Economic crisis puts tourism at crossroads ahead of winter season

  • Indian roadshow likely to get postponed to make way for participation at WTM 2022 in London
  • SLTDA Chief Priantha Fernando keen on investing in best bet for maximum RoI for SL 
  • Authorities working on a mechanism to allocate and remit funds 
  • Industry stakeholders outline importance of sharing positive messages on SL at global scale 
  • THASL President M. Shanthikumar insists WTM an opportunity not to be missed 
  • SLAITO President Nishad Wijetunga opines ideal platform to tell world SL is in business
  • First 28 days of August draw 35,381 visitors pushing YTD arrivals to 494,051

Ahead of the winter season, Sri Lanka Tourism is at crossroads in exploring the best opportunities to undertake key promotional activities with limited funds to garner a maximum return on investment (RoI) amidst the ongoing economic crisis.

The authorities are faced with a dilemma, as they would have to either drop or push back previously announced destination promotions to participate in one mega event, given the extreme economic circumstances in the country.

However, the industry stakeholders are of the view that failure to participate at the world’s largest travel fair in London, WTM 2022 in November, would be a “massive missed opportunity” to showcase the resilience of Sri Lanka. This also means that participating at WTM will put the previously planned Indian roadshow on hold again for a later date.

“Despite the opportunities, the industry is at crossroads given the seriousness and adverse impacts of the economic crisis. We have to invest limited resources, most cost-effectively, to gain a maximum return for the destination,” Sri Lanka Tourism Development Authority (SLTDA) Chairman Priantha Fernando told the Daily FT.

WTM is the leading global event for the travel industry, attended by over 50,000 international travel trade professionals annually. Sri Lanka has been a regular participant of WTM to bask in the global spotlight to promote destinations and attract globetrotters. 

Last month the Daily FT exclusively reported that Sri Lanka Tourism Promotion Bureau (SLTPB) will roll out the long-awaited tourism roadshow in three Indian cities — Mumbai, Delhi, and Hyderabad in the third week of next September. This campaign was originally scheduled to be initiated in June, but got postponed due to the political upheaval. (

 “The recent visit to India by Tourism Minister Harin Fernando and his engagement with Indian travel trade has been a great opportunity to confirm the Travel Agents Association of India (TAAI) Annual Convention could be held in November in Sri Lanka. As the entire Indian travel trade partners are likely to visit, Sri Lanka Tourism believes it is an apt decision to participate at the WTM to promote Sri Lanka considering its magnitude of the audience, and higher RoI in the long run despite the financial constraints,” Fernando opined.

Though the tourism industry earns in foreign exchange and the Tourism Development Levy (TDL) has not been absorbed into a Consolidated Fund, allocations and remittance of currency have become a tedious task to convince the officials at the Treasury and the Central Bank.

“Remitting funds is the problem and we are working out a mechanism to transfer the money out of the country,” he said. 

The funds collected by way of 0.5% TDL are distributed among the four key tourism institutions to develop and promote the industry — SLTPB with 70%, SLTDA get 14%, Sri Lanka Institute of Tourism and Hotel Management (SLITHM) with 12%, and Sri Lanka Convention Bureau (SLCB) with 4%. 

Fernando explained that the circumstances cannot be blamed on a particular organisation or a person, as they too are faced with desperate financial management tasks due to the overall downturn of the economic crisis.

With a lot of work still pending for the revival of the triple-hit tourism industry, the SLTDA Chief assured continued support for all stakeholders.

Sri Lanka’s tourism industry forecasts a million travellers with an income of over $ 1.75 billion by the end of the year. As per the latest provisional data from the SLTDA, Sri Lanka welcomed a total of 35,381 travellers during the first 28 days of August, whilst pushing the cumulative number to 494,051 year-to-date. 

Two leading industry bodies – The Hotels Association of Sri Lanka (THASL) and Sri Lanka Association of Inbound Tour Operators (SLAITO) told the Daily FT that they were pushing authorities to make necessary arrangements to participate in this year’s mega event WTM from 7 to 9 November in London, as it has always been a joint-campaign to promote Sri Lanka.

“The industry wishes to participate at the WTM this year, but the lack of foreign currency has become a major stumbling block,” THASL President M. Shanthikumar stressed.

He also opined that there are mechanisms the authorities can still workaround to convert rupees into foreign currency and remit funds.

Veteran hotelier Shanthikumar commended the efforts taken by Tourism Minister Harin Fernando, along with SLTDA Chairman Priantha Fernando and SLTPB Chairman Chalaka Gajabahu for working closely and tirelessly for the revival and development of the industry 

“The Minister and Chairmen of the SLTDA and SLTPB are keen on participating at WTM, but given the shortage of foreign reserves, getting approval for necessary funds from the Finance Ministry and the Central Bank is still a work in progress,” he explained. 

He also pointed out the industry was ready to participate at their expense to promote the destination if the authorities could not make arrangements, citing the importance of participation to get maximum attention of the world travel trade.

“Post-pandemic global travellers are starving to explore different destinations. Sri Lanka is well received by globetrotters for its diverse range of offerings despite being an island nation — for the climate, wildlife, heritage, wellness, adventure, and people. WTM is a massive platform to promote the country and we should not miss this opportunity,” Shanthikumar explained.

SLAITO President Nishad Wijetunga said: “We are of the opinion that participating at WTM London in November is very important. It is one of the most significant international tourism fairs in the world. Under the circumstances that the travel advisories, especially the UK, have been relaxed, we must participate as a country and give out the positive message that we are in business.”

He also said companies that participate do so at their own cost and are keen on making it together with SLTPB, who is currently working on a mechanism to ensure Sri Lanka’s participation at WTM.

Following a one-year break from physical engagement at global trade fairs, Sri Lanka first participated in promotional campaigns last year with the International French Travel Mart (IFTM) Top Resa in Paris being the first, followed by WTM in London.

During the first week of August, there was a 6.9% uptick in arrivals to 11,046 compared to 10,334 arrived in July, but the trend deteriorated slightly in the second week to 9,550 and continued to drop further to 8,317 and to 6,468 tourists from 15 to 28 August. 

Unfavourable developments, such as the ongoing fuel shortages, power outages, economic and social disruptions, and adverse travel advisories issued by certain countries impacted the tourist arrivals in August. 

Following President Ranil Wickremesinghe’s assurance not to re-impose the State of Emergency, multiple countries relaxed their negative travel protocols against Sri Lanka. They include; France, the UK, Switzerland and Norway. 

The UK topped the tourist traffic to Sri Lanka with 18% or 6,495 travellers despite the travel advisories, followed by India with 14% or 5,015, Germany with 9% or 3,065, France with 7% or 2,689 and Canada with 7% or 2,400. 

Earnings from the first half were at $ 740 million, as against $ 44 million in the same period of 2021 as per Central Bank data. In June, tourism earnings were estimated at $ 59 million, compared to $ 4 million a year ago.

(Daily FT)