Sri Lanka’s tourism milestones in 2012 and...
This article was prepared by undertaking an in-depth analysis of the statistics published by the Sri Lanka Tourism Development Authority (SLTDA) in its Annual Statistical Reports (ASRs) with a view to provide a detailed interpretation of the published data and also to highlight certain gaps in the ASRs’ tourism statistics.
Important milestones
In 2012, Sri Lanka recorded slightly over one million (1.006 million) tourist arrivals in its 46-year history of tourism development on an organised basis, beginning from 1966. Thus, Sri Lanka emerged as a Million Tourist Destination, which was indeed an important milestone in its rather long and chequered history. This important milestone would have been reached much earlier, probably in the 1990s, if not for the long and protracted war which plagued the country for over 30 years, beginning from 1983. It is unfortunate that Sri Lanka had to struggle for over 30 years to reach this milestone when most other developing countries, particularly in the Asia-Pacific regions, which started their tourism development programmes almost at the same time as Sri Lanka, were able to reach this milestone in the 1980s and 1990s.
Today, they have become multimillion tourist destinations contributing significantly to their growth and development. Examples are Singapore - 14 million, Thailand - 24 million, Malaysia - 34 million, South Korea - 10 million, Vietnam - 6 million, Indonesia - 7 million. In the South Asian region, only two other destinations had been able to reach this milestone, namely India - 6 million and the Maldives, which started tourism in early 1980s, received more tourists in 2012 than Sri Lanka.
Similarly, in 2012, Sri Lanka recorded more than one billion dollars (1.1 billion) as earnings from tourism. Thus, Sri Lanka emerged as a Billion Dollar Export Income Earner, which is another important milestone, in its 46-year history.
The other billion dollar export income earners for Sri Lanka in 2012, in order of importance, were (1) foreign remittances (6.1 billion), (2) textiles and garments (4.1 billion), (3) transportation services (1.7 billion) and (4) tea (1.4 billion). Sri Lanka has an ambitious target of overtaking the latter two export income earners by the year 2016, even if tourist arrivals fall short of the target of 2.5 million fixed for that year.
World tourism scene
The year 2012 also saw world tourist arrivals overtaking the one billion mark (1,035 million) for the first time since the conclusion of World War II.
During the first four decades since the war, North America and Western Europe dominated the world tourism scene, accounting for more than two-thirds of world tourist arrivals and also producing more than three-fourths of world’s tourists. This situation changed gradually over the last two decades (1990s and 2000s) with the emergence of Asian economic tigers. The fastest tourism growth during this period took place in the East Asia and Pacific (EAP) region, followed by South Asia. The opening of China for foreign tourism in the 1980s was a major contributory fac-
Another important development in 2012 was the emergence of China as the world’s largest producer of outbound travel, beating both the USA and Germany, which hitherto dominated the world tourism scene. The volume of foreign trips by the Chinese increased from 10 million in 2000 to 83 million in 2012 and their expenditure abroad amounted to US $ 102 billion in 2012
In 2012, Sri Lanka recorded slightly over one million (1.006 million) tourist arrivals in its 46-year history of tourism development on an organised basis, beginning from 1966. Thus, Sri Lanka emerged as a Million Tourist Destination, which was indeed an important milestone in its rather long and chequered history
tor for this development. In 2012, the EAP region received 21.2 percent of the world tourist arrivals.
Another important development in 2012 was the emergence of China as the world’s largest producer of outbound travel, beating both the USA and Germany, which hitherto dominated the world tourism scene. The volume of foreign trips by the Chinese increased from 10 million in 2000 to 83 million in 2012 and their expenditure abroad amounted to US $ 102 billion in 2012. Thus, both in terms of the volume of trips and the amount spent abroad, China emerged as the largest generator of foreign travel in 2012. It is estimated that China will generate over 100 million foreign trips by 2020.
The largest beneficiaries of this explosion in Chinese travel were the countries in the EAP regions, namely Japan, South Korea, Malaysia, Thailand and Singapore, each accounting for more than one million Chinese tourists in 2012.
The numbers received by the South Asian destinations were relatively small - India around 125,000, Maldives 120,000 and Sri Lanka only 20,000. The reasons attributed to this rapid growth of Chinese outbound travel were the steady rise in household incomes leading to widespread increase in disposable income, increase in urbanization leading to continuing expansion of the middle class, relaxation of travel restrictions and the appreciating Chinese currency.
What is distressing to note is the failure of Sri Lanka to capitalize on this development, despite the growing volume of Chinese investment in the country and the friendly relations that existed between the two countries for several decades.
Rapid growth in arrivals
Sri Lanka was able to reach the two important milestones: Rapid growth in arrivals and changes in market structure (and join the million and billion clubs) because of the dawn of peace in May 2009 with the elimination of LTTE terrorism and re-establishment of security in all parts of the country, including North and East, for all tourist activities round the year. Table 1 gives the relevant statistics showing the rapid growth experienced since the dawn of peace and the changes in the market structure.
The unprecedented increase in tourist arrivals experienced both in relative and absolute terms, since the restoration of peace in 2009, can be seen from Table 1. Thus, 2010 recorded 46.1 percent increase in relative terms and 206,586 in absolute terms, 2011 - 30.8 percent in relative terms and 201,499 in absolute terms and 2012 - 17.5 percent in relative terms and 149,630 in absolute terms. The years 2010 and 2011 demonstrate the pent-up demand while 2012 saw a return to more normal path of growth, given the availability of tourism resources, both physical and human. It was possible to meet the pent-up demand during the 2010-2011 period because of the availability of a heavily under-utilized tourism plant.
