Rebuilding SL Tourism amidst the economic crisis


By Anjali Caldera

Though Sri Lanka Tourism declares 2022 as the ‘Visit Sri Lanka Year’ in line with the integrated five-year Global Communication Campaign (GCC), aiming to attract six million tourists and USD 10 billion revenue by 2025 despite the challenges faced due to Covid, Sri Lanka’s on-going economic crisis seems to further hit its tourism industry. The United Kingdom and Canada have issued travel advisories to their citizens to restrict visiting Sri Lanka; warning on the country’s current power failures, gas and food shortages and accelerating essential food prices. Besides the pandemic fear, the sudden spread of dengue in the island has put Sri Lanka into a quite desolated state.

The UK is Sri Lanka’s third biggest source of inbound tourists behind Russia and India. Tourism accounts for about five per cent of Sri Lanka’s Gross Domestic Product (GDP), with Britain, India and China being the main markets. Canada has also advised its citizens to keep supplies of food, water and fuel in hand in case of lengthy disruptions and to make sure to have sufficient supply of medicines in hand as they may not be available and monitor local media for the latest updates. Thus, it seems Sri Lanka is facing its all-time worst foreign exchange crisis after the Covid-19 pandemic hit the nation’s earnings from tourism and remittances.

As a measure to overcome the worse aspect of the pandemic and the economic crisis, the World Economic Situation and Prospects 2022 (WESP) Report, produced by the United Nations Department of Economic and Social Affairs (UN DESA), in partnership with several other UN organisations, calls for better targeted and coordinated policy and financial measures at national and international levels. As detailed in this report, national fiscal and monetary authorities need to carefully sequence, calibrate and coordinate their policies to avoid sudden disruptions. This requires the complete mobilisation of governments, international financial institutions, credit-rating agencies and others.

It seems the inefficiency in decision making of the Sri Lankan Government and not taking the required steps at the right time as mentioned on the WESP Report, have put the country in dire disruption.

Tourism towards gaining economy in Sri Lanka

The Investment Information and Credit Report Agency (ICRA) highlights that one of the most crucial factors for economic recovery in Sri Lanka, as well as globally, is the revival of tourism. Further analysing the sector’s role in economic recovery, the UN report notes that many destinations, in particular tourism-dependent countries, will need to diversify their tourism products throughout 2022 and beyond. The report also highlights how destinations could develop domestic and rural tourism to help local economies in rural and depressed areas to boost job creation and protect natural resources and cultural heritage, while at the same time empowering women, youth and indigenous people. 

Thus, it is understandable that driven by both public and private sectors, tourism is not only a source of foreign currency, but it has the potential to serve as a development ‘tool’ to strengthen supply chains, improve local firm productivity, creates one out of ten jobs and provide income for women and young people. Thereby, implementing doable policies and acts to regain tourism would provide a ‘sort of hope’ to Sri Lankan economy to increase its forex earnings.

Yet, events such as Raid Amazones; an adventure event which is currently taking place in Sri Lanka with 600 French athletes; the largest tourism event in the country since the Covid-19 pandemic, draws the attention over international tourists to rethink visiting Sri Lanka despite the on-going economic crisis in the country. Hence, the potential for the market growth is within the eye sight, yet the problem is, not putting forward the implementable policies for the industry.

Three steps for tourism to build better forward

An article published by the World Bank Managing Director of Development Policy and Partnerships, Mari Elka Pangestu on the World Bank Blog presents three clear steps for tourism to build better forward, discussed during the World Trade Organisation’s (WTO)  Aid for Trade Stocktaking event last year (2021).

Accordingly, first it is very much important to improve traveller confidence; second, understand and track new market trends and the drivers of demand; and third, commit to build more resilient and inclusive tourism sectors. 

1. Improving traveller confidence

Sri Lanka Tourism has a vital role to play in creating the trust and confidence among travellers despite the on-going crisis with fuel, gas, power and essential food items, making sure tourists are under vigilant care and do not face any of the above issues while on tour in the country.

2. Research on new market trends

As for the second step, learning from the best practices is quite effective, thus it is required to observe the tourism programmes conducted by  other competitors and new market trends and try to follow them and reinvent implementable theories and policies to the industry. 

At the event, Kenya’s Minister of Tourism and Wildlife Najib Balala shared how his government is working on diversifying conservation revenue; the important progress being made in public private partnerships in conservation, and engaging in wildlife bonds, to ensure their natural heritage is protected during tourism crises. Resilience comes through focusing on the environment, people and technology to prepare for climate change and crises. Mainstreaming risk management and investing all along the tourism value chain is Kenya’s approach.

