Industry expects modest growth but no boom expectations
by Cheranka Mendis
The tourism industry is looking at a 10-15% increase during the coming winter season although there will be no sell-out as earlier expected, according to industry experts. The season, which usually amounts to the highest number of arrivals each year, was initially expected to bring in more than the previous year, but the industry cannot expect any boom during the period.
The start-off to the booking and reservations are moving at a slower pace than initially anticipated, industry stakeholders said.
City Hotels Association Chairman M. Shanthikumar told the Daily FT that a 10%-15% increase can be expected during the season even though a 100% sell out is farfetched.
“Sri Lanka cannot experience a sell-out this year. There will however be a growth,” Shanthikumar said. “Bookings have already started even though it is at a slower pace than the expected level.”
Tourist Hotels Association President Anura Lokuhetty concurred, stating that according to his research there has been no dramatic boom from the major markets such as Germany and UK.
Lokuhetty expressed that conversations with various operators had proven that there have been no major shifts or a marked difference from last year’s reservation mode. However, it is premature to comment fully as Sri Lanka is still viewed as a last minute destination by many, he said.
On the other hand, the good news is that the majority of the winter season travellers, those from the Western Europe countries, make the largest contribution to the country as they are considered high spending tourists on long stay holidays.
“They are the largest contributor to Sri Lanka tourism,” Lokuhetty said. “On average these tourists stay for 14 days and spend approximately US$ 100-150 daily.”
Taking into consideration the market performance over the last few months, he noted that UK had performed similar to last year irrespective of the recession and other issues.
“Sweden again is a very important market to Sri Lanka. We saw the highest increase in arrivals during the first eight months of the year, even though the number still remains small. Germany is yet another important outbound market which has shown significant growth during the period.”
The country should now focus on marketing and promotional activities, which have been lacking during the past few months, he said.
“We must at all times remember that we are competing against giants in the region such as China, Singapore and Malaysia. We must look at increasing the number of high spending visitors to the country as this will be one way to attract investors into Sri Lanka as well.”
With the new direct flights starting to Moscow, arrivals from Russia are also expected to rise notably.
According to research, the incentive market plays an important role in the growing Maldivian market, which Sri Lanka should ideally look at tapping into. Middle Eastern, Chinese and Indian traffic should be focused on from a regional perspective, Lokuhetty said.
On pricing and rates which have at oftentimes been criticised, including by industry stakeholders, he expressed that the rates in place were not very high even though in comparison to other countries, at times some may be priced higher than the rest.
“Perhaps at times some might be higher than Malaysia and Thailand. However, we must factor in the reality that these countries receive 24 and 15 million tourists respectively each year. They can afford to offer lower rates and be competitive,” he said.
The current rates are satisfactory, Lokuhetty assured, noting that “the pricing is perfect”. He added: Hoteliers must increase in keeping with the product they offer; it is a subjective thing. I hope the industry is intelligent enough to understand that.”
Hoteliers usually maintain two rates for a year, he revealed: one for the summer and a slightly higher rate for winter. “The winter season will do well; not with a drastic boom, but better than last year.”