The Tourism Industry In Sri Lanka Tourism Essay

This report contains the results of the investigation which is done to find out ‘how the new born peace will affect the tourism industry of Sri Lanka after defeating the LTTE leader Brabhakaran and washing out terrorism from Sri Lanka. The main areas used for the investigation are,

The problems occurred in Sri Lankan tourism industry due to war.

Under this area, this investigation is carried over the major problems which Sri Lankan tourism industry faced because of the war. This is mainly carried out through secondary data such as news paper articles, other articles from the websites and report published by Sri Lankan tourism development Authority. Some of the facts were gathered through the questionnaire given to the director of the Sri Lankan tourist Board, London.

Affects of new born peace to

Investors

Under this factor the investigation runs towards the new opportunities which investors will have in the future after the war and what will be the incentives and advantages of investing in those areas. This is also mainly done through the secondary data such as newspaper articles, brochures and reports published by the Sri Lankan tourism development authority, websites.

Tourists

The research carried over to find out what will happen to the number of tourist arrivals in future after the war. What are the new facilities will offer by Sri Lankan tourism industry, what will be the attracting destinations developed and how will the government help in developing tourism industry. Mainly this is carried out by primary data which is collected through the questionnaire and others were gathered from the secondary data.

Social life and local people

In this research is on the changes, that will happen on social life and the local people with the new born peace and its affects on tourism. These information were gathered by using both primary and secondary data.

Areas and regions

Here the investigation is on the tourist areas which will affect the new born peace. The report contains the new developments of tourist areas will be done in Sri Lanka. The research is done using secondary data such as websites.

PEST analysis SWOT analysis

This research carried a PEST analysis and a Swot Analysis in order to find out how the political, economical, social and technological environments will change or adjust according to the peace affected tourism. Also an analysis for SWOT to find out the strengths & opportunities that will strengthen the growth of the tourism industry and weaknesses & threats which will weaken the growth of the tourism industry. For this both primary and secondary data have been used. Specially the report publishes by Sri Lanka tourism development authority.

Sri Lankan tourism industry will grow in future with the developments and growth in investments, tourists, areas and regions and local people in this peaceful environment. Finally Sri Lanka will create a golden period for the tourism industry in the new born peace.

INTRODUCTION

Sri Lanka is a country famous for hospitality, tourism and well being people from the past. Once Marco Polo has told in 1293 A.D., ‘this for its actual size, is better circumstanced than any other island in the world. The island produces more beautiful and valuable rubies than found in any other place in the world. In this island there is a very high mountains where the tomb of Adam, our first parent, is supposed to be found.’

(Ref:http://www.traveldailynews.com/pages/show_page/31677-Sri-Lanka-Tourism—Quo-vadis- )

But since from the near past (1980s’) Sri Lankan tourism industry dropped step by step, as LTTEs started their terrorism mainly from the North part of Sri Lanka and spread to East and other parts of the country later on.

Fortunately now Sri Lanka is free from terrorism after about 3 decades. Therefore the country is safe to roam from North to South & East to West without any double thoughts. This situation has affected on tourism industry in a positive manner. Now the tourism industry is blooming again slowly within the new born peace and has become a cause to change the Sri Lankan Economy, Political view, social life on tourism and many more. Therefore this report has investigated on ”How the new born peace will affect the tourism industry in Sri Lanka”.

This report contains,

The problems occurred in Sri Lankan tourism industry due to war.

The affects of new born peace to

Investors in tourism industry

Tourists

Areas and Regions

Social life of local people

The opportunities due the new born peace

a). PEST b). SWOT

METHODOLOGY

This research is done by gathering information from both primary data and secondary data.

Primary Data

I have used an interview and a questionnaire as the primary data in finding information for the research.

Secondary data

I have used mainly the latest report (National Strategy for Sri Lanka Tourism) published by Sri Lanka Tourism Development Authority and broachers, magazines news paper articles, websites as the secondary data.

THE PROBLEMS OCCURED IN SRI LANKAN TOURISM INDUSTRY DUE TO WAR

Sri Lanka experienced a vastly fluctuating tourism during the past decades.

(Ref: http://www.traveldailynews.com/pages/show_page/31677-Sri-Lanka-Tourism—Quo-vadis- )

As per the World Tourism Organisation figures, tourist arrivals has increased in Asian countries for the past decade.

(Ref: http://www.traveldailynews.com/pages/show_page/31677-Sri-Lanka-Tourism—Quo-vadis- )

But Sri Lanka has dropped tourist arrivals.

(Ref: Central Bank of Sri Lanka)

While all the other foreign exchange earning sectors have increased their earnings, tourism has decreased though it is the fourth largest foreign exchange earning sector.

(Ref: http://www.traveldailynews.com/pages/show_page/31677-Sri-Lanka-Tourism—Quo-vadis- )

Bombing in buses and tourist destinations caused a huge draw back in tourist arrivals. Even though Sri Lankan tourist board offers them worth packages they didn’t want to visit Sri Lanka because of the safety reason.

