The Sunday Times Economic Analysis

The Sunday Times Economic Analysis By the Economist

Another mirage :Elusive dreams and targets of tourism
There is much talk about the potential for the development of tourism. Various tourist related bodies are visiting the country. They speak about the country's scenic beauty, its bio-diversity, the beaches, the cultural heritage, hospitality of the people and all sorts of advantages the country has. Ministers and tourist officials are travelling hither and thither to promote tourism. Just like the mirage of rapid economic growth that we discussed last week, the targets and dreams for tourism keep eluding us. Tourist arrivals have been fluctuating over the last two decades and with it the fortunes of the industry and related services.

In 2000 the number of tourist arrivals reached a little over 400,000. Then it dipped in the succeeding year to about 337,000 and increased somewhat to around 393,000 in 2002. The up-trend continued into the next two years. In 2003 it rose to 500,542. The highest ever tourist arrivals were reached in 2004, when it increased by a further 13 per cent to reach over 566,202. The increases in tourist arrivals were no doubt due to the improved security situation after the Cease Fire Agreement.

Last year's tourist performance was somewhat anomalous as the numbers were around the same as in 2003, but the earnings from tourism declined by about 20 per cent. The number of tourists was deceptive as a fair proportion of them were not typical tourists. Therefore although the official number of tourist arrivals dipped very little, tourist earnings last year is likely to be around US$ 300 million compared to US$ 413 million in 2003. In fact even these may be an exaggeration as many receipts classified as tourist earnings may well be those related to Tsunami related work. Last year the country recorded over five hundred thousand tourists, but in fact many of them were those who came in connection with Tsunami work. That is the reason why tourist earning dipped despite the larger number of arrivals. Tourist hotels had large numbers of rooms unoccupied as a result. On the one hand, some hotels in the coastal areas suffered damage and on the other hand, hotels in other areas had fewer guests. Last year was therefore a very bad year for tourism.

The tsunami was the main reason for the dip in last year's tourist earnings from those of the previous year. There are expectations that now that the aftermath of the Tsunami is over there would be a spurt in tourism. This is not likely, as the security situation has in the meantime deteriorated. In fact the security situation has been the biggest enemy of tourist development in the country. It all began with the July 1983 ethnic riots that sent the rising tourist industry into a shelf. There have been recoveries and setbacks since then, most of which have been related to the fluctuations in security conditions. The best years have seen around a half million tourists. This is hardly a figure to brag about.

The reasons for the inability of tourism to gain momentum lie not within the industry itself. The primary cause for the last two decades has been the security situation. No one wants to come to a tourist destination where lives are in danger. Other countries have suffered the same fate, notably Egypt and Indonesia. Some government and tourist measures may alleviate the situation and improve the tourist arrivals. Yet as long as there is an overhang of terrorism and danger to life, the capacity to develop tourism is limited. As Renton de Alwis a former Chairman of the Tourist Board has said in his book, Random Thoughts, Tourism has been recognised as a key sector that every political grouping wants to develop in the future for there is strong potential for earning the much-needed foreign exchange and generating productive employment opportunities. But what they all forget, is that the key ingredient for all of that to be achieved is stability in the operating environment.

Nevertheless to view the potential for tourism purely from the perspective of the security situation is inadequate. The reasons why the tourist industry has not taken off to the promised potential lie elsewhere as well. While we have seminars here and abroad, travel to other countries, host receptions and offer incentives to travel agents we have not got the small things that matter right. The roads leading to many hotel destinations resemble jungle paths; the garbage all over the roads is disgusting even to Sri Lankans. What would be the reaction of those who come from countries where the streets are neat and tidy? Driving on the roads appears hazardous. The debris from the Tsunami remained for months.

here are dangers of fevers and other communicable diseases. Toilets in some tourist destinations are disgusting. All these deficiencies add up to making tourism not so attractive as people tend to make it out to be. When will we correct these for the good of those who live in the Island as well as those who visit? Then we can expect the full potential of our natural and historic attractions. Let's improve the natural environment we are blessed with than degrade it if we are serious about increasing the much-needed foreign exchange from tourism.

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