Tourist industry gasping for breath

• 60% drop in occupancy in main hotels
• prices for locals slashed by 45%
• 52,085 directly dependant, over 72,919 indirectly dependent

By Malik Gunatilleke

Tourist hotels in Sri Lanka are struggling for survival. The adverse security situation in the country and strict travel advisories warning tourists against coming here, has prompted hotels to lay-off staff during the normally peak tourist season.

The Tourist Board announced that arrivals dropped by at least 10% during last month. Indications are that the figure would slide further. The Hoteliers Association claimed the slump was expected to be much higher resulting in a of 60% drop in occupancy in the main hotels.

Hotels spread across the country have been hit by the low tourist arrivals forcing them to look for alternatives including promoting local guests at half the usual prices, introducing new cheap packages and hiring halls for weddings and functions in order to survive.

The LTTE attacks at Galle, Sigiriya and Colombo, tight security in tourist areas have had an adverse impact on arrivals from the European sector, sources in the trade revealed.

“The situation is terrible for the industry, considering that this is the peak season. Many Hotels have switched to try and attract the local travellers to compensate for the huge loss,” Mr. De Cruz, Front Office Manager of the Sigiriya Village told The Sunday Times.

He said the hotel had slashed prices for locals by 45% after more than 40% cancellations during the past few months. Room charges have been reduced to Rs. 6,800 per night and if the occupant wishes to book the room for two nights, the second night is entitled to a further 20% discount.

De Cruze said the hotel had budgeted 60% occupancy for the month of November but their occupancy was down to 11.54% .
Tourism in the Sigiriya area which usually is at its peak during this season was badly affected after the LTTE attack in Digampathana in Sigiriya where over 100 sailors were killed in September.

Though no major incidents have been reported in the Kandy region, and the area being promoted as a safe destination, tourism in the area has been adversely affected.

The Front Office Manager Mahaweli Reach Hotel, K. Damunupola said the current situation was very bad, and occupancy level at the hotel had hit a 30% low.

He said they were currently trying to fill banquet hall reservations and were promoting function halls to compensate for the drop in foreign tourists.

The Hotel now offers discounts up to 25% on room charges to attract the local tourists and to further promote the hotel.
A 30% to 40% drop in bookings for the month has been recorded.

R. Weerasingham, Resident Manager of the Nuwara Eliya Grand Hotel said occupancy at the hotel had dropped by 25%when compared to last years figures.

The West European market showed an overall decrease of 23.7 percent in October 2006, as major markets such as UK, Germany, France and Netherlands showed decreases in comparison with the corresponding month in 2005. Among them UK and France recorded the highest decreases, recording a drop of 30.9% and 48.6% respectively.

The October 2006 arrivals from India and Japan, which are considered major markets in the region, recorded decreases between 2.5% and 15.4% respectively in comparison to October 2005.The North American market too saw a drop of 22.6% in tourist arrivals, while tourist arrivals from Australia reportedly dropped by 17.5%.

President of the Hoteliers Association of Sri Lanka, Hiran Cooray, said that hotels around the island had reported occupancy slumps of approximately 60% during the past two or three months.

He charged that government silence regarding travel advisories issued by European governments had hurt the industry and added that minor staff in the hotels and the people indirectly dependant on tourism would suffer ten times more than the hotel administration.

Among the worst affected areas is the southern coast of Sri Lanka which used to attract a large number of European tourists during the months of November and December as they sought warmer climates.

Senaka De Silva, President of the Hoteliers of South said they had experienced a very poor season and forced many hotels to cut down on staff.

He said staff had been reduced by about 10% to 20% as cost cutting measures were implemented.

Not surprisingly travel agents too have been badly affected by the drop in tourism. They claim outbound travel agents are being attacked in more ways than one.

Nihal Perera, President of the Travel Agents Association of Sri Lanka (TAASL) said that the winter did not look good as tourists were cautious about travelling to Sri Lanka.

He said in-bound travel agents had experienced a drop of between 30% to 40%.

Dr. P. Ramanujam, Secretary of the Ministry of Tourism told The Sunday Times that the Ministry had formulated a plan in conjunction with the Tourist Board to promote Sri Lankan tourism in European countries like the UK and Germany, which had issued lenient travel warnings.

“We are aiming to recover from this slump during the months of January, February and March,” he said.

Dr. Ramanujam said France had adopted very strict travel restrictions on Sri Lanka (the Franch law states that travelling to Sri Lanka is prohibited), but the major markets such as India and China were being targeted by the Ministry for promotional purposes. He added that while there had been an 8% to 10% drop in tourist arrivals during November, if the plan worked, the country could recover by early next year.

Chairman of the Tourist Board, Udaya Nanayakkara confirmed that both the Ministry and the Tourist Board were trying to take counter measures including getting the foreign media to promote travel to Sri Lanka. He warned that despite efforts of the Ministry of Tourism and the Tourist Board to promote Sri Lank in foreign countries, the deteriorating security situation in the island would continue to turn travellers away from the country.