From left: Sri Lanka Tourism Promotion Bureau Chairman Paddy Withana, Tourism Development, Land and Christian Affairs Minister John Amaratunga and Tourism Development, Land and Christian Affairs Ministry Secretary Janaka Sugathadasa
Pic by Nisal Baduge

By Chandeepa Wettasinghe
The country’s tourism authorities yesterday said they were extremely confident of posting probably the second best tourism performance figures of the past four decades despite escalating global safety concerns.

To reach the 2.2 million tourism arrival target, the arrivals for the next three months would have to increase by 691,595 tourists or 43.32 percent year-on-year (YoY).

“2.2 million is nothing now. We have already got one million five hundred and eight thousand who have come to Sri Lanka. This is the height of the season we’re coming to. In the next three to four months we can get the balance,” Tourism Development, Land and Christian Affairs Minister John Amaratunga said.

Speaking at a media briefing yesterday in response to a question raised by Mirror Business, he said that he had revised down his 2.5 million target because he had initially “aimed high as always” but that other problems could crop up, similar to the situations in the Maldives, Middle East and in the Far East.

The bureaucrats and politicians had thrown around various different arrival targets over the course of the year.

Two months ago, Tourism Development, Land and Christian Affairs Ministry Secretary Janaka Sugathadasa had said that there were some doubts about reaching the 2.2 million arrivals.

Tourist Hotels’ Association of Sri Lanka Chairman Hiran Cooray, speaking at a United Nations World Tourism Organisation event, had placed his projection at two million arrivals. 

Amaratunga noted that the government is expecting the arrival growth to come from all its current major markets and that Sri Lanka being a safe destination would also contribute heavily towards reaching the goals of 2016 as well as the targets up to 2020.

Sri Lanka Tourism Development Authority and Sri Lanka Tourism Promotion Bureau Chairman Paddy Withana said that some road shows conducted recently could also bear fruit.

“I’m looking specifically at the Scandinavian countries because we had road shows recently. We’re looking at the Australian market. We also did some road shows there recently,” he said.

He noted that there would be definite increases from Sri Lanka’s two largest source markets— India and China. This is despite growth from India coming to a standstill in September and the total arrival growth from China for the month slowing down to 3.6 percent YoY.

The only other instance when arrivals had exceeded the now projected growth threshold since the start of the 30-year civil war had been in 2010 with the peace dawned on the country.

In 2010, tourism arrivals grew 46.12 percent YoY but for the final quarter of the year grew 50.81 percent YoY.

So far in 2016, arrivals have grown by 14.6 percent YoY, helped by unexpected increases in arrivals in June and July.

A highly placed source in the government, on condition of anonymity, confirmed that this was mainly due to last-minute changes of travel plans to safer destinations following terror attacks at some of the most popular tourism destinations.

Several industry sources have projected arrivals to grow between 10-15 percent YoY for 2016. To reach the 2.2 million target arrivals should have grown by at least 22.2 percent for the year.
Growth rates of arrivals have been in decline from 26.7 percent in 2013 to 19.8 percent in 2014, down to 17.8 percent in 2015.

The industry is awaiting a long overdue marketing campaign. The Rs.800-million campaign whipped up by the current administration is expected to take off early next year. However, Withana noted the returns expected from the campaign have not been calculated yet.

Amaratunga said that he is expecting US $ 3.5 billion in foreign exchange receipts from tourism for 2016, up from US $ 2.5 billion in revenue earned so far this year. Foreign earnings from tourism in 2015 had been US $ 2.98 billion.

Some analysts theorize that it is more important to develop the quality of the tourism product in Sri Lanka instead of chasing after numbers, a policy which had been discontinued globally since the 1970s.

Final decision on minimum room rates in March

Which appears to be a reverse in his stance on the minimum hotel room rate in Colombo hotels, Tourism Development, Land and Christian Affairs Minister John Amaratunga yesterday said the decision on the matter will be taken coming March.

“We’re currently having a discussion with all the stakeholders. Some are saying to keep it. Some are saying to remove. 

Now some are saying to remove but after some time,” he said.

This appears to be a change in the minister’s stance from July, when the ministry had released a statement saying that the price control will be abolished in March 2017.

“The minimum room rates imposed on city hotels will be abolished with the end of the next winter season. Tourism Development, Lands and Christian Religious Affairs Minister John Amaratunga has decided to abolish the minimum room rate regime with effect from March 31, 2017,” the statement said.

It further said that Amaratunga had decided to abolish the minimum room rates following advice given to him by the Tourism Advisory Committee, which is chaired by Aitken Spence Group Chairman Harry Jayawardena.

Large companies such as John Keells Holdings PLC are calling for the abolishing of the rates, while the top management of hotels like Renuka City Hotel PLC, Ramada Hotel and the Colombo City Hotels’ Association are calling for the minimum rates to continue.

The Tourism Hotels’ Association of Sri Lanka is calling for the abolition of the room rates after a period of two years.

Sri Lanka Conventions Bureau Chairman Premaratne Cooray yesterday said that Sri Lanka could serve as a destination for one million India MICE tourists but noted that MICE markets are always seeking the lowest prices and three to four-star hotels.

He added that the Colombo hotels are only able to provide 5 percent of their accommodation for MICE tourists. 

John Keells is hoping to capitalise on MICE tourism with its upcoming Cinnamon Life project which has a 4,000-seat convention centre and is hoping to construct several more three-star hotels such as Cinnamon Red to fill the accommodation gap.

Meanwhile, Sugathadasa said that the government’s plan to build a 7,000-seat capacity convention centre has run into some land issues.