With the no signs of recovery for tourism in Sri Lanka in the first two financial quarters the industry is banking on hopes for a revival by winter later this year from risk averse markets and by controlling the pandemic situation within the country. It will not be easy for the industry stakeholders to sustain [...]

Business Times

Sri Lanka’s tourism industry crisis worsens


File picture of tourists at a restaurant outside Colombo

With the no signs of recovery for tourism in Sri Lanka in the first two financial quarters the industry is banking on hopes for a revival by winter later this year from risk averse markets and by controlling the pandemic situation within the country.

It will not be easy for the industry stakeholders to sustain the businesses as a recovery is not expected to take place in the first two quarters of the current financial year, Aitken Spence Travels Managing Director Nalin Jayasundara said in an emailed interview with the Business Times this week.

The industry is counting on the vaccination drive for its frontline staff and the country to ensure travellers will feel safe to come back to Sri Lanka and that other markets will remove the restrictions placed on the country following the recent outbreak of the COVID-19 pandemic in April this year.

“What looks a potential source market today might not be the same tomorrow as the situation globally is changing rapidly,” he said.

Under the current circumstances markets that have conducted successful vaccination programmes like the UK, Germany and West Asia need to be considered, he explained.

And though China and Australia are potential markets it is hard to tap them today due to the travel bans imposed on their nationals. In this respect, it is the more risk averse countries such as Russia and CIS that can bring the numbers in during this period, Mr. Jayasundara noted.

An industry in crisis

The pandemic situation also needs to be brought under control to improve Sri Lanka’s image among potential travellers, he pointed out.

He noted out that with the growing pandemic crisis a majority of the registered travel companies in the country “will find it extremely difficult to survive if the pandemic continues” as most are sustaining themselves with loans and moratoriums.

The tourism industry’s downward trend started with the Easter attack in April 2019 and with no signs of any future business “there is a risk of more travel companies closing down or scaling down their operations further,” he said.

Given the current financial crisis the industry is facing the industry is now looking at obtaining a credit facility from an international donor on attractive terms and conditions to sustain the tourism industry, especially the SME sector, he said. Timely action is required now as there are almost three million direct and indirect beneficiaries from this industry, Mr. Jayasundara pointed out.

Aitken Spence role

Queried on how the company was able to sustain in these difficult times, Mr. Jayasundara noted that as a leading travel firm they were able to retain their staff and as a result of the drastic reduction in tourist arrivals they have focused on the local market and generated a substantial volume of business to their suppliers.

“Though the tourism industry is going through an extended period of uncertainty, it is important to look at the future with hope and optimism” and continue to train their staff,” he said.

In addition, the Aitken Spence Travels MD pointed out that their joint venture partner TUI, the world’s largest tourism company, has already signed up the agreement for the winter season 2021/22 “which is a valuable endorsement for the destination”.

Ensuring they retain their competitiveness in the markets, the company in January this year was able to have a strategy in place to attract charters from Kazakhstan which is a new market for Sri Lanka. In addition, they were able to handle a number of travellers from traditional and other source markets as well, he said.

He pointed out that his company always strives to look out for new opportunities and take “well calculated risks to explore the potential in new markets”.

As a result of these efforts the company was able to secure the largest market share in inbound travellers this year.

Competitive edge

Retaining its competitiveness with other markets, Sri Lanka’s offerings have the ability to target “different segments including the niche markets”.

However, Mr. Jayasundara pointed out that “certain authorities tend to talk about making Sri Lanka an upmarket destination forgetting the fact that there are stakeholders who offer different products in tourism ranging from homestays to luxury boutique properties catering to different segments of travellers”.

In this respect Sri Lanka should be able to balance its product offering in relation to price and offer a unique experience to all segments of travellers.

Changing Act

Moreover with the tourism authorities keen on changing the existing Tourism Act the industry is faced with another issue as their contribution through the Tourism Development Levy is a substantial portion extended to drive the economy of the country.

Following Tourism Minister Prasanna Ranatunga’s assurance that the change of the Tourism Act will be carried out through dialogue and in consultation with the industry as it is “for the betterment” of the industry, they have decided to submit proposals for the new Act within a period of three months.

Tourism generates income for a number of key government institutions like the Wildlife Department, the Central Cultural Fund and airport and aviation.

Mr. Jayasundara also explained the importance of tour operators in the industry as they have the capacity, reach and market knowledge to attract travellers to the destination.

He noted that following the reopening of borders in January this year the tour operators and DMCs proved they are able to make a major impact in reviving and sustaining the tourism industry in Sri Lanka.

In this respect the industry expects due recognition to be given to the tour operators in developing the sector.

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