Challenges in tourism
View(s):Recent comments by Pegasus Reef Hotel Chairman D.C.R. Gunawardena in the company’s 2012/13 annual report asking “where are the one million tourists staying?” must have struck a chord with owners of star-class properties. Gunawardena’s poser was that though Sri Lanka is seeing a million arrivals, the impact is hardly felt in star class properties where occupancy levels are not great.
“It is therefore prudent to surmise that this influx of tourists have patronised the bungalows, guest houses and residences of relatives as their preferred abode as opposed to regular hotels,” he has said.
The other point he makes is about the lack of trained staff, price wars, lack of rooms, inconsistent service standards and inadequate marketing efforts in foreign markets — all problems that have not been resolved since post-war May 2009.
These issues have often pointed to one key factor: “Have we correctly positioned our tourism product?”
Tourism authorities have been promoting eight categories – pristine, heritage, thrills, wild, bliss, scenic, essence and festive – as the reason for foreign travellers to visit the “Wonder of Asia”.
However without close collaboration between the state and private sectors such attractive tags are unlikely to work. Take for example marketing and promotion: The tourism cess that for years was collected by tourism authorities and ploughed back into destination marketing and promotion and other related events, was some years ago taken over by the Treasury. Money for tourism promotion is now doled out by the Treasury on a case-by-case basis which led to disagreements during the time Nalaka Godahewa was heading the state tourism agencies. This is not because the Treasury is stingy in its allocation but due the fact that this money is being used for non-tourism related development and other ‘urgent’ expenses. There have been many times when foreign trade exhibitions have been sans the presence of top state officials. In one instance an official who was slated to attend an event abroad along with other private sector industry bigwigs didn’t make it to the airport. Why? Permission was not given at the last minute.
On price-wars, the eternal lament of a large section of the industry has been the minimum pricing which has risen to $180 per night in 5-star hotels in Colombo compared to a net of $90, three years ago. The result, today, of this pricing mechanism is that Colombo’s 5-star hotels are currently averaging around 40 per cent occupancy compared to much higher earlier, even during the off season. However other class hotels in Colombo (2-3 star) are making big bucks at $80 a night and showing good occupancies.
Price-wars are also emerging in the southern resorts where all kinds of offers are being made with credit card companies cashing in on a ‘confused’ industry which doesn’t seem to have any direction. While on the one side new hotels are springing up all over the countryside, a plethora of small hotels on the southern coast are up for sale, as our story on the previous page says.
Poor service standards are also killing the industry. Recently at a cocktail in a top Colombo hotel, a young steward was not sure about the identity of a set of colourless alcoholic drinks he was serving. Each time a guest wanted Barcardi or Vodka, he rushed to the barman to check the drinks on his tray.
The drop in service standards is all because of the industry being unable to cope with the large tourist numbers more than doubling to over a million last year from 438,475 in 2008. The industry is unable to recruit good quality staff as arrivals and, in particular, food and beverage events show a phenomenal rise. While there is now some effort to ramp up training at the state-run hotel school, the supply is simply not enough to meet the demand. Furthermore the industry doesn’t seem to be a very attractive vocation with a high turnover of staff in F&B and other areas of a hotel. Retaining staff is one of the biggest challenges as the economy expands and offers other, more attractive job options.
Small hotels, guest houses, apartments or home-stays are all eating into the traditional accommodation market necessitating the need for a coordinated strategy on new hotel/accommodation approvals to make sure that in 5 to 10 years there is no surplus of rooms and with that, empty hotels!
The numbers game, as one industry analyst calls it, also raises the eternal question of whether all the one million arrivals are tourists or belong to other categories. Under UN guidelines, a tourist is categorized as a foreign passport holder who stays for over 24 hours. The average spend per tourist is considered to be US$70 per night.
Foreign passport holders listed as arrivals include Sri Lankans who reside overseas, diplomats and their foreign staff, NGOs workers and friends – and that’s a sizable number, but doesn’t make them tourists with $70 per night spending power.
A clear categorisation of these arrivals is required to reflect the more precise number of tourists for the benefit of the industry and policy planners.Sri Lanka should not be trapped in a situation where the inability to face these challenges backed by poor policy guidelines would result in a surplus of rooms, shoddy service standards and a never-ending price-war.
Follow @timesonlinelk
comments powered by Disqus