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Tourist
industry : Revival plans The recent
surge in tourist arrivals has made those in the tourist industry
smile, which for long had been in the doldrums. The trade seems
to be recovering from last year's severe shocks. Terrorist
attacks The terrorist
attacks in the United States on September 11, 2001 made matters
worse. Total tourist arrivals for 2001 plunged by almost 16 percent
compared with the previous year. Today, no longer
do foreign travel agencies warn their clients against travelling
to the island. Business is now flourishing in many Colombo hotels
with the recent increase in arrivals. The ICC Champions
Trophy cricket tournament and the Miss Tourism International pageant
held recently certainly helped revive tourism. Peace talks Praveen Nair,
general manager of the Taj Samudra, said his hotel was full. "The
ICC and the Miss Tourism contest were one-off events," he said.
"They
help in building momentum. But they were not the main reason. The main reason
is the climate created by the government with its peace initiative." Revival A team of Tourist
Board officials was in the US on a promotional tour. It is also
making arrangements for Sri Lanka to take part in a trade and consumer
fair in Shanghai, China, in November. Tourism Minister
Gamini Lokuge last week announced that British Airways is expected
to resume direct services to Sri Lanka from April next year as a
result of the government's peace initiative. This would help create
a better international image concerning travel to the island and
increase the number of visitors. Tourist arrivals
have recovered since July this year. Lokuge said he intends setting
up a Tourism Authority with government and private sector participation
and was also looking for new markets such as the Arabian countries.
The hotel and
tourism industry directly employs more than 33,000 people while
providing indirect employment to at least 47,000 people. Spending
by tourists on food, beverages, travel and shopping, generates employment
to thousands outside the industry - from the taxi drivers to shop
assistants in shopping malls. There has been a definite increase
in the number of foreign shoppers in recent times, according to
Ivan de Silva, senior manager of Odel Unlimited. Given the repeated
setbacks suffered by the industry owing to the Eelam war, the government
has intervened several times during the past two decades. Relief packages
A number of
hotels in the southern region and elsewhere did make use of it.
But it does not seem to have been successful nor has it completely
fulfilled the requirements of an industry in distress. Priyankara
Wickramasekera, Treasurer of the Executive Committee of the Ruhunu
Hotels Association, said a major lapse in the scheme was that it
did not cover loans taken from leasing companies. Some hoteliers
appear to believe the government should work out miracles for them
while others feel that the industry too must play a major role in
any revival. Chandra Mohotti, general manager of Galadari Hotel,
said that they went through a difficult period after the Tiger attack
that damaged the hotel, suffering a loss of nearly Rs. 900 million.
The government only gave Rs. 400 million as compensation. Mohotti
believes the government should do more to help the industry. He
suggests it should help the hotels to do their refurbishing and
reconstruction and promote Sri Lanka as a safe tourist destination.
Nair of the
Taj Samudra believes the industry and the government have their
own roles to play in reviving tourism. "When
you are sitting on the other side of the fence we blame everything
on the government. Building an industry should be done in both ways.
The government
should help in building infrastructure and giving visa facilities.
This they have done. It is we who
have to go to the international market and generate publicity to
attract tourists. There is a major part to be played by the businesses
too." Arrivals have
improved significantly with the introduction of the 'on arrival
visa' for visitors from the South Asia region and from China. The
seat load factor for Sri Lankan Airlines for the first part of September
was over 80 percent, said an airline spokesman. Ceasefire The Ceylon
Hotels Corporation, for instance, is thinking of expanding and taking
over some of the hotels in the northern region in the near future,
said Ranjith Balasooriya, marketing manager of the Ceylon Hotels
Corporation. All the hopes
and expectations of the business community, including hoteliers,
depend on the success of the peace talks. The Tourist
Board's Warnasuriya said Sri Lanka might be able to reach the 400,000
arrivals figure this year. But, he believes, the best years are
yet to come. The
challenges facing insurers
Rehmanjee, UAL's first CEO who relinquished office after an 11-year
spell but continued as a non-executive director, took over as CEO
after the company said Sarath Wickremanayake, CEO since April 1,
2000, had quit in an unexplained move.
"We are looking for a CEO and may have to look outside because
we can't find a suitable candidate here," the veteran insurer
told The Sunday Times FT. Rehmanjee said he would continue as CEO
and also guide the newcomer, possibly as an executive director.
"The board of directors would, however, have to take a decision
on this." Like many companies affected by last year's economic slump, UAL is also trying to recover from difficult times and turn things around this year. Rehmanjee, one of Sri Lanka's most experienced insurers with some 40 years experience working in the Insurance Corporation, the private sector and a Dubai-based firm where he helped set up insurance units, said the insurance industry is entering a new competitive phase. By Hydery
A. Rehmanjee The new paradigm
will induce many pressures on insurers. Some of the more important
ones will be:
In the millennium
the organization which will succeed will be those that can capture
and exploit knowledge. It will be harder to compete on price alone.
The likely differentiator will be the quality of service and speed
of response to challenge. Accelerated competitiveness will be a
key issue, perhaps more important in the insurance industry, than
anywhere else. However, in the rush for technology, insurers will
have to understand that IT can only be the enabler never the panacea.
In a scenario
where individuals are becoming increasingly aware of their legal
rights risks are getting larger and insurers can face huge claims
resulting from misselling to customers. In the UK recently, many
leading insurers were directed by the regulatory authorities to
make additional provisions amounting to billions of pounds after
being held liable for pensions resulting from misselling by their
representatives.
The regulators
in turn will have a dual responsibility. On one side they have to
make sure that the insurers adhere to sound insurance principles
and practices as well as maintain adequate financial resources to
meet their liabilities and at the same time play a proactive role
in developing the market, promote competition and innovation. A balance has
to be struck between a more rigorous premium rate and policy-wording
based regime as against a regime which permits greater operational
freedom but places much more emphasis than hitherto on overall financial
strength. In this situation the balance sheets of insurers will
come under much greater scrutiny particularly in areas such as valuation
of assets and the adequacy of capital and technical reserves. |
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