Top hotelier pleads for faster, take-off in delayed nation branding campaign
Sri Lanka’s leading hotelier has lamented the absence of a “coherent marketing and promotional campaign” attributing this to the country’s inability to attract high spending travellers.
“As I have continued to do for the past few years, I hope and pray that a marketing and promotional campaign will be launched in the upcoming financial year, leading to a more suitable mix of travellers and an even playing field for those of us in the formal sector,” Hiran Cooray, Chairman of Jetwing Hotels and Jetwing Symphony ( hotels) has said in the latter’s annual 2017/18 annual report.
His concern is a common issue raised by many hoteliers; that despite rising tourist arrivals, the increase is feeding only into the informal sector and hurting established and organised hotels and resorts.
“Since the end of the conflict in 2009, tourist arrivals to Sri Lanka increased at a staggering rate year on year. Statistics show that arrivals continued to increase this year as well, although we see a drop in momentum when compared to previous years. Sri Lanka, as a brand, has failed to be globally recognized as a luxury destination. Due to the lack of a coherent marketing and promotional campaign, our country is unable to attract the required number of high- spending travellers to fill the perpetually increasing number of rooms,” Mr. Cooray said in the Jetwing Symphony report. This company under the Jetwing Group is listed in the Colombo Stock Exchange.
Mr. Cooray, one of the most outspoken and respected leaders in the tourism industry here and abroad leading a company that his father Herbert founded, has reflected at length on the dilemma of the established players.
He said budget travellers have made up a majority of the arrivals mainly due to Sri Lanka being marketed by bloggers and other social media influencers who cater to the younger travellers.
“This gap between the stagnant demand for luxury accommodation and the increasing supply of rooms, created an unprecedented disruption in the industry, in the form of the unregulated or informal sector. Many analysts believe that over 50 per cent of the travellers arriving in Sri Lanka stay at these unregulated establishments, while the regulated hotels and other accommodation providers battle for the remaining travellers. In my opinion, budget travellers are a crucial component of any destination’s market mix, however the problem we have is the discrepancy in the ratios. Ideally, a destination should cater to about 20 per cent budget travellers and 80 per cent high-spending travellers,” he asserts.
Sri Lanka’s long delayed destination marketing campaign is yet to get off the ground, tied down by bureaucracy, tender ramifications and a tedious process. The only campaign that has begun is one on CNN, which is not what the industry wanted but eventually supported the move since the main digital and across-all-media platforms marketing campaigns were being delayed, analysts said.
Mr. Cooray said that Sri Lanka has a great opportunity to be positioned as a high-end eco-luxury destination, where more emphasis should be put on earnings per traveller, rather than the number of heads entering the country. “We should not miss this golden opportunity to position Sri Lanka in the right path, so that future generations of Sri Lankans and travellers to Sri Lanka can benefit and enjoy our wonder of Asia,” he said.
He also points out the need for Sri Lankans to be “proud of our motherland and speak with confidence in international forums if we are to attract investors both big and small.”
He said: “At many forums, I have heard potential investors complain that we Sri Lankans are always negative when projecting the current situation and future prospects of the industry. Yes, we may not be in an ideal situation, but we still have an abundance of positive messages that can be shared with the global community. As long as we focus our attention towards minimising and subsequently eliminating our shortcomings, while propagating our good practices, I am confident that Sri Lanka will soon become a leading destination attracting a continuous flow of high-spending travellers and investors.”
On the performance of the company, which floated an Initial Public Offering in December 2017 to raise funds from the public, he said that “it's reassuring to note that the company’s performance was in line with the forecasted loss after tax of Rs. 349 million presented in the IPO prospectus.”
He assured that despite the “seemingly high negative figure, your company is making operating profits and will soon benefit from the reduced financial costs, due to the infusion of equity from a portion of the IPO funds (remainder of the funds are reserved for the Kandy development).”
He said the new properties will be better positioned in the market over the next few months with better results expected.
Jetwing Yala and Jetwing Tented Villas are the group’s first operational properties. Combined, the company’s performance shows positive growth in revenue, operating profits, and profit after tax (PAT), among other financial indicators.
The group’s second operational property, Jetwing Kaduruketha has showed positive growth in all financial indicators, the report said, adding that the change is mainly due to an increased ARR (Average Room Rates) and occupancy which was achieved through an elevated positioning of the property.
“Along with an independent marketing campaign for Wellawaya, we are also investing in positioning the hotel at exclusive travel fairs and across multiple media platforms. I am confident that the property will show better results in the upcoming year, with a focus on substantial increases in the ARR,” the chairman’s report said.
Jetwing Lake and Jetwing Colombo Seven completed their first full year of operations. As expected, both properties showed immense growth in revenue, since last year’s figures accounted only for a few months of operations. “Unfortunately, both destinations are currently facing severe pricing pressure due to an oversupply of rooms and poor competitive strategies in the industry; therefore, ARR is expected to remain constant or grow marginally in the upcoming financial year,” he has said.