Sri Lanka Looks Beyond Pandemic to Carve Out a New Tourism Future

Sri Lanka won high praise in the initial months of the pandemic for its swift and strict action to contain the virus, and for producing astonishingly detailed and unambiguous protocols to safely unlock the country to international leisure tourists on August 1. Alas, that reopening had to be shelved due to a spike in cases in July, then a second wave in early October that was traced to a garment factory near Colombo.

The country is now in final discussions to welcome back foreign tourists, even though there were 643 new cases on December 15, Sri Lanka’s Health Promotion Bureau data shows. The U.S. Centers for Disease Control and Prevention has a Level 4, the highest advisory, against travel to Sri Lanka.

That said, Sri Lanka’s Covid-19 recovery rate, at 73 percent, is higher than the global average of 70 percent. The death rate, 0.5 percent, is miniscule compared with 1.8 percent for the U.S. and 2.2 percent globally.

The Bandaranaike International Airport is likely to reopen from December 26, initially for charter flights carrying predominantly Eastern European tourists and, if all goes well, normal flights could resume gradually, according to industry sources Skift spoke to in Colombo.

Talks this week surround the ceaseless question of reopening safely but invitingly, such as whether the quarantine period for incoming tourists in a safe-certified hotel should be reduced from 14 to seven days, they said.

The airport was closed in mid-March when the first local Covid-19 patient was detected, although national carrier SriLankan Airlines, Qatar Airways, Emirates, Etihad and Turkish Airlines have been operating repatriation, cargo and departure flights.

These are all crucial developments for a country that pre-pandemic was on a road to recovery of a different sort. A series of terrorist attacks in 2019 targeting churches and luxury hotels in the capital city Colombo brought Sri Lanka to its knees. But the country’s tourism industry had been getting back up on its feet to reestablish itself as a desired destination. Then the pandemic.

Heavy Toll

That the country is attempting another reopening under these new circumstances shows the heavy toll Covid-19 has exacted on its economy.

Tourism is Sri Lanka’s third largest foreign exchange earner after textiles and garments, and workers’ remittances. The industry employs 402,000 people directly and indirectly, official figures show.

“Sri Lanka should reopen with the right mechanisms and protocols in place. We expect that the appropriate directives will be communicated to us soon,” said Stasshani Jayawardena, Aitken Spence director, head of tourism and leisure, and chairperson of Aitken Spence Hotel Managements. The company operates 21 hotels, 11 in Sri Lanka and the rest in the Maldives, Oman and India.

Industry players are keeping their optimism about recovery in check as the country takes baby steps to unlock.

“For us, 2021 will be a ‘towards’ recovery year, while actual recovery will be only in 2022,” said Dileep Mudadeniya, vice president marketing and events at Cinnamon Hotels & Resorts. The chain, which operates 11 hotels in Sri Lanka and four in the Maldives, is part of John Keells Holdings, the largest listed conglomerate in the country.

Minor International, which operates four hotels in Sri Lanka, is also projecting a recovery for Sri Lanka only in 2022. “The cautious steps the goverment is taking make sense. Sri Lanka is unlike the Maldives, where tourists are fully quarantined by default on the islands,” said Dillip Rajakarier, CEO, Minor International.

The sun has shone again for the Maldives, the only Asian destination that is enjoying a splendid high season, thanks to its “one island one resort” proposition, which is not only unique but relevant in these times.

Minor’s five hotels in the Maldives, which reopened in October, are doing better this December festive season than last year’s while first-quarter 2021 bookings are also ahead, said Rajakarier.

Soul-searching

Sri Lanka, meanwhile, is soul-searching its USP, keen to ensure it fits right into the needs of post-pandemic travelers the way the Maldives has so effortlessly.

This is ironic, since Sri Lanka is so much richer in attractions than the Maldives with its terraced rice fields, tea plantations, national parks, beaches, wildlife, adventure and culture. Besides, no one can resist the smile and soft spokenness of its people.

For all these reasons, and its affordability over the Maldives, Sri Lanka tourism has always bounced back from crises. Its last black swan before Covid-19, those Easter bombings of 2019, showed this resilience clearly.

By the end of 2019, Sri Lanka had 1.9 million arrivals, not too far off from its 2018 record arrivals of 2.3 million, Sri Lanka Tourism Development Authority data shows.

“By January this year, we were back to pre-Easter Sunday arrival figures,” said Hiran Cooray, chairman, Jetwing Hotels, the largest chain in Sri Lanka with 30 hotels and villas in 16 destinations. “This was due to the tremendous support we received from international media and tour operators.”

USA Today ranked the country as the fourth most in-demand destination in 2020. CNN Travel picked Sri Lanka as one of the best places to visit in 2020. “We were looking forward to a fabulous 2020 when Covid-19 brought a full stop to everything,” said Cooray.

The question is, can Sri Lanka bounce back as quickly as ever? The pandemic has changed travelers’ priorities, put millennials as the first drivers of recovery, and created fierce competition among destinations for any pent-up demand that is released.

Sri Lanka could be vulnerable as it traditionally relies on tour operators, is heavily dependent on a few markets, and is new to attracting millennials who are free independent travelers, book travel digitally and demand unique experiences.

Its five top tourist sources last year were India, the UK, China, Germany, and France.

“Australia and New Zealand can be potentially big, along with Asian countries such as Vietnam, Singapore, Thailand, Taiwan and South Korea. It’s about time we get into those markets,” said Cooray.

Aitken Spence Hotels, which gets a lot of business from TUI (Aitken Spence Travels is 50 percent owned by TUI), said it has diversified towards India, China and other Asian and Middle Eastern markets. “We have also diversified our offering to include adventure, medical, sports and eco-tourism,” said Jayawardena.

