Tourism and development

Since the end of the separatist conflict, the number of tourists arriving in the island has increased exponentially. In fact, even the rate of increase appears to be increasing slightly

According to Tourist Board statistics, tourist arrivals for the main season (November to April) in 2009-10 were 37 percent greater than the previous year; while the figure for 2010-11 was 45 percent higher than that. Monthly tourist arrivals reached an all-time peak last December, crossing the 80,000 threshold for the first time.

The Tourist Board expects 2.5 million tourists by 2016, up from 650,000 in 2010. This requires an annual growth rate of 25 percent which, at current trends, is easily achievable - for a variety of reasons.

One major, if paradoxical, factor is that 26 years of mayhem have given Sri Lanka an unprecedented publicity advantage. There is a saying in the advertising trade that there is no such thing as bad publicity, as long as they spell the name right.

Comprehensive holiday package

Secondly this island offers a comprehensive holiday package within a small area, a variety of climates, sun, sea and sand plus ancient culture, wildlife and breath-taking scenery. There is no other place in the world that has Sri Lanka's unique combination in such a compact form.

Tourists in Sri Lanka. File photo

Thirdly, Sri Lanka is, in comparison to other destinations, cheap. It compares favourably with Thailand, which is the main target in South and South-East Asia for economy-seeking tourists from cooler climes.

Fourthly, once the new Mattala International Airport in Hambantota is commissioned, it will allow the handling of Airbus A-380 aeroplanes. These Super Jumbo aircraft are currently used mainly for the upper end of the market, but the models which maximise economy-class seating will provide unprecedentedly inexpensive travel opportunities.

And of course, the start of ferry operations between Tuticorin and Colombo can be expected to slash the cost of travel between India and Sri Lanka. It is likely that the authorities' expectation of 100,000 passengers annually will be exceeded quite considerably.

Foreign travel agents

Nay-sayers point out that Sri Lanka does not have the attractions of a Thailand or a Singapore, the shopping, the street-food or the entertainment - not to mention the less savoury delights. However, this ignores the fact that visitors to this island are from a different segment and are looking for different things.

So far, so good. Sri Lanka looks set to become South Asia's prime holiday destination. However, things are not as hunky dory as they may seem.

Last December, several foreign travel agents found that they could not get enough hotel room-nights for their customers who wanted to holiday in Sri Lanka. In other words, there was a shortage of hotel rooms.

At present, the 'graded' hotel sector has about 15,000 rooms, while there are about 6,000 rooms in supplementary establishments. The government says that a total of 45,000 graded hotel rooms will be required by 2016.

In other words, the country needs an additional 30,000 hotel rooms, and will have to build at the rate of 3,000 to 7,500 per year, progressively (or 40-100 average-sized hotels). In addition to this, nearly 11,000 rooms need to be refurbished or upgraded immediately.

South-West coast

Deputy Economic Development Minister Lakshman Yapa Abeywardena said last week that the tourism sector needed an injection of US $ five billion of foreign direct investment by 2016. However, in the past few years, the actual annual FDI has only been about US $ 200 million.

The government hopes to solve the problem related to unavailability of suitable lands by relocating a part of the traffic from the South-West coast (which accounts for 70 percent of guest-nights) to Kalpitiya in the North-West.

This coastal area is almost devoid of tourist accommodation and provides an almost all-year-round capability.

Experts from the tourist sector have pointed out that the process of constructing a hotel takes up to two years, so the room target might be unfeasible.

They suggest that the additional room requirement could be cut down to a more manageable 13,000 if the focus moves away from the seaside to entertainment, conventions and special interests and thereby reducing the average stay from 10 to 6 days.

The principal problem with this solution is that it will require a rebranding of Sri Lanka from a Bali to a Las Vegas. This would be possible in the short space of time available if we had the huge resources that would be necessary.

The experts do admit that the development of the East Coast, which at present only accounts for a miniscule proportion of the total room stock, will ease the burden somewhat. However, at present two thirds of our tourists come during the main season, around the time of the North-East monsoon.

Unfortunately, the experts tend to ignore a vital resource that we have: our people. The general population only benefits from tourism if they are employed in the sector, or as a spin-off from increased spending.

Tsunami-affected areas

The government should turn to the 'supplementary' or 'ungraded' tourist sector, providing householder and small entrepreneurs incentives to convert or build small guest-houses.

This sector does not require the huge capital expenditure required in graded hotels. Furthermore, there is potentially a huge stock of accommodation available in the tsunami-affected areas, as the inhabitants go inland in search of greater security.

It should be pointed out that small inns, Bed & Breakfasts and pensions cater to a significant proportion of the millions of tourists in Europe.

There is no reason why this could not happen here.

The formal tourist sector dislikes low-spenders and youthful hitch-hikers - the 'Lonely Planet' crowd. They do not spend heavily on hotel rooms or on eating or drinking at more expensive rates. Nevertheless, they form a considerable portion of visitors to this country.

The informal sector can take care of such visitors, with as high a return on investment as with larger hotels. Furthermore, it tends to increase the distribution of income from tourism among ordinary people more than the graded hotel sector.