All market areas recorded significant growths during this period. However, the predominance of Western Europe, which accounted for nearly two-thirds of the total traffic in the past several decades, has dwindled over the years to a little over one thirds (37 percent) in 2012. Correspondingly, the share of the Asian regions (both South and East), which stood at around one fifth of the total traffic in the past, has increase to the same level as Western Europe in 2012. The Middle-East and East-Asia have emerged as the fastest growing regions in the recent past, more than trebling their traffic in 2012. The traditional markets of North America and Australasia have been able to retain their shares of the total traffic during this high growth period.
Impact on accommodation industry
As a result of this unprecedented growth, there was a boom in the accommodation industry, both by way of occupancy and total business turnover. Table 2 gives the relevant statistics showing this development
Registered guestroom capacity increase during this period was very minimal. In RTHs, it increased by around 700, while the increase in RSTAUs was higher at around 1300. This, coupled with the increased flow of tourists, boosted the overall annual room occupancy rate in RTHs to over 70 percent consecutively for three years from 2010 to 2012. There was a similar increase in occupancy of RSTAUs during the same period. Given the seasonality of tourist arrivals and the relatively longer average stay (10 nights) this should be considered a remarkable achievement.
Further, during the last two years, there has been a significant shift in the number of tourist nights spent in RTHs to RSTAUs and also to the informal unregistered accommodation establishments. Consequently, the FGN spent in RTHs remained virtually stagnant, resulting in a drop in occupancy rate from 77.1 percent in 2011 to 71.2 percent in 2012, although it was slightly higher than that recorded in the previous year - 70.1. This may have been due to the slow growth of room capacity in RTHs and the escalation of room prices charged by them, particularly after their renovations and refurbishment programmes. There was a near four-fold increase in the tourist nights spent in the unregistered informal accommodation establishments, from 702,000 in 2008 to 1.6 million in 2012.
The SLTDA accommodation statistics do not portray any tourism activity taking place in the Northern region, although it is common knowledge that there was a large scale movement of tourists, both local and foreign, to this region since the restoration of peace in 2009. Also, a large number of different types of accommodation establishments have come up since that year to cater to this growing travel demand to the region. Lack of such data in the SLTDA Annual Statistical Reports is a serious gap which needs to be filled to give a true picture of the tourism developments that are taking place in the country as a result of peace and security in the country.
Domestic tourism
It is also common knowledge that there has been an upsurge in domestic tourist travel to all parts of the country, particularly to the Eastern and Northern Provinces, since the restoration of peace. Such domestic tourist travel not only creates economic impacts in the receiving areas but also provides viable occupancy for registered tourist accommodation. It is seen from Table 2 that between 20-25 percent of occupancy in RTHs and RSTAUs is provided by the affluent domestic tourist travellers.
In 2012, the total number of domestic tourist nights spent in registered tourist accommodation establishments amounted to 2.14 million. If it is assumed that their average stay in such accommodation is around two nights, the total number of domestic travellers in 2012 works out to over one million, which is around one-fifth (20 percent) of the total population of the country. If we consider the numbers who would have used other forms of accommodation, the volume could be very staggering.
Despite the growing importance of such domestic tourist travel, neither the SLTDA nor the Department of Census and Statistics (DC&S) provides any statistical information on this segment of travel, at least periodi- cally. In 1970s, the CTB, predecessor of the SLTDA, had conducted an islandwide survey on domestic tourist travel by tagging a few questions to the periodic household surveys conducted by the DC&S, which had provided very useful information of the volume and pattern of domestic tourist travel. Unfortunately, this had not been repeated since then, although most countries conduct such surveys periodically, if not regularly, particularly for the purpose of compiling Tourism Satellite Accounts recommended by the UNWTO, in order to measure the economic significance of all forms of travel - inbound, outbound and domestic.
This area of information need should also receive the attention of the SLTDA in order to provide a comprehensive system of tourism statistics.
Outbound travel by Lankans
The restoration of peace in the country also had a significant impact on the volume of foreign travel by Sri Lankans, both for employment and for touristic purposes. Table 3 gives the relevant statistics.
Table 3 shows that the number of Sri Lankans travelling abroad has increased by 31 percent during the past four years. A significant number of such travel is for employment purposes, while others travel for touristic purposes. Judging by the foreign travel packages offered by the registered travel agencies in Sri Lanka, it can be assumed that outbound tourist travel by Sri Lankans is increasing faster than Sri Lankans travelling for employment purposes.
According to statistics compiled by the Sri Lanka Bureau of Foreign Employment (SLBFE) and published in the Central Bank Annual Reports, the number of Sri Lankan departures for foreign employment in 2012 amounted to 279,482, as compared to 262,961 and 267,507, respectively in the two previous years. Even if we assume that the numbers of repeat travellers for employment purposes were the same as the number of first timers, the volume of foreign travel for employment purposes would not be anything more than half a million. The rest amounting to more than three-quarter million could be travel for tourist purposes.
The CTB, predecessor of the SLTDA, at one stage used to analyse the emigration departure cards and publish Sri Lankan departure statistics classified by areas of origin, purpose of travel, final destination, etc. and publish them in the ASRs. This practice had been abandoned at a later stage. However, they are a vital component in the Tourism Satellite Accounts recommended by the UNWTO for measurement of economic significance of tourism. This is another gap in existing tourism statistics which should receive the attention of the SLTDA. (H.M.S. Samaranayake was formerly Sri Lanka Tourist Board Director General (19821988), Chief of Asia and Pacific Section of UNWTO Secretariat in Madrid (1988-1990), Research
and Planning Specialist of EU-Funded Tourism Project in South Pacific (1990-1993) and Sri Lanka Tourist Board Chairman
(1994-2000)