Ups And Downs For Hotels Amidst Tourist Arrivals

Tourist arrivals record 18% increase until April 2012 with a 9% increase in April alone.

Sri Lanka Tourist Development Authority (SLTDA) statistics show an increase in tourist arrivals to the country up to April this year – but has this increase also been reflected in the occupancy of hotels?
According to the SLTDA, there has been an 18% growth in tourist arrivals to the country up until April, with a 9% increase in April 2012 alone, when compared with April 2011.
When asked if these statistics were accurate in reflecting the numbers of tourist arrivals at hotels, President of Tourist Hotels Association – Anura Lokuhetty explained that the definition of a tourist is “a foreign passport holder spending 24 hours in a different country.”
“So the SLTDA statistics are absolutely correct,” he said. He added that “Sometimes, when the occupancy is at low levels, we may find that the hotels do not experience the same growth as the growth to the country… On the other hand we can’t forget that our informal sector has improved a lot. We have about 8,000 rooms in the informal sector,” Lokuhetty said. He explained that the informal sector included smaller hotels, and guest houses, while apart from this, some tourists also stayed with friends or relatives instead of staying at hotels.
Chairman, SLTDA, Nalaka Godahewa, meanhwile said that, “People who come as tourists do contribute to the industry. It may not be directly captured in the hotel sector, but it doesn’t mean they aren’t contributing.”
Anura Lokuhetty also pointed out that regardless of tourist arrivals at hotels, foreign exchange revenue from tourism has seen an increase.
“The per guest per night expenditure has gone up. Compared to last year, the per guest per night income has gone up by about 12% and that’s a great growth. We are earning around USD 99 per guest per night, so compared to Malaysia and Thailand, we are ahead of them,” he said.

Hotels: ups and downs
Hotels in different parts of the island have experienced varying occupancy levels.
President, Colombo City Tourist Hotels Association, M. Shanthikumar, said that up until March, there had been an increase in tourist arrivals at the city hotels. “In April, it was almost the same, and in May, there has been a slight drop, of about 10%.”
He went on to say that, “However, the revenue has, compared to last year, gone up dramatically by at least 30%. This is purely on minimum room rates.”
Shanthikumar said that the imposing of minimum room rates has had a positive impact on “every single hotelier, one star to five star” and had also resulted in higher service charges, which had proven beneficial to staff.
Hoteliers in Kandy, however, have not been as fortunate. President, Kandy Hoteliers Association, Rodney Armstrong, said that occupancy levels this year have been quite low compared to last year, particularly in the months of April and May.
“This may be due to a drop in the numbers of European tourists, we aren’t sure of the reason yet,” he said, noting that there has even been a fall in the numbers of domestic tourists.
“We are hoping that this would turn around by the end of June, when we target the Middle Eastern market,” he said.
President, Hoteliers of the South, Senaka de Silva, meanwhile said that tourist arrivals at hotels so far this year had reflected the “usual pattern”.
“At the same time, I am a bit worried about the situation. There have been a number of hotels coming up, and prices are also being jacked up. Sri Lanka is no more a cheap destination. Hoteliers also can’t predict prices for the next season,” he said.

Increasing Investment
With statistics showing increased tourist arrivals , interest in investing in the hotel industry – by both existing companies and new investors, including non-hoteliers – is also at a high.
Chairman, SLTDA, Nalaka Godahewa, said that “We have so far approved 138 projects of which 83 are final approvals, while the others have not yet completed Environmental Impact Assessment, which is a legal requirement. The projects approved will result in approximately 8,500 rooms being built over the next three years.”
He also said that the entry of even non-hoteliers into this industry “is a good thing, because for the last 20 years the industry was stagnant. It will bring in new money and new thinking.”
Chairman, Jetwing Hotels, Hiran Cooray, also said that they had “ambitious plans” to expand, and that there was a significant increase in the numbers of those interested in investing in the hotel industry. “I think tourism has great potential for this country, and it is likely to continue to do well, so everybody wants to jump in the bandwagon,” he said.

Marketing the industry
Increasing investments aside, most hoteliers are of the view that, for a country planning to achieve a target of 2.5 million tourists by 2016, a lot more promotion of the industry is required.
“The increase in tourist arrivals at the hotels, definitely in the first quarter of the year was quite evident, but last month (May) it was quite low. If we are to achieve our target of 2.5 million, then definitely the number of hotel rooms should be increased,” said CEO, and Sector Head of Sri Lankan Resorts, for John Keells, Jayantissa Kehelpannala.
He also said that, “Right now, the biggest issue would be to market the destination.”
Senaka de Silva, of the Hoteliers of the South, also said that, “the numbers of rooms are increasing, and that’s very good, but at the same time we need to do some very serious promotions. There is insufficient promotion of the industry and this is not a very sound situation,” he said.
Apart from the issue of tourism promotion, some hoteliers have also expressed worry over the recruitment, or retention, of staff.
“The recruitment of trained staff has become a problem,” said de Silva. “People who get training would sometimes find jobs abroad, and that issue has to be addressed.”
Rodney Armstrong of the Kandy Hoteliers, also cited the recruitment and retaining of skilled staff as an issue hoteliers were struggling to deal with.
The city hotels, however, while accepting this as an issue, have said that it is something that they are “working on”. According to M. Shanthikumar, this problem results partly from the hotel school not producing sufficient trained staff to meet industry demands.
However, he also noted that the number of people going overseas in search of jobs in this industry has reduced, and prevailing industry conditions too could prove attractive to local job seekers.



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