Sri Lanka Tourism changes focus from arrivals to revenue

The Sri Lankan government appears to have moved away from targeting arrivals towards a revenue targeting model, the Tourism Strategic Plan 2017-2020 of the Ministry of Tourism Development and Christian Affairs indicated.

The plan’s main goals are for the industry to rake in US$ 7 billion in revenue in the year 2020, double that of 2016, and to induce visitors to spend an average US$ 210 daily by 2020, compared to US$ 168.2 in 2016, in addition to key targets in employment generation and female empowerment.
“This is definitely a positive development. If we’re going for a revenue target, we must position the country. We will have to give credit to the country’s beauty, culture and history,” Jetwing Group Chairman Hiran Cooray said.

An Australian expert, Andrew Fairley, who recently visited Sri Lanka and provided input on the plan, had insisted Sri Lanka should make such a switch into revenue targeting, based on intense research, which would tell Sri Lanka how to induce visitors to spend more in Sri Lanka. While the plan has addressed improvements in research done domestically to segment, target and position Sri Lanka as a tourism destination, demand-side research in foreign countries will be limited to purchasing international research publications and subscriptions.

The government has the option of utilizing Sri Lankan embassies in other countries to carry out research specific to Sri Lanka, if hiring market research companies are expensive at first. The plan exhaustively analyzes and gives time bound targets to improve on most of the major concerns expressed by a wide variety of stakeholders, including socio-economic and environmental sustainability, promotions, destination development, investment facilitation and private and public sector failures. Cooray said that he hopes the plan gets implemented properly.

“Implementation is a huge challenge. I hope and pray that this will be implemented,” he said. Sri Lanka has a track record of poor implementation of well structured plans. The strategic plan calls for reduced political interference and increased efficiency of bureaucrats who are currently politicized.
The government’s main tourism indicator hitherto had been the number of tourist arrivals, which the line minister John Amaratunga himself admitted had been driven by word of mouth in recent years. The government has not had a major promotional plan for years, except for ad-hoc efforts and routine trade show participation. A promotional campaign was halted by Amaratunga in late 2015 at the expressions of interest stage. A new campaign which was conceived last year has now been delayed by over one and a half years. The arrivals targets of 2 million and 2.2 million for the past two years had not been met, attracting 1.8 million and 2.05 million respectively.

After initially setting a 2.5 million target for this year, the target was lowered to 2.2 million, which too does not appear achievable this year, given the relatively low growth experienced year to date, compared to past years.

Some academics and industry experts were already concerned over the limits of Sri Lanka’s resources to sustainably cater to vastly higher visitation to the country. The government’s past target for 2020 had been 4.5 million tourists.

Others had pegged Sri Lanka’s arrivals for the year much lower. The Pacific Asia Travel Association had projected 3.7 million tourists to visit Sri Lanka by 2021.

Given the new plan’s 2020 targets of US$ 7 billion in receipts, and average daily spend per tourist of US$ 210, if an assumption is made for an average 11 days in duration of stay—a figure which is consistently increasing and was 10.2 days in 2016—Sri Lanka could reach the revenue target with just 3.03 million 
tourist arrivals.