While the trade wants to see a destination marketing strategy that will move demand in tandem to room inventory growth, the NTO says the answers lies in its non-traditional marketing plans.
Seema Makala Temple along Beira lake, Colombo
An explosive room supply growth that outstrips a slowing arrival demand is one of the biggest challenges the Sri Lankan tourism industry is grappling with right now, especially as there has not been a clear and updated destination marketing strategy from the NTO.
According to official data, Sri Lanka’s room supply is expected to increase by a third in the next few years, from a registered 32,929 as at end-2016 to a total of around 40,000 rooms across all categories including homestays and guesthouses.
New openings in Colombo this year include debuts under the Shangri-La, Sheraton and Grand Hyatt brands while Mövenpick Hotel Colombo recently launched in January.
Krishan Balendra, director at John Keells Holdings, the largest hotel operator in Sri Lanka, said that despite the significant new capacity injected into the market last year, the group has “not seen an oversupply during the current season”.
However, Devindre Senaratne, president of the Sri Lanka Association of Inbound Tour Operators, observed lower occupancies in the top tiers as arrival growth dipped 14 per cent year-on-year in 2016, down from 17.8 per cent in 2015 and 19.8 per cent in 2014.
This was partly due to the slowdown in growth of tourist arrivals from China – Sri Lanka’s second largest source market after India – from 136 per cent in 2014 and 57.6 per cent in 2015 to 26.4 per cent in 2016.
“Chinese visitors are filling the gaps (taking up 35 per cent of occupancy during the off-peak season) in hotels, otherwise it would have been a dead summer,” said Senaratne, adding that 51 per cent of the visitors stayed in informal sector accommodation.
To drive demand, the industry has been calling for a destination marketing campaign since the last one was launched in 2009, as occupancies in five-star hotels are not reflecting increased arrivals as visitors opt for cheaper accommodation.
“Give us time,” said Sutheash Balasubramaniam, newly appointed managing director of Sri Lanka Tourism Promotion Bureau (SLTPB).
The bureau will launch a short-term digital marketing campaign in markets including India, China, Western Europe and the Middle East followed by a global campaign later this year or in early 2018.
“The world has changed and most travellers look at where to go next either on their iPad or mobile. We want to aggressively tap that market initially through digital marketing and social media platforms,” Sutheash said.
The new promotion campaign will revolve around “authenticity, diversity and compactness”. Sutheash added: “This is Sri Lanka’s unique selling proposition. We offer the real thing, not an artificial snow place for instance, and you can see all these attractions in a short time. This is the advantage that we have over India, Thailand or the Maldives.”
As well, increasing the number of homestay units in coming years is one way the SLTPB is pushing for sustainable tourism development while providing visitors with an authentic village living experience.
Sri Lanka has declared 2017 the Year of Poverty Alleviation with a focus on tourism, a key pillar of the national economy, as a driving force.
Said SLTPB chairman Paddy Withana: “We need tourism benefits to trickle down more to the people… Last year the tourism spend per day was US$166. Now what percentage of that amount percolated to the bottom is what we need to find out.”
Meanwhile, strategies to fill rooms in the higher tiers include organising mega-events such as those centred around water sports, music, food and entertainment, as well as developing lesser-known national parks.
This article was first published in TTG Asia April 2017 issue. To read more, please view our digital edition or click here to subscribe.