The low hanging fruit, often taken for granted
Lately, tourism in Sri Lanka seems to get a lot of attention. That’s not to say that it didn’t in the past’. But, with the country desperately looking for a quick way out of the mess it finds itself in, the tourism sector is suddenly slated to play a crucial role in the resurrection of the nation’s distressed economic condition; by attracting a steady influx of tourists to help aid the, disaster-hit island with its foreign exchange woes.
The most important economic feature of activities related to the tourism sector is that they contribute to three high-priority goals of developing countries: the generation of income, employment, and foreign-exchange earnings.
Tourism’s role in the economy is perceived as being restricted to the hospitality industry (mainly bars, cafes, restaurants, hotels and travel including tour and airline operators). However, that is the tip ( a large one at that) of the iceberg, where the economic impact is much greater, since several inputs are required to create tourism and leisure offerings spanning the entire range of farm, agrifood and industrial production, including the manufacture of capital goods as well as construction and public facilities.
Generally, the tourism industry has direct, indirect and induced benefits. A direct benefit is a substantial increase in a country’s foreign exchange earnings because the arrival of every tourist brings a considerable amount of earnings to the destination country. The indirect benefit relates to the immediate consumption for the production of goods and services in the tourism sector. These are the goods and services that tourism operators procure from their suppliers, forming the supply chain. Induced effects stem from payment of salaries, wages to employees in direct contact with tourists and the use of companies that benefit directly or indirectly from initial expenditure n the tourism sector. Examples would include the purchase of consumer goods such as food, clothing and electronic items by those employed in the hotel sector. For companies, this would be the purchase of capital goods or expenditure related to the reinvestment of profits.
In the past, the relationship that existed between the tourism industry and Sri Lanka’s economic growth was such that, despite the contribution made by the sector (Earning US$4.3 billion in 2018), it didn’t get the attention or recognition it deserved as a major economic engine of growth, by policymakers or the wider public.
The Government’s focus on foreign direct investment is of course understandable as FDI is critical to a vibrant economy, but so too is tourism. Without tourism, regional development and job creation suffers. When one looks at the facts, tourism goes into every nook and corner of the country; it lifts the whole community and provides much needed local jobs. We need to move our sector higher up the economic power list so our worth is really understood, appreciated, and rewarded.
None can deny that Tourism is trade. Tourism equates to a major share of trade in services, representing the main source of foreign exchange for many developing countries. Furthermore, the diversification of tourism and its ability to drive rural development, while promoting emerging sub-sectors including gastronomy, wellness and wellbeing and sports and culture tourism is unrivalled.
What is oft forgotten is that tourism builds resilience and we in Sri Lanka have demonstrated that a countless number of times in the past – bouncing back faster and stronger than most other economic sectors who, when exposed to external shocks, take much longer to recover. Tourism means community development: Local tourism jobs and business opportunities help reduce rural-urban migration, while opening doors to the young and fostering gender equality through job opportunities.
Yet, for tourism to fully deploy its potential it must be given proper recognition and support in trade, investment and business development policies. This then, is the opportune moment for the industry to close ranks, seize the opportunity and change the narrative; where the dialogue with the government must centre on going merely beyond recognising tourism as an active export industry. It must walk the talk – only then will it help our tourism industry to have a stronger voice at the table.
Shafeek Wahab – Editor, Hospitality Sri Lanka, Consultant, Trainer, Ex-Hotelier
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