Developing tourism in Sri Lanka and challenges

Lionel WIJESIRI

Tourism industry participants, both in Sri Lanka and abroad, agree that there is a number of reasons why the Government should now begin to think out of the box about the tourism sector and prepare a strategic plan for the next ten years. Most important of the reasons is our country’s unique and abundant natural resources and the hospitality skills of our people. Some of them also believe that there should be a change in our brand projection.

In the promotion of tourism internationally, it is suggested Sri Lanka ideally should be represented as a rural holiday destination. This concept makes sense. It is a fact that in coming to Sri Lanka, visitors are motivated by the perception of beautiful virgin scenery, opportunities for sightseeing, and relaxed pace of life. It is necessary therefore to take account of the global trends in tourism, which may impact on the sector in Sri Lanka, and especially on tourism flows to rural areas.

In the coming decades there will be stronger demand for more customized products and services, as well as greater emphasis on value for money, personal fulfillment, authenticity and travel convenience.

The Government should, therefore, ensure that those closer linkages exist between tourism policy and other policy areas such as arts and culture.

Tourism in Sri Lanka

Organized tourism was institutionalized in Sri Lanka in 1996 and since then we have been experiencing a reasonable average growth. In the years of 2007 and 2008 there has been a decline in arrivals. In 2007, it was 494,000 and in 2008 it plummeted down to 438,400. The attributing reasons were the internal war against tigers and the global economic slump. Last year, it has stabilized itself at 439,000.

However, tourist arrivals in the last few months have seen a steady increase. For example, in January 2010, the arrivals reached 50,000, which is 32 per cent increase against the same period in 2009. These are good signs and we could look forward for a brighter future.

Sri Lankan tourism is a complex and diverse sector of economic activity incorporating many players across the public and private arena. That is why we need to think out of the box and work out a long-term plan which would provide a consistent framework within which the different parts of the industry could operate, to create a development dynamic that is greater than the sum of the individual parts.

Key issues

Against the current background, it is possible to identify a number of issues relating to the development of tourism in Sri Lanka.

First, there is an urgent need for a clear, market driven tourism strategy that directs the future marketing and development of key tourism attractions towards greater diversification and market expansion. Such a strategy may imply substantial government investment (e.g. road development and upgrading, airstrip improvements, provision of accommodation etc.) to make tourism areas and attractions more accessible and appealing to a wider range of potential tourist segments. By effectively planning, in accordance with market requirements - a substantial spectrum of visitors could be attracted and satisfied.

The existing approach is primarily supply driven and does not give due recognition to demand trends, market scope and variations of various market segments. Such a market-oriented approach is particularly relevant in view of recent global events that have led to a slowdown in global travel and increased competition among destinations.

Issues for tourism industry

The first of these issues is the need to define clearly the relative roles of the private local and foreign tourism partners in development decisions. The key issue for all concerned is to recognize that the development decisions made by them do have wider economic consequences for Sri Lanka. It is therefore imperative that investors recognize the implications of their actions in the overall interest of the long-run economic sustainability of the tourism sector.

The second major challenge is the need to develop human resources, particularly indigenous personnel, both for reasons of delivering quality services for tourists, as well as enhancing general skills of the local workforce. Achieving these broad objectives will potentially encourage utilization of local suppliers and thus enhance their productivity. In this sense, the spin-off effects are obvious: for example, foreign exchange will be retained locally and further income would be earned.

Thirdly, there are problems facing the local tourism industries in Sri Lanka that are characterized by a large number of small tourism enterprises. Although they serve useful functions in tourism (e.g. the development of linkages, providing personal service, etc), but for most of them, life is a daily struggle, with many of them operating at the margin of survival. They also lack the requisite experience to run tourism business along modem management principles. Even the nature of tourism demand renders them uncompetitive as they are unable to capitalize on the advantages that accrue from the economies of scale. The real challenge is for them to develop marketing strategies that would enable them to overcome some of these difficulties and thereby sell their products. Again, their limited resource base makes this objective hard to achieve.

Issues for Government

The traditional role of government is to formulate policy for the tourism sector. The focus should now be changed to suit today’s market conditions. The challenge for the Government is to formulate tourism sector policies that best reflect the new thinking.

Some important areas need policy re-orientation. This could be done with the consultation with local communities in the planning process and forging partnership with the private sector. The policy issue needs to be linked to devising viable and sensible options for financing tourism infrastructure. Another aspect of policy re-focusing is the entrepreneurial development initiatives. In essence, the policy should reflect identifying ways in which the benefits from tourism activity can be spread more evenly throughout the society.

Policy considerations

The Government should identify all elements that are relevant to the long-term sustainable development of tourism. The development of the sector needs to be supported by large inflows of foreign resources (e.g. financial, personnel).

This brings us to an important point, namely, that tourism development cannot be separated from other facets of economy, society and politic. Merely creating national and regional institutions or planning bodies responsible for tourism is hollow in the absence of the political mandate and adequate resources to do their jobs. Here lies much of the difficulties with developing tourism in Sri Lanka-resulting from ineffectual policies. This holds the key to future advances in tourism development in the region.

In the same way that political support and adequate resourcing hold the key to Sri Lanka’s future tourism development, so too is the need to educate the people. This can be done in a variety of ways: by creating in them an awareness of the benefits of tourism, by allowing them access to entrepreneurial opportunities offered by tourism, permitting women a role in the industry, and perhaps finally giving them a sense of ownership in the sector.

Sri Lankan tourism policy strategies should aim to redress these deficiencies. It then means that the existence of credible political, commitment on the part of the Government is a sine qua non to the realization of such strategies.