A Whole New Experience

At an industry online discussion last week on post-pandemic tourism revival, Sri Lanka Tourism’s chairperson, Kimarli Fernando, acknowledged the institution isn’t made for marketing to millennials. But it is changing.

“In the past, a lot of effort was in trade shows. With Covid-19, it’s more online. We will continue to work with tour operators and agents who have supported us through the years, but we will also go to the digital side,” she said.

“Going forward, we are looking at promoting experiences, whether it is wellness, adventure, food or culture, rather than promoting to countries/nationalities such as India, China or UK. Our institution is made for marketing to countries, so it’s a gradual process.

“Older people, not just millennials, are looking for experiences. We noted this trend even before Covid-19. We’ve got to change the way we do things. We have a strategy and road map.”

The Sri Lankan cabinet approved a five-year global communication campaign just before the onset of Covid-19, the first since 2009 when the country reopened for tourism after the civil war. Promotions are likely to kick-off in early next year.

But suitable new products are also needed to attract new markets and segments. Traditionally, beaches are a big Sri Lanka draw, especially for Europeans.

Wellness is an immediate focus area obviously, said Fernandes. The European Union is funding the product development, branding, marketing and certification of wellness resorts focusing on Ayurveda and Sri Lanka’s own indigenous traditional medicine, hela wedakama.

The government acts as an enabler. The private sector has to create the products and services, she said.

Apart from wellness, Fernandes also singled out adventure/wildlife, and “film” tourism as other focus areas. Lots of producers of films and documentaries have come in the last two years and Sri Lanka will create a “one-stop shop” platform for them, she said.

A lot is actually being done. A one-stop Sri Lanka Tourism mobile app for foreigners visiting the country post-pandemic, developed with funding from the United Nations Development Program, is an example of the authority embracing technology and digitalization. Registration, immigration and Covid protocols can be done via the app. A total of 4,956 tourist sites in Sri Lanka, identified by Sri Lanka Tourism during the down time, will also be included.

Sri Lanka is also one of the first Asian countries to appoint KPMG to audit and certify its hotels and other tourism establishments for safety and security, free of charge.

Training sessions on pandemic preparedness have been conducted for small and medium enterprises, which form 88 percent of the tourism industry.

Bureaucracy has been flattened and onerous regulations streamlined, resulting in a 34 percent increase in unregistered businesses to come forward and be registered, according to Fernandes.

New projects must have a sustainable angle, be it using renewable energies, recycling water or a zero-plastic approach.

Meanwhile, projects such as John Keells’ mixed-use waterfront integrated resort, Cinnamon Life,  is set to transform Colombo’s skyline. Another is Escape Sri Lanka, the country’s first theme park, located between Colombo and the beach resort city of Galle. The joint venture between Singapore-based Sim Leisure Group and Elpitiya Plantations, an associate company of Aitken Spence, was signed in April. Sim Leisure’s founder and CEO cited Sri Lanka’s highly educated population, relatively low-cost of doing business, a domestic market of 21 million people and a first-mover advantage on theme parks, as factors for his expansion into Sri Lanka.

Urgent Matter

All of which is well and good. But to some, while immaculate repositioning for the future must happen, leadership on a recovery plan and working with all stakeholders on it is the present urgent matter.

“Identify first the top 10 potential markets in the short-term for 2021, markets where we are likely to see quick and safe recovery,” said Jayawardena. “As a country we must identify the tour operators that are capable of delivering on the targets from the potential top 10 markets and those who can support destination Sri Lanka to recover. Also, it is important to work closely with those tour operators to identify potential travel corridors.”

Indeed, tour operators in India, by far Sri Lanka’s biggest market now, are “awaiting clarity from authorities and on-ground partners” about its reopening, said Rajeev Kale, president & country head of holidays, meetings & incentives and visa of Thomas Cook India.

“Sri Lanka is a year-round holiday destination for Indian travelers, given the proximity. It offers a diversity of experiences and stunning landscapes and has religious significance, with our Ramayana Trails a very popular offering. It fits every customer price point while visa-on-arrival has ranked it high on the Indian leader board.”

SOTC Travel in India said vaccine news has renewed Indian consumer confidence to travel in 2021 and there has been a rise in enquiries for short-haul destinations such as Sri Lanka, Dubai and the Maldives

“The upcoming year has many weekends that can be clubbed together [to travel short-haul],” said Daniel D’souza, SOTC Travel’s president & country head, leisure. Indian travelers now want bite-sized, curated travel itineraries that are safe, and Sri Lanka fits.

But Sri Lanka hotels expect domestic travelers and resident expats to continue to be their biggest market in 2021. That’s 15-20 percent occupancy at best, such as during this festive season.

“In a good year, domestic business forms only 20 percent of business, not enough to sustain the industry,” said Cinnamon’s Mudadeniya.

The pandemic will wipe out the small players. The biggest wipe-out, said Minor’s Rajakarier, is talent.

“There’s a lot of redundancies in the hotel sector. Bigger chains like us are able to retain talent, for example we post staff to new hotel openings in other countries and move them back when the situation improves. But the small players are unable to do that,” he said.

But there is some good in all of this. “A lot of hotels were built after the end of the conflict in 2009, with no proper planning or any idea of tourism,” said Cooray. “Those will fade away. Only those who are truly committed to travel and hospitality will remain. And I hope that haphazard, unplanned buildings will not reappear when normalcy returns.

As at end-2019, Sri Lanka had 2,620 accommodation establishments, 85 percent of which were small and medium-sized guesthouses, homestays and bungalows. The remaining 15 percent, or 388 establishments, were hotels. Of that, 233 were unclassified, Sri Lanka Tourism data shows.

Hard though it may sound, Covid-19 is a good clean-up, which will strengthen “the small island with a big heart” in the long run.