A Look Back at Sri Lanka Tourism 2013


EU Head in Sri Lanka David Dally addressing the gathering at the ‘Switch Asia’ 2013 awards ceremony held in Colombo.

By Srilal Miththapala

Ref. TKS Securities Research

The Katunayake express way has given Sri Lanka tourism a big boost and the Outer Circular express way and the extension of the Southern highway to Matarawill certainly create greater tourist movements. The commencement of the Kandy highway is indeed an important step for the development of tourism and all tourism stakeholders look forward to the speedy completion and commissioning on this expressway.


There is much controversy and debate about the setting up of casinos in Sri Lanka. Tourism experts see this as somewhat of a ‘necessary evil’ in the tourism trade. If casinos are carefully developed, and managed, it can be a game changer for the industry. Singapore tourism was reaching a plateau with growth rate petering out, when the government of Singapore took a strategic decision to introduce to carefully managed casinos, which has given Singapore tourism acomplete new lease of life, with monthly arrivals now exceeding 1.2 million on the average.

In Sri Lanka also perhaps this model could have been followed by developing casinos in one central area away from the city (possibly in Kalpitiya), instead of having them in the city (this was suggested in the ‘Way Forward’ for Sri Lanka Tourism report, prepared by the Private Sector for the Secretary, Ministry of Finance in April 2010). Not withstanding this, there are now 3 mega ‘integrated development projects’ that been approved in the city, which no doubt that will make a significant impact on Sri Lanka tourism portfolio, although there may be some socio-cultural fallout.

Emerging Tourism Trends

There appears to be an emerging tourism trend, where there is a large influx of tourists, seeking a more authentic experience, rather than the conventional tourism offering. Consequently, these tourists seem to be seeking out cheaper accommodation units and home stays, where they have a richer, more down to earth exposure of what Sri Lanka can offer. These tourists appear to be more of the younger age group and are much more knowledgeable, utilising internet applications to find their way about, seeking adventure and authenticity, and are more conscious and concerned about the environment.

However, most of the accommodation units used by these ‘new’ tourists are from the informal, unregulated sector of tourism in Sri Lanka. Due to the fact that these units are not officially recognized, no data is available with the SLTDA regarding this sector, through the formal reporting channels. Hence, we may be missing out an important and newly emerging trend that is, developing in Sri Lanka tourism sector.

The writer has conducted two surveys in the Ella and Sigiriya regions and found that there is a considerably large informal and unregulated tourism sector in these two areas, with over 40 unregistered units operating in each area.

However, it will be a simple task to assess this ‘leakage’ factor and analyze whether it is increasing YOY, showing a growing trend, if the proper data is available.

All these tourists’ arrivals gets captured at the point of entry. However, the problem is that details of their stay are not recorded, since the unregistered accommodation units do not report on this. However, all the registered hotels in the country do report the foreign guest nights reasonably accurately to the SLTDA on a monthly basis as is required by law. Hence, it will be a simple analysis to compare the arrival figures, against the formal foreign guest nights, the difference of which will indicate this leakage figure.

Unfortunately, the SLTDA statistics for both 2012 and 2013 are still unavailable to analyze and study this important trend in Sri Lanka tourism (see Strategic Direction below).

New Airport at Mattala

Certainly the new airport at Mattala can give Sri Lanka tourism a big boost, provided a proper strategy to market the entire product offering is in place. The airport is very strategically positioned in the Deep South, which can be a good launching pad to promote Sri Lanka tourism in the South and East coast of the country. However, there has to be strategic thinking to attractively price tours to these regions, partnering with tour operators, using chartered flights to land at Mattala airport in Hambantota. Unless such aggressive efforts are made to promote the whole area, the airport will not be fully utilized to bring out its full potential.

No doubt the expected high point for Sri Lanka tourism during the year was to be the CHOGAM, which unfortunately seems to have ended as a damp squib as regard to the occupancy in hotel rooms. The City Hotels Association President, M.Shanthikumar said ” at the peak from November 15th to 16th, the normal average occupancy in the city hotels was 55%. However, from November 10th to 13th , the occupancy was 30% and it was only about 40%. This was far below our expectations, where a minimum of 4000 city hotel rooms were expected to be occupied, but only 2,000 – 2,010 rooms were eventually occupied” – Daily Mirror 18th November 2013.This was reflected when the November tourist arrivals were released, showing only a 3% YOY increase, the slowest YOY growth for Sri Lanka tourism for many years. City hotels, which expected a very high occupancy rates ended up having large number of rooms unoccupied.

However, on an overall basis, certainly the event gave Sri Lanka tourism considerable exposure, inspite of the fall outs due to other political controversies.

