TOURISM EARNINGS AND RESPONSIBILITY IN MARKETING THE COUNTRY
Is tourism a growing industry in Sri Lanka and why is this industry important and different from others?
Sri Lanka Tourism has been the fastest growing industry in the last 10 years & contributed to the economy USD 4.5 billion for the year 2018, being the second largest net foreign exchange earner. Unfortunately, due to the 21/4 terrorist attack in 2019 our tourism earnings declined to USD 3.5 billion. We are extremely concerned about this situation. Further due to the CoViD19 situation worldwide, things are turning to the worse with declining occupancies & arrivals.
The industry has created employment to over 500,000 individuals directly and indirectly and have supported many other industries including transporters, fisheries, vegetable growers, super markets, jeep safari drivers, tuk-tuks, telecommunication, food industry, handicrafts, gem & jewelery, and many more For example, many popular cities in the country are highly dependable on tourism such as Hikkaduwa, Galle, Unawatuna, Bentota, Beruwala, Tissamaharama, Ella, Mirissa, Negombo, Sigiriya, Polonnaruwa, Kandy, Passikudah etc.
This industry is the best to develop friendship and contacts among individuals and even governments. An ideal platform to showcase our pride and thereby build the brand Sri Lanka.
We have every opportunity to be the biggest contributor to foreign exchange earnings surpassing foreign remittances if the required marketing support is given by the government.
Being a private sector owned industry how could the government intervene to develop the industry and also to create employment?
The President & the government was able to quickly understand the values & the sensitiveness in our industry after the 21/4 attacks and they offered certain reliefs to sustain the businesses which the industry appreciates.
We are also very appreciative of the Moratorium and the working capital soft loans passed by the government to ensure that businesses are able to continue without hindrance.
Reducing VAT and 0% VAT for the tourism industry is very welcome. However, this has been passed only to the hotels and not to inbound tour operators. We are presently discussing this with the authorities and we are confident they will pass this to us as well appreciating the yeoman service the inbound tour operators have done to bring in tourists to the country.
VAT being an indirect tax is recoverable. However, when inbound tour operators make a price it includes hotels and other services. When hotels do not include VAT the inbound tour operator is charged VAT for the full amount. This 8% is not recoverable thereby having a considerable loss.
What is top priority?
I would consider marketing as the top priority for sustainability. We need a strategic approach positioning and branding our country to showcase our uniqueness. Unplanned advertising and other promotions will only create misunderstanding and give us returns on a very short –term and creates selling through price only. Whereas a proper strategic advertising and PR will build image and create demand. This will entice the tour operators, online tour operators, and other selling platforms to promote and advertise the true benefits of the country and cater to their demands. This would help to maintain healthy and reasonable pricing.
During the last 10 years our industry has tried to convince the regulators to execute a global marketing campaign without success.
What are your thoughts about promotions and what is the best solution?
To appoint an International Advertising & PR company who have offices in the 10 biggest markets for Sri Lanka. Same way synergize, synchronize, and give prominence to digital marketing.
The tourism industry needs a solid foundation. We all talk about tangible things around us including nice beaches, tea plantations, wild life and historical sites but none of them are branded as world’s best. However, it is important that we bundle up & synergize all our tangibles and actions to be in a unique position to place us in the world market to differentiate ourselves. All departments and line Ministries that are connected to Tourism must come together giving that unparalleled feeling about tourism.
This is why we need a strategic global marketing campaign and following are some of the benefits.
- Constantly reminding with attractive packages to make interest & decide on Sri Lanka & Change/Convert decisions in our favor over other countries
- Could create promotional material to inspire the target audience and thereby build brands.
- Create a larger target audience for independent travelers who pay more than the wholesaler thereby reducing aggressive pricing.
- Increase the interest to properly planned and packaged holidays against buying individual units from OTA’s.
- Better knowledge and information of the country, highlighting the special interests, proposing the best itineraries, presenting choices of accommodation, and other services such as guides, safaris, special excursions like whale-watching etc.
- You target high spenders. Develop new target groups of Luxury travelers, Wild life Enthusiastics, Adventure seekers.
- Interest and excitement in the market place will encourage tour operators to promote Sri Lanka against other countries.
- Advertising & P.R will drive demand for tour operators to be motivated to sell rather than pushing sales on price & limited options.
- Better rates will help increase occupancies in all categories rather than filling the hotels with aggressive 2-star pricing.
The role of the inbound tour operator and how do they play an important role in the tourism industry. What is their contribution and, expertise?
We are the first contact in the value chain and it is the responsibility of the members of Sri Lanka Association of Inbound Tour Operators (SLAITO) to promote and market Sri Lanka and to convince tour operators to feature tour programs where we offer options considering their likes, budgets, etc.
The following are the SLAITO members’ contribution in marketing Sri Lanka
- Genuine information of the country, it’s locations, few recommended itineraries with accommodation options, our opinion on places of interest, providing good guides, market information including competitor analysis etc for tour operators to make good decisions.
- Research and continuous personal sales meetings with all tour generating markets and convincing them to feature Sri Lanka and promote.
- Advise and develop programs that suit different markets and target audiences.
- Maintain international standards right throughout the tour including coordinating with hotels to ensure quality required by the tour operators are met.
- SLAITO members together spend over 1 billion a year to service tour operators abroad including their personal sales calls, attending trade fairs, sponsoring familiarization tours to tour & international journalists on behalf of the tour operator along with hotels, promotional material for tour operators etc
- Photos/pictures to tour operators and international newspapers/travel magazines
- Servicing tour operators on daily requests of special promotions, to promote against competitive countries.
Sri Lanka is a holiday destination and except in Colombo over 90% occupancies come from the leisure sector. The main contributors are tour operators selling planned programs, online tour operators selling accommodation units, and Sri Lankans holidaying. The tour operators promoting planned programs accounts between 65% -75% of the occupancies. On a tour of the country the foreign tour operator takes an itinerary mutually agreed and hotels recommended by the inbound tour operator. Hotels are not contacted direct unless it’s a beach resort as the tour includes other services.