Re-energising domestic tourism, systematically preparing people to be resilient, embracing inevitable changes, support to the tourism business by the Government are some of the measures taken by New Zealand. India also focused on purposeful research to rebuild tourism and also focused on virtual reality trips, sustainable travel certifications and eco-labelling. It says in Guyana, the Government, private sector and tourism communities worked together on four priorities as in, re-tooling the country’s tourism product, re-gaining the confidence of the tourism market, preparing for the new breed of traveller while also focusing on domestic tourism. On the face of Covid-19, North America Tourism focused on safety of travellers by reducing customer touch points by using robotics, automation and self-service kiosks and embraced Artificial Intelligence (AI) for tourism operations.

3. Inclusive tourism growth

As for the third step, following global sustainable goals with local community participation in the industry is an effective strategy. Thus, offering job opportunities; making them participate in tourism programmes etc. would create a source of income for the local communities. Hence, educating the general public, on why tourism is important for the country’s economic recovery should be one of the key strategies in the process of the resumption of Sri Lanka Tourism; thus the attitude of the locals will be aligned for support in tourism revival. 

Plight of Sri Lanka Tourism

In Sri Lanka Tourism, though industry experts and the Government bring out industry operating protocols, and public-private dialogue around recovery strategies, none seem to be implemented efficiently. Accordingly, there supposed to be establishing a system for regular monitoring, for integrated recovery and resilience building, an effective crisis management system, alternative tourism development plan, new tourism promotional strategies, most highlighted private–public–people partnership, development of human resources with equal opportunities.

International Conference on Hospitality and Tourism Management, founder and administrator of the Global Hospitality Forum Dr. Chandi Jayawardena, participating in a webinar on ‘Rebuilding Sri Lanka Tourism’ organised by the University of Colombo, stated that the most important thing is to look at the past, what is relevant today and decide on the future. He further emphasised on the fact, that there is no point in learning theories unless you can put them into action. ‘Knowledge should be practical, implementable, thus not to follow fancy theories which are written by people who never worked in the industry’, was his idea.

Considering future of tourism 

The future travel will definitely look different, so data and market intelligence will be vital.  Hence, it is quite recommended to work on consumer market research. An article published on the World Bank Blog with much research highlighted that near term travel will shift to drive to destinations, domestic and proximate travel, as well as strong growth in nature and adventure tourism, highlighting the increasing importance consumers are placing on sustainability. “Stimulus recovery programmes for tourism could focus on rebuilding tourism locations to be more sustainable, which would create jobs in the rebuilding as well as enhance its attraction.” 

Further, technology will continue to play a growing role in long stay tourism as more workers seek remote and telecommuting options. According to the World Economic Forum’s (WEF 2017) Digital Transformation Initiative (DTI), from 2016 to 2025, digitalisation in aviation, travel and tourism is expected to create up to USD 305 billion of value for the industry through increased profitability, migrate USD 100 billion of value from traditional players to new competitors, and generate benefits valued at USD 700 billion for customers and the wider society.

The World Tourism Organisation (UNWTO) has also highlighted that social media, cloud computing, big data, Internet of Things (IoT), mobility etc; these core- tech pillars have resulted in a tourism offer that is more attractive, efficient, inclusive, and economically, socially and environmentally sustainable than its predecessor. It has also facilitated innovation and rethinking of processes, with a view to tackling challenges such as seasonality and overcrowding and developing smarter destinations. The Organisation for Economic Co-operation and Development (OECD) declares that Millennials (born in the early-1980s to mid-1990s) and Generation Z (born in the late-1990s to early-2010s), who along with other emerging generations will comprise the bulk of domestic and international tourists by 2040 (OECD, 2018a). Thus it is necessary to study these trends and act accordingly.

However, the Covid-19 crisis has increased the number of digital nomads seeking opportunity to work from tourism destinations.  As vaccines are rolled out and offices reopen, Sri Lanka will need to keep a close eye on the durability of this market.  

The writer is a former Business Journalist attached to Ceylon Today, a Visiting Lecturer at University of Kelaniya, SLIIT, SLF, a freelance writer and a Sworn Translator. (BA and  MA in Linguistics at University of Kelaniya, and a Postgraduate in Tourism at University of Colombo).