Sri Lanka Association for Inbound tour Operators (SLAITO) and The Hotels Association of Sri Lanka (THASL)

The two main tourism associations SLAITO and THASL continued to carry the flag for Sri Lanka tourism. There was no change in the upper hierarchy of the governing Executive Committee of either body. The AGM ofSLAITO washeld on August 24,2013 re-electing MahenKariyawasam as the President. In the meantime, THASL held their AGM at the newly opened hotel Kingsbury on 28th October 2013, re-electing Jayantissa Kehelpannala as the President (albeit under some very hot conditions!).

Impending HR Crises in the Industry

The shortage of well-trained tourism personnel continued to be a major issue for the industry with the situation worsening with many new hotels coming up in the country and absorbing the existing experienced personnel. This matter has been talked about at great length, and many tourism professionals, including this writer, has brought this up at many forums. “While everyone is scurrying around trying to build and develop infrastructure and hotel rooms, the critical HR factor is a hidden issue, which will soon mushroom into a great crises in the near future, if not addressed in a strategic and holistic manner immediately” – Srilal Miththapala, Impending HR Crisis in the Hotel Industry, Daily FT.

There are moves by the Sri Lanka Institute of Tourism and Hotel Management (SLITHM)to forge partnerships with a foreign tourism educational body, to revamp their operations. This is indeed a very good initiative, but there are still remains the fact that SLITHM alone cannot produce Sri Lanka tourism industry’s entire people requirement. It is up to the private sector tourism bodies (Ceylon Hotel School Graduates Association, THASL) to take the initiative to draw up a strategic master plan on how this problem should be addressed, and initiate a private sector / public sector partnership urgently.

Destination Accolades

There was a marked drop in overall tourism accolades and ratings by various world agencies for Sri Lanka. Last year saw Sri Lanka beingassessed as the best emerging destination in the world for travel for 2013 by the prestigious Lonely Planet publication. However, Sri Lanka does not feature anywhere in the rankings for 2014.

The absence of any such new form of recognition perhaps indicates that the interest for Sri Lanka could be waning, with the destination losing its ‘luster’.

Hotel Rates

Much has been debated about Sri Lankan hotel rates, which many consider too expensive, and un- competitive among our Asian neighbors. There could be some truth in this, where post war resort pricing has increased some 40-50%. The initial price correction was certainly badly needed for the hotels to recover from the decades of stagnancy, but there could have been an ‘over-correction’ which saw some occupancy dip in 2013. However, with the perception that the destination has become too expensive, there is some price correction that seems to have taken place, especially in the resorts, where most hotels have either held their prices for 2013/14 or in some cases discounted down. This is a common phenomenon and provided that the market forces are not interfered with, the supply and demand will provide correction.

However, this is not so in the city, where there is a minimum price stipulated by the government, which has to be adhered to. Debates still continue to rage regarding this between the hoteliers and travel agents, but fact of the matter is that with the destination now maturing, free market forces should be allowed to prevail.

Sustainability and Tourism

The year showed more and more focus by tour operators and tourists on sustainability and environmental issues. Sri Lanka being identified as one of the 34 bio diversity hot spots in the world; it is quite easy for the destination tocreate competitive advantage of this aspect.

Unfortunately, the main private sector hotel sustainability focused project, initiated by the Ceylon Chamber of Commerce, the EU funded Greening Sri Lanka Hotels Project (GSLH) came to an end in November 2013, after 4 years of successful operations. The project had more than 350 hotels registered and working on sustainable consumption practices. Many workshops, training programmes and awareness programmes were conducted all over the island and the GSLH project created Sri Lanka’s first dedicated Green Award for the hotel industry, which became a much sort after award by Sri Lankan hotels.

The project produced from its research, Sri Lanka’s first ever Water and Energy Benchmarks for the hotel industry.

© Greening Sri Lanka Hotel Project

Without a dedicated agency or organization continuously championing this cause, there isconcern that the positioning of Sri Lanka as a sustainable destination may fall by the way side.

Strategic Direction

As indicated earlier, there is no strategic direction as to how the Sri Lanka tourism sector needs to develop. The original positioning statement developed by the industry professionals some 6-7 years ago during the now defunct ‘Small Miracle’ Branding Campaign – Asia’s most Authentic, Diverse and Compact Island is still very valid and should form the core foundation of Sri Lanka’s future tourism development.

Also analysis of statistical data and trends, supported by good research is vital for planning as against ‘knee jerk’ responses.




In the first part of the above article, I have quoted that Dr D.S.Jayaweera, Director General, Sri Lanka Tourism as saying that the tourism targets for 2013 have to be revised downwards, by refering to a news report in the ‘Daily FT’ of July29,2013.

The author says, “I was unaware that Dr Jayaweera had been misquoted.” Dr Jayaweera corrects the position as follows. “I would like to emphasise that the above news item is factually not correct. IN my speech I said thtat upto June 30, 2013, foreign tourist arrivals are forecast as 1,280,000. I was unaware of this correction and I sincerely apologise to Dr Jayaweera for the oversight.

[Via The Island]


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s