Good times for tourism

Amidst the gloomy sentiments due to high taxation, 2024 kicked off on a positive note at least for one sector; tourism with arrivals slightly short of the target of 1.5 million. Arrivals in January to December were 1,487,303, sharply up by 106.6 per cent from 719,978 in 2022. Arrivals last month were 210,352, sharply up from 91,961 in December 2022. This is still lower than 253,169 arrivals in December 2018, the highest month for arrivals recorded so far.

The top source markets in the January-November 2023 period were visitors from India, the Russian Federation, UK, Germany, China, Australia, France, Canada, US and the Maldives.

Foreign exchange earnings from tourism in 2022 were expected to exceed US$2 billion, up from $1.13 billion in the previous year.

In other sectors, demand in the food and beverages sectors fell by 35 per cent last year due to lower incomes and is set to drop further this year for the same reasons and due to rising taxation on essential goods. This would result in inflation falling – though to the ordinary consumer it means goods are still traded at high 2022-maintained prices.

As I pondered over these issues, the home phone rang. It was Seeni bola, my banker friend (so named by friends after he once boasted that other banks were handling ‘seeni bola’ deposits compared to his bank), calling this Thursday morning.

“So how is the New Year,” he asked, after we exchanged the usual New Year greetings. “Fine…..fine,” I said, adding that it’s going to be a challenging year.

“You are right, with elections on the cards and a new regime of high taxes, it’s going to impact prices. I wonder how the ruling regime would tackle people’s support at the polls amidst the rising cost of living,” he said.

“That’s a tough one. The President and some ministers are saying the cost of living would come down in the second quarter of this year with a possible change in the tax regime,” I said, asking him also about his thoughts on the tourism sector.

“Well….this year, officials have been saying we would exceed 2.3 million arrivals, which if true would be a huge plus for this sector,” he said. The 2.3 million arrivals was the record figure in 2018 and thereafter arrivals dropped owing to the Easter Sunday bombings in 2019 and the COVID-19 pandemic which shut the airport for several months followed by the economic crisis in 2022.

“The authorities should also, as soon as possible, get the global tourism marketing campaign off the ground. Otherwise, these arrival targets won’t be met,” I said.

Since July last year, local authorities have been painfully trying to launch the 1.45 billion rupee-worth (nearly $5 million) global marketing campaign over a period of 12 months targeting markets – the UK, Germany, France, Italy, India, Ukraine, Russia, West Asia, Scandinavia, South Korea, Japan and Australia. But it has been delayed due to procurement procedures, call for tenders and other bureaucratic issues. A tourism tagline titled ‘You will come back for more’ was launched at trade shows in France and the UK in the past few months and also locally.

As I walked to the kitchen to get a mug of tea, I heard Aldoris, the choon-paan karaya, coming down the road in his tuk-tuk with a ringing tone resembling a Gypsies song. Kussi Amma Sera, quickly brought me a maalu-paan and went back to the gate to join the conversation, the first time the trio and Aldoris were meeting in the New Year.

“Denatama badu saha bakery nishpadana mila ihala gihin, mokada badu wedi wela ne (Already prices of goods have gone up, including bakery items because of the rise in taxes),” said Aldoris, handing over maalu-paans.

Kussi Amma Sera went into the kitchen once again and brought a cup of plain tea for Aldoris as a New Year offering. “Api balaporoththu wenawa oya aya karana mila godak wedi wenne ne kiyala (Let’s hope your prices won’t be too high),” she said.

“Mae avuruddeth apita penewi godak tharuna kattiya pita rata yanawa, mokada chanden kavuru avith anduwa karaida kiyala nodanna hinda. Avinishchitha hinda (This year too we will see many young people leaving the country as we face elections and no one knows who will run the new government. It’s so uncertain),” expressed Serapina.

“Magey gamey godak tharuniyo meda peradiga yanna inney than lankawe angalum karamantha wala rassawal adu nisa (In my village, many young women want to go to the Middle East because there are fewer jobs in the garment sector),” noted Mabel Rasthiyadu.

In the meantime, hotels across Sri Lanka were full during the Christmas and New Year period, largely due to a rising number of tourist arrivals and Sri Lankan expatriates who make their annual journey to their homeland during this time of the year. Hotel lobbies in Colombo were crowded with guests and their friends, while tourism authorities also organised various events at Galle Face and Colombo Port City including a fireworks display on December 31.

Meanwhile, last November the Sri Lanka Convention Bureau (SLCB) launched the first-ever Road Map for MICE tourism (business events and conventions traffic) outlining a 3-year plan for 2024 to 2026.

The bureau said under its ambitious target for 2026 it aims to generate 20 per cent of tourist arrivals through MICE activities, projecting an 11 per cent increase in MICE arrivals from 2023.

In preparing this plan, the bureau had engaged industry experts, met with key representatives of industry bodies, and organised a productive meeting with Key Opinion Leaders (KOL) to gather insights and perspectives.

One of the challenges facing tourism is the minimum pricing formula at $130 per room in hotels (promoted by hoteliers) which was introduced last year by the authorities, a move hotly objected to by travel agents who say it would negatively impact on the industry as other competing destinations are selling at lower than $100 per room.

However, despite these concerns, December saw a full house in most hotels due to the Christmas and New Year holiday rush.

Just as I was winding up my column, got a call from a tourism entrepreneur, and in answer to my question about tourism, he said: “Tourism is underperforming and as long as we put the global marketing campaign on hold, we would have issues.”

Finally the days and months ahead would be interesting times, as much as challenging times, for the country and it remains to be seen whether 2024 would see another exodus of young professionals or a return of professionals who have migrated.