Sri Lanka needs a tourism turbo charge
“To make tourism grow or increase at a faster rate than usual or to make it much more effective?”
As the country grapples on growing the economy from where it was a couple of years ago, all the stats show tourism will play a leading role for that growth to continue. Whilst tourism arrivals have remained steady, showing year-on-year (YoY) growth of 17.3 percent compared to 2024, the current pace is insufficient to meet the Sri Lanka Tourism Development Authority’s (SLTDA) forecasted target for 2025. SLTDA forecasted 1.14 million tourist arrivals between January and April 2025. The actual arrivals total of 896,884 tourists is off the pace by 247,253 visitors. A major point of concern is that the current (2nd) quarter marks the beginning of the low season.
Accentuating the challenge of meeting its target for 2025, is the uncertain outlook for tourism arrival numbers as the effects of the current trade war remain unclear. Global growth prospects for 2025 and 2026 are expected to be slower than historical levels at around 2.5 percent pa, but escalating trade protectionism may lead to slower growth in our key tourism markets, and lower future arrival numbers as a result. The silver lining here is that although the new US tariffs will impact the global economy, European tourists who avoid travelling to the US may instead turn to Asian destinations.
Sri Lanka Tourism plans to attract 3 million tourists (up 50% over 2024), aiming to generate US $5 billion revenue (up 58% over 2024), in 2025. Given today’s unfolding global scenario, an overhaul / revision of the tourism plan should be finalised and presented by the Sri Lanka Tourism Development Board as soon as possible, in order to execute it in the second half of 2025. The benchmarks set for travelers from long-haul and short-haul markets may also need to be re-set, depending on their average spending and the length of stay, respectively.
2025 is our chance to reinforce the value of tourism and prove what our country has on show. Sri Lanka must aggressively act now to rewrite and push that story even wider. Like every export industry, to be able to compete we need to be telling our story about why people should come to Sri Lanka not some day, but today.
Furthermore, the marketing direction now would need to be changed from headcount to spending ratio, putting more focus on long-haul markets, which typically generate higher income per head than Asian markets. It’s time to look beyond counting the number of arrivals in the broader economic growth plan aimed at enacting sweeping societal and lifestyle transformations. This requires acting now as it will take time to show results.
Is the government failing tourism?
It astonishes me to see that such a valuable sector been actively ignored. In Sri Lanka, it seems to be taken for granted. Wider political decisions are taken with seemingly little regard for their impact on hospitality – like the recent 3-day ban on the sale of alcohol in the hospitality industry over the Wesak period. The Government has to show entrepreneurial spirit and agility and demonstrate its ability to stimulate demand by affirmative actions, rather than suppressing it such as delaying the launch of its promised global tourism campaign.
Successive governments and industry stakeholders often portray tourism as one of the islands’s saving grace, focusing all the while, on the number of arrivals as its ultimate key performance index. In 2018, tourist arrivals reached a record 2.3 million visitors and became the country’s third-largest source of foreign exchange that year (after remittances and the apparel export industry). However, the tourism industry directly contributed only $4.3 billion or 4.9% of the country’s GDP that year, which stood at $88 billion.
Focusing on high financial value still keeps the tourism industry's spotlight on a quantitative metric. Certainly, the financial benefits of tourism cannot be understated. However, tourism cannot be treated as an ATM machine, where prioritising short-term financial gain over the long-term health and sustainability is the short-sighted goal.
Isn’t it about time that we start considering more qualitative KPIs and become more accepting of localization and distinction and variation when it comes to defining “success?”
Shafeek Wahab – Editor, Hospitality Sri Lanka, Consultant, Customer Service Trainer and Ex-Hotelier
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