels had increased to 15,510 rooms last year from 14,653 rooms in 2011, an increase of 5.85 per cent.
The overall room occupancy rate indicates a drop of 14.1 per cent in 2012 when compared with the occupancy in 2011 for the period January to November. The year 2011 registered an occupancy rate of 90.3 per cent in all hotels which has fallen to 76.2 per cent in 2012. The registered drop in hotel occupancy is common to all classified and unclassified hotels maintaining almost the average drop across all categories.
The year 2011 registered 692,311 foreign guest nights during the period January to November.
Foreign guest nights in 2012 for the same period dropped to 577,836. This is a 16.5 per cent drop in foreign guest nights accounting for 114,475 guest nights. The local guest nights too registered a drop in 2012. For the period January to November 2012, local guest nights have been 140,400 against 197,436 registered in 2011. The drop of 57,036 guest nights in 2012 accounts for a 29 per cent drop.
As per published statistics of SLTDA, registered hotels in 2012 have recorded a drop in guest nights of 171,511 in comparison to 2011, against the backdrop of recorded an increase in tourist arrivals to the country exceeding 1 million tourists. The increase in tourist arrivals for the period of review (January to November) indicates 16.5 per cent accounting for an additional 124,895 tourists.
The increase in tourist arrivals for 2012 over 2011 is seen at 19 per cent, almost 165,000 more tourists than in 2011.

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