THUMBS UP FOR OUR RESPONSE
Q: How do you see the ‘new normal’ for business panning out?
A: Tourism, which was just recovering following the 2019 Easter Sunday Attacks, is one of the frontline industries that has been significantly affected by the COVID-19 outbreak. With multiple sources of income affected, the industry must drastically change in order to survive – at least until a vaccine is available in large supply. Unfortunately, while the ‘new normal’ might mean that several entities will run out of steam and cash, some steps can be taken to soften the blow.
The industry must begin to cater to the new emerging traveller. Sri Lanka, which has traditionally catered to tourists on package trips spanning an average of 10-plus days and included beach resorts with good F&B services, must now evolve to cater to a new type of traveller who prioritises ‘experiences’ above all. These travellers will want a touch-and-feel of the local community, local cuisine, Ayurveda and spirituality. As such, the industry will have to be creative in the services it offers.
In the short to medium term, the industry will need to cater to tourists from East Asian markets who haven’t been as adversely affected as the West. Several are ‘revenge travellers’ – people who are waiting to travel once this is all over; and Sri Lanka should reposition its marketing effort to maximise on this opportunity. Typically, these travellers expect a lot of experiences and photo opportunities over a shorter stay compared to Western travellers.
Marketing by the tourism authorities needs to adopt this when they reposition Sri Lanka as a destination. And the industry will have to retrain staff to cater to these changing needs.
Q: How do you view Sri Lanka’s COVID-19 response so far? What are the pros and cons?
A: The government’s strategy has been commendable so far. A combination of mobilising the military to support medical officers and decisive actions have led to Sri Lanka’s response appearing to be better than several developed economies. Granted, we have limited resources compared to other countries responding to the crisis; but our performance thus far has been a plus point.
However, the fallout from the lockdown will have a negative effect on the economy. Sri Lanka doesn’t have the extensive financial capacity to protect jobs with stimulus packages in the same way other countries are doing. The government must consider funding from lending institutions in order to stimulate the economy.
Regarding public health, the public in general needs to be more educated on the virus, community transmission and its many consequences. Physical distancing requires a disciplined and educated populace. The state, which has done well so far, must also consider the possibility of acquiring more ventilators and ICU beds, and ramp up on testing as well. Excellent new innovations by our young entrepreneurs (e.g. robots, ventilators, tech for the agro economy and so on) should be encouraged.
Q: What is the outlook for jobs and employment in the medium term? And how should the authorities address the prospect of rising unemployment?
A: The outlook for jobs and employment is challenging, and there will be unemployment, salary cuts and a cancellation of perks. Until the economy begins to kick back, the government may have to provide financial assistance to the most adversely effected.
There are some positives for the future of work, however. Work from home (WFH) will create a post-Covid future with less pressure on office space and related company costs. The resulting change in work ethic will have a positive effect on employees as they will no longer need to endure a commute to get to office.
Lastly, the use of technology and digitalisation will grow in importance. This will eventually lead to lower costs across the board, which should have a positive effect on the environment as well. Businesses will begin to prioritise efficiency and lessen the strain on their cost base. Meanwhile, the main beneficiary will be the consumer.
ABOUT LMD’S A LISTERS
BOOST TO REAL ESTATE INVESTMENT
Q: What are your expectations of the business environment in the next 12 months or so? A: With the reduction in interest rates and increase in money circulation, people have a greater tendency to invest in real estate over the money market amidst the pandemic. We have seen similar patterns even in developed markets such…
EMERGENCE OF A NEW ECONOMY
Q: How did the pandemic necessitate a digital economy? A: Countries were not prepared for the COVID-19 pandemic’s impact on the economy and people, but it has resulted in the emergence of a new economy and way of life. It is technology, and the spirit of humans to survive and push past boundaries that have…
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Q: What are your expectations of the business environment in the next 12 months or so? A: I believe that business is not likely to pick up until at least mid-next year for the hospitality sector. Business was nonexistent and as a measure to prevent exorbitant losses, we converted our hotel into a quarantine centre…
A POSITIVE AND FLEXIBLE PATHWAY
Q: Do you expect the national economy to pick up this year? A: If the third wave of the pandemic is brought under control as soon as possible, then we can expect the national economy to pick up towards the second half of the year. To ensure this happens, the vaccine must be sourced in…
RELIABLE PARTNERS IN A CRISIS
Q: In brief, what are the main challenges confronting corporates at this time? A: I think corporates today are besieged with a plethora of problems caused by the prevailing situation. First and foremost is the challenge in keeping their workers safe from COVID-19, and flowing from that is the inability to keep production cycles running…
IN A STATE OF DELEVERAGING
Q: How do you perceive the economic climate at present? A: I would like to really think about the state that the country’s economy is in. Our debt repayments are much higher than our income and this puts Sri Lanka in a state of deleveraging. This recently manifested itself in a 14.2 percent increase in…
EVER EVOLVING EXPECTATIONS
Q: What modern-day challenges do businesses face? A: Information overload – in the new world we live in, there’s never a lack of information. About 2.5 quintillion data bytes are added every day; more data is created in a single day than the combined amount generated over 99 percent of human history. Previous generations of…
EXPANDING CREDIT FACILITIES
Q: What is the bank’s corporate strategy for 2021/22? A: DFCC Bank’s 2021/22 plan is based on our five year strategy for 2020-2025 with the aim of making it one of the most customer centric and digitally enabled banks by 2025. Our lending plans will align with the government’s budget proposals to facilitate the growth…
REMAINING IN THE SPOTLIGHT
Q: What are Sri Lanka Tourism Development Authority’s (SLTDA) priorities for 2021/22? A: The global tourism industry will continue to experience a huge shift in the way of doing business. Our innovative bio-bubble concept launch in January was recognised at ITB Berlin. We hope this will boost traveller confidence. Therapeutic destinations and experiential travelling are…
