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Tue, 28 Nov 2023 Today's Paper
Weaker rupee to lead swift tourism industry recovery
13 December 2022 05:37 am - 13 - {{hitsCtrl.values.hits}}
A group of tourists from a recently arrived cruise ship exploring Colombo
PIC BY PRADEEP PATHIRANA
- Weaker rupee has better positioned SL as a low-cost tourist destination- CT CLSA
- Tourist arrivals projected to surpass pre-crisis levels in 2024
- This year’s tourism earnings expected at US $ 1.3bn, US $ 3.5bn in 2023 and US $ 4.6bn in 2024
- Lifting of outbound travel restrictions in China to contribute significantly to tourism demand in long term
Driven by the country’s growing appeal as a low-cost tourist destination, following the steep depreciation of the rupee, Sri Lanka’s tourism industry is expected to make a swift and steady recovery in this winter season, with tourist arrivals surpassing pre-crisis levels in 2024.
“Considering the near-term arrival growth, a swift recovery in the tourism industry operations is expected during the winter season (from December 2022), as the steep currency depreciation has better positioned Sri Lanka as a low-cost tourist destination, respectively,” CT CLSA Securities said in its latest research report on the country’s tourism industry.
“Also, we believe that a steady recovery can be sustained over the course of 2023E and 2024E, which would support the business segment to remain consistently profitable as seen before 2019,” it added.
Accordingly, the projected tourist arrivals are expected to double to 0.7 million arrivals this year and to 1.8 million arrivals next year while reaching the pre-crisis level of 2.4 million arrivals in 2024.
Correspondingly, the leading stockbroking firm projected the country’s tourism earnings to double to US $ 1.3 billion at the end of this year, with earnings to double to US $ 3.5 billion and US $ 4.6 billion in 2023 and 2024, respectively.
It highlighted that the recent depreciation of the rupee is enabling the country to attract tourists from new source markets along with increased numbers from the existing ones while the country continues to remain attractive as a tourist destination, given the unique and distinctive set of offerings.
With the easing of social unrest and lifting of travel advisories by the key source markets, a moderate improvement in tourist arrivals was witnessed in the last few months. This was further fuelled by the resumption of operations to Sri Lanka by major airlines such as Aeroflot, Azur Air and Air France. Further, CT CLSA expects the anticipated lifting of outbound travel restrictions in China to contribute significantly to tourism demand in the long term. Prior to the pandemic, China was among the top three source markets for Sri Lanka tourism.
According to the Sri Lanka Tourism Development Authority (SLTDA), the tourist arrivals reached 644,186, as of December 7. At the same time, tourism earnings surpassed the US $ 1 billion mark for the first time by the end of November since 2019.
Meanwhile, the annual room occupancy levels are estimated to have reached over 30 percent this year, after falling below 20 percent in the past two years. Despite the adverse events, the average duration of stay of tourists reached 15 days (nights) last year, from 10 days in 2019. Similarly, the daily receipts from individual tourists have grown at 10-year CAGR of 6 percent during the 2011-2021 period to US $ 173 in 2021.
As at end-2021, Sri Lanka had a 47,337 official listed room inventory while US $ 3.9 billion worth of hospitality sector projects secured the SLTDA’s approval.
In 2018, Sri Lanka’s tourist arrivals and earnings peaked to 2.3 million and US $ 4.4 billion, respectively, before the sector was hit by multiple crises.
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Comments - 13
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Ram Tuesday, 13 December 2022 07:15 AM
Weaker Rupee is likely to attract tourists. But lack of facilities and some imported items that tourists need will spread the word against. Good things no cheap, cheap things no good
AJ Tuesday, 13 December 2022 07:28 AM
arrival numbers will be high with cruises, but earnings wont corrospond to that, because cruise is a fully paid/all inclusive package so cruise passengers will always go back to the ship for Food and beverages and accommodation. we need to focus on mainstream tourism before we can cater to cruise passengers for incremental revenue
Chris Tuesday, 13 December 2022 07:56 AM
No plan ministry, only expecting things to happen
Inshi Tuesday, 13 December 2022 07:56 AM
The tourists will certainly be surprised that a beautiful country such as ours, blessed with everything so natural and beautiful has been lowered to a cheap country. The fault lies with the poor rulers for this predicament. Rise and shine Sri Lanka!
Adwani Tuesday, 13 December 2022 08:04 AM
Please make necessary arrangements to ensure that all Tourists are provided the required protection, as there are hooligans who are trying to destroy the image of Sri Lanka and the Police must not be greedy for a cup of Kassippu and join with these thugs to spoil the hard built image.
Reformist Tuesday, 13 December 2022 08:06 AM
Not when hotel fees and other things on the internet are in dollars. This will only benefit tourists if the charges are expressed in Rupees. They are not. Even in AirBNB sites, charges are expressed in dollars.
Jayantha Tuesday, 13 December 2022 08:59 AM
Need to improve existing infrastructure facilities. Otherwise we will have only one time visitors in future. These things nees to be improved asap. Improve wash room and transport facilities at airport. Stop duty free staff acting like at fish market. Improve washroom facilities at all major bus stands .
Bob Léponge Tuesday, 13 December 2022 09:19 AM
To run a small hotel in Sri Lanka, we can tell you that this is the first time in ten years that we have to date, 12/13/2022, no reservations for the 2022/2023 season. While we are always full from December 12th to March 30th every year. Let's hope that the year 2023/2024 will keep its promises. In question for us: the sharp increase in plane tickets and the price of tourist visas. Ex: 2 months in Sri Lanka visa: $100. 3 months = $250...
Iwazaru Tuesday, 13 December 2022 10:05 AM
This is not true. What happened in Sri Lanka is the rupee depreciated and also the inflation is around 90%. When that happens the price of food and services have gone up 3 to 5 fold. As such there is no advantage of the depreciation of the rupee to a foreign traveller. Food price in Sri Lanka is similar to Singapore (with has a strong current) and more expensive compared to India, Thailand, Indonesia, Philippines and Nepal.
Seqi Tuesday, 13 December 2022 10:05 AM
Back to the future.
KD Tuesday, 13 December 2022 10:33 AM
Low cost? Frankly Sri Lankan hotels charge too much. Given the standards, 3 star hotels should charge $10/night, 4 Star should be $50/night and 5 Star should be $75/night. Completely overpriced. Change prices, tourists will flock. Occupancy rate will skyrocket.
Reformist Tuesday, 13 December 2022 11:51 AM
You are spot on! SL is so expensive and yet those gvt idiots don't understand that. Why they increased visa fees is beyond comprehension. Fort Railway station is like a cattle shed, no proper toilets anywhere in the country for use by anyone, hygiene is non existent. Is this the paradise they come to?
Sam Tuesday, 13 December 2022 11:02 AM
Hotels charge USD price. Depreciation on rupee 80%, food increase 80% Depreciation on rupee 80% fuel increase 300% Visa fee in dollars increase 200% Where do they save money? Flights are 60% more than they were in USD 2yrs ago. When you arrive at the airport everyone from border control and baggage porters are asking for dollars or jobs. When you get in a Taxi they will rip you off, especially if you get caught by one of the many touts out the front of the airport. When you arrive at the hotel it is empty, the atmosphere and catering is therefore poor. Attraction prices are hiked 1000% for tourists and there are so many touts about the places trying to rip you off its better not to go. Try to fix these things rather than just saying the rupee has depreciated and Sri Lanka is cheap. Truth be told it was a whole lot better and cheaper prior to the 'troubles'.
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