Topic: Outlook for the Tourism Sector
Video Link – https://www.youtube.com/watch?v=mMnm0UbMasg
Speaker: Travis Gomez
Video length – 14:54 mins
0.30: How was the tourism sectors performance in 2016?
- Tourist arrivals close to 2.05 mn which was below government target
- This was partly due to extraordinary events during the year such as flooding as well as slowdown in arrivals from Middle Eastern markets towards the 2H of the year
- Nevertheless 2H2016 showed strong tourism growth of 12% YoY
1:30: More Recent performance
- A slowdown in arrivals was anticipated given the runway work taking place at the International airport
- As a result growth in arrivals Slowdown in 3% in 1Q2017
- But this was not as bad as was expected by hotel operators who expected a much greater slowdown
2:00 New developments in tourist arrivals
- Composition of tourist arrivals shifting from traditional markets such as German, France towards Asian Markets
- The Asian region accounts for 47% of tourist arrivals
- India and China are the top two source markets for tourism to Sri Lanka
- Shift in global spending power and the greater wiliness of tourists from China to travel further afield may account for this trend
4:00 Why are tourists spending less time in Colombo?
- Foreign guest nights in Sri Lanka is 10 nights which has been fairly stable for 5 years
- In contrast the foreign guest nights in Colombo is only 2.1 nights and has been slightly trending down over the same period
- One possible reason is there is less of a need to spend time in Colombo for transit purposes (ie: getting to and from the airport) with the opening up of expressways to other parts of the Island
- Another reason is that Colombo is not perceived as a tourist destination
- This maybe due to a lack of awareness and a lack of marketing on the experiences and unique landmarks that can be visited and experienced in Colombo
6:20 How do we attract the high end tourists?
- Tourism spending has grown from USD 89 per day 5-7 years ago to USD 160
- This will naturally increase further due to the shift in the tourism mix to regional markets where tourists from these regions have a higher propensity to spend on things such as shopping
- But In order to increase this even further, the focus should be on attracting more MICE tourists who typically have a higher spending power.
- To attract more MICE tourists the general attractiveness of Colombo must be increased
- In order to attract organizers of MICE events to pick Sri Lanka as a destination, there must be sufficient activities in Colombo to attract these tourists as they have limited time to spend in a country.
8:30 How to position Sri Lanka beyond a Sun & Sand destination?
- The preferences of tourists are now shifting towards experiential/ adventure tourism
- While the pristine beaches and natural beauty is a big draw for tourists, focusing exclusively on the resort aspect is not enough
- If we want to tourists to spend a longer time in the country and encourage repeat visitors, we need to package Sri Lanka as having a multitude of attractions
9:45 Do we have enough capacity to accommodate higher tourist arrivals?
- Don’t really see a problem on the supply side as many hotels and supplementary establishments are commencing operations
- In Colombo alone around 1000 new rooms are going to be added in the next two years
- It’s going to be a much more competitive environment as well with the entry of International hotel chains
- Local hotel operators in Colombo would have to pa attention to these developments carefully as City Hotels have typically been the best performing category of hotels due to their ability to attract both foreign and domestic visitors.
Source: Frontier Blog