Unresolved issues remain amid tourism uptick
Tourist arrivals are gradually on the rise, but those in the industry believe that more needs to be done amid some concerns. The industry is focusing on achieving a target of 2.5 million arrivals next year and also increasing foreign exchange inflows.
In the 11 months of 2023, arrivals added up to 1.27 million and US$1.8 billion earnings.
The Central Bank of Sri Lanka reported a significant 78.3% increase in tourism income from January to November compared with the same period of 2022.
Tourism revenue in November surged to US$205.3 million, more than double from November 2022.
Pirantha Fernando, chairman of Sri Lanka Tourism Development Authority expects a surge in arrivals in 2024.
“The SLTDA, the Sri Lanka Tourism Promotion Bureau (SLTPB), Sri Lanka Association of Inbound Tour Operators (SLAITO), The Hotels Association of Sri Lanka (THASL), Destination Management Companies and all tourism-related entities are working hand in hand in an effort to enhance tourism for the peak season and the year ahead, while confronting global competition and growing living expenses,” he said.
Acknowledging the shortage of air connectivity, Mr. Priantha said: “In 2018, Sri Lanka had 50-52 airlines, and now it has a reduced to 30 airlines. Take direct flights to Sri Lanka, for example, which are non existent from Italy.”
Mr. Fernando also said efforts are underway to increase air connectivity and inbound seating capacity, while noting the Energy Ministry and Ports, Shipping and Aviation Ministry will ensure that tourism stays the course next year.
Sri Lanka’s aviation and tourism industries are advocating an open skies policy to boost economic growth and trade.
“We are currently focusing on implementing strategies to attract international airlines to the Mattala Rajapaksa International Airport as it can drive tourism-driven economic development in Southern and Eastern coastal lines, with emerging destinations demonstrating promising potential,’’ Mr. Fernando added.
M Shanthikumar, president of THASL, said hoteliers were all geared up for a successful winter season. “The growth rate has improved compared to previous years, but it remains low compared to our best year of 2018,” he noted.
Nishad Wijetunga, president of SLAITO, told the Sunday Times, member earnings are in foreign currency and had been granted a VAT exemption, which will be removed from January 1, 2024.
Having said that, he added: “We contract with our foreign tour operator partners at least a year in advance. Contracts for 2024 were negotiated and signed in the middle of 2023. Therefore DMCs will have to take losses due to the removal of the exemption, as we can’t increase prices to our FTO partners now.”
Therefore, it would help if VAT is deferred for DMCs for a year at least. Also the tax threshold being reduced, would seriously affect the entire SME sector in tourism, he stressed.
The SLAITO head is leaning on visitors from conventional winter markets, including Russia, the UK and Western Europe.
“The infrastructure issue is significant, as the vehicle fleet is quite old as the pandemic and economic downturn have led to numerous individuals losing their vehicles which is why proposals have been submitted for vehicle imports,” he said.
Meanwhile, Chalaka Gajabahu, the chairman of the SLTPB, attributed the recent rebound to effective crisis management.
“The winter is looking promising. An extensive amount of business to business (B2B) programmes, influential campaigns including ‘Seeing and Believing’, roadshows and travel shows added more value to create a positive mindset regarding Sri Lanka,” Mr. Gajabahu said.
In February, a global thematic campaign titled, ‘You’ll come back to Sri Lanka’ will get underway. Moreover, Extreme, a leading adventure brand, has partnered with the SLTPB to make Sri Lanka a top adventure and leisure destination.
Mr. Gajabahu said more technologybased approaches will be introduced for outbound and inbound tour operators.
“Sri Lanka is set to launch a mobile application between February and March, powered by the technical assistance of the Asian Development Bank that affords convenience to users to create personalised journeys across various provinces, access exclusive travel deals, and promotions on booking platforms for tourists.”
On the flip side, president of the Hoteliers of South, Senaka de Silva expressed dismay on how the tourismrelated entities are falling short in terms of differentiated marketing efforts.
From December to March, Sri Lanka’s high season offers the best weather in the south and west, making it an ideal time to visit beaches.
“There is a tendency that many tuk drivers in the Southern region fleece their customers without taking pride in showing their country to the visitors where the matter warrants investigation by tourist police,” Mr. de Silva said.
Meanwhile, Priyantha Thilakaratne, president of the Kegalle District Tourist Hoteliers’ Association conversely added: “The tourist industry’s underdeveloped areas ought to be developed. There are many hidden gem destinations in Sri Lanka that need to be unveiled.”
The dire need of a formalised plan to boost the gem and jewellery industry was further underscored by Mr. Thilakaratne.
Besides, president of Kandy Hoteliers’ Association, Rodney Armstrong stressed that hoteliers in debt are seeking a lowinterest Government loan with a 10-year repayment.
“Furthermore, a moratorium on the construction of new hotels should come into force until stability is achieved,” he said.
Industry stakeholders emphasised the crucial role of arrivals of visitors from January onwards in the sector’s revival and the economy.