How reliable is Sri Lanka tourism's confidence index?
Nowadays when people travel they talk about their experiences like never before. The hundreds to thousands or more of narratives describe the places people go, stay, and do - all of which help millions of people make informed decisions on travel. It is therefore vital that DMO’s are able to capture, analyze and influence the stories people share, at scale.
In the past, destination marketing organisations (DMO)’s considered recommendations from the inner circle of family, friends and others providing word-of-mouth feedback on tourism destinations visited, as beyond their sphere of influence. However, DMOs (which again were the single source of information at one time), are now been forced to re-think and re-model their role. With the internet of everything carrying the world’s largest - ever collection of data about how people think about one’s destination, DMO’s should now be able to really finally find out what are people saying about the country and how the destination is trending.
Thailand for example uses the ‘Tourism Confidence’ Index to gauge how tourism in that country is developing, by monitoring several KPI’s that provide useful information. It is an on-going exercise, jointly collaborated between the Tourism Authority of Thailand (TAT), the Tourism Council of Thailand (TCT) and Chulalongkorn University’s Faculty of Economics.The survey is divided into six parts. These include an overview of Thai tourism, confidence index of tourism operators, testimonials from domestic and international tourists, tourism situation during key festivals, international tourist arrival projections, and recommendations for future action.
The index ratings have a range of between 0 to 200. Over 100 means better than the normal situation; 100 means normal; and below 100 means worse than normal. For the 1st quarter of 2019, Thailand’s index stood at 100, whilst the 2nd quarter Tourism Confidence Index of 600 tourism operators, carried out in May, was steady at 100 (as predicted in the 1st quarter survey).
The projection of the Thailand Tourism Confidence Index for the third quarter of 2019 is also set at 100.This has been determined from the findings in the 2nd quarter of 2019, which highlighted both the micro and macro factors affecting Thailand’s tourism industry – the slowdown of the world economy as well as Thailand’s economic stagnation; the Thai government’s stimulus and tax reduction scheme; extension on the visa-arrival fee waiver for citizens of 20 nations for another six months until October 2019 and the strength of the Thai Baht to a weakening US dollar combined with rising inflation.
Take International tourist arrival projections. Using the Index, Thailand will welcome 9.7 million international tourists (up 7.06% year-on-year) in the third quarter of 2019. It projects that total arrivals will reach 40.06 million international tourists for all of 2019, up 4.65% over 2018.
Interestingly, Sri Lanka’s Promotion Bureau Chairman, as reported in a newspaper in late August predicted August 2019 arrivals to increase upto 175,000 going on to add that they (SLTPB) hopes to receive an average 175,000 arrivals in September and October 2019, respectively. In other words for the 3-month period (August – October 2019), arrivals are predicted to show a 6.5 % increase over the same 3-month period in 2018. Adding to all this, Sri Lanka Tourism Development Authority Chairman says “Looking at the arrival projections for 2019, we hope to get around 2 million to 2.1 million tourists as opposed to 2.3 million in 2018”. He goes on to say that when compared to the recovery level in countries like Bali and Australia, that faced similar situations, Sri Lanka has definitely surpassed the recovery time period.
The average time needed for affected captal cities to return to prior levels of tourism is usually 12 – 13 months and the earliest sign of recovery (getting-out-of-red) is when occupancy gains compare with the year before. Sri Lanka, it appears has come out of the red within 4 months after the April terror attacks. This bounce back from the April free-fall is beyond all expectations and if the Tourism Confidence Index is applied for Sri Lanka, would mean a rating over 100 (better than normal)…perhaps even 200.
Taking an entirely different stance - one that flies in the face of these predictions, the Chairman of the Tourist Hotels Association of Sri Lanka expects a 50% drop in arrivals, claiming that whilst tour operators are very confident of the country and are happy to sell Sri Lanka, they lament that the tourists do not want to book Sri Lanka.
Based on the observations made by those in the vanguard of tourism activites, one will need to wait and see how the coming four months will compare with what one would reasonably expect for this time of the year.
Shafeek Wahab – Editor, Hospitality Sri Lanka, Consultant, Trainer, Ex-Hotelier
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