(Ref: http://ipsnews.net/news.asp?idnews=47983 )

Bad press releases during the war time, both internally and internationally affected vastly tourists decisions on Sri Lanka. Some were distributed only to get political gains and some were to draw a bad picture on tourists’ mind about Sri Lanka and get advantages.

Higher insurance covers had prompted tourists to see elsewhere. Insurance covers were high because of the high risk level of security within the country.

(Ref: National Strategy for Sri Lankan Tourism- page no: 15)

Good employees of tourism industry have gone to other countries due to poor salaries and lack of opportunities among the industry.

Lack of government support in promoting the industry according to the changes in the market.

AFFECTS OF NEW BORN PEACE

TO INVESTORS

During the past 3 decades investors for tourism industry were locked within the Southern & Middle part of the country. But now they have the opportunity to invest in all over the country as they wish. Especially in North & East regions which has most famous places to visit such as most beautiful beaches, temples, etc. with the end of war, tourist arrivals may increase. Therefore the government and the private sector has to be ready to welcome them with good accommodation facilities, infrastructure, transportation facilities, and many more. For that investors can invest in the new environment which is more favourable to them. Some of the favourable are,

Cost of doing business has reduced due to the end of war. Freight rates, insurance, and other financial issues which added a huge cost for business has now decreased. Therefore investors can get more profits over their investments.

(Ref: http://sundaytimes.lk/090628/FinancialTimes/ft335.html )

Political stability is growing especially in areas of North & East. This leads to stability in policies and rules. Therefore investors can invest in long-term projects.

(Ref: http://sundaytimes.lk/090628/FinancialTimes/FT335.html )

The government of Sri Lanka has started providing infrastructure such as roads, power, and ports. This also again reduce investors costs in investing.

(Ref: http://sundaytimes.lk/090628/FinancialTimes/ft335.html)

Stock market has climbed over 96% in 2009 which is the winning year of the war. It’ll be more profitable in investing stock market in future.

(Ref: http://www.srilankaequity.com/2009/12/sri-lanka-back-on-investment-radar.html )

Interest Rates and Inflation rate are coming down.

The Sri Lankan government has reduced their lending rates and has asked the private sector to reduce their lending rates. This is a very usefull and profitable information who wishes to borrow fund in Sri Lanka.

(Ref: http://www.srilankaequity.com/2009/12/sri-lanka-back-on-investment-radar.html )

The end of war has cleared new paths for new investment opportunities across real estate, healthcare, plantation, and infrastructure. Especially in North and East regions for about 3 decades there were no opportunities for any industry to do their work freely. What was there is only war. Therefore there are opportunities for hospitals and other healthcare facilities, plantation as this region has the most rich lands and infrastructure as all the infrastructures have been destroyed during war season. These are indirectly interconnected to tourism industry. Because tourism industry is a industry which depends on other industries other than the destinations.

(Ref: http://www.srilankaequity.com/2009/12/sri-lanka-back-on-investment-radar.html )

Cheap labour

Investors can have cheap labour in to their businesses ass the unemployment is more in North and East.

New tourist destinations.

There are new and marvellous locations and places in North and East which were not allowed to visit for about three decades. These places will be more tourist attracting destinations in future.

And also the ruined buildings and places due to war will be attracting sceneries for both local and foreign tourists.

As the Northern and Eastern areas were banned for visitors during the war period, both local people and foreign people are willing to visit these places. Therefore the arrivals of visitors for the North and East will be more and this will lead investors to earn more from those areas by investing in accommodation facilities, infrastructure, transportation, sports activities and leisure activities.

Sri Lankan government is looking for Middle eastern investors to develop the resorts as a preparation for the boost in tourism industry.

(Ref: http://www.arabianbusiness.com/554986-sri-lanka-tourism-eyes-mideast-investors )

MSME will have more opportunities to develop their business with growth in tourism.

There will be more ports other than Colombo to use. They are the Trincomalee port and The Hambantota port. Earlier these ports were used only for military activities but now they are open for common activities.

FOR TOURISTS

New born peace has given a new life for both domestic and international tourists. Specially Northern and Eastern areas are the most attracting areas of tourists these days because of the unseen destinations such as temples, beaches, ruins, etc. Also the current favourable security level has given tourists a boom. Here are some more tips for the change in tourists’ behaviour.

New unseen locations.

Tourists, both local and foreign can experience world famous and beautiful locations which are not polluted or crowded. Especially the Eastern sea and Nilavelli beach are the most attracting areas in the Eastern region. Other attracting things are whale spotting, fishing, water sports, sea rafting. Also the locations with historical value and religious value, especially in Northern area, such as Nagadeepa, Jaffna library, ruins of war, etc.

Not only in North & East, tourists can visit other places such as Anuradapura, Polonnaruwa, Mohinthale, Sigiriya, Sinharaja rain forest, National Parks, hill-country which is famous as little England, etc.

Safety

Now Sri Lanka is free from bombs, suicide bombers, and terrorism. Therefore people can visit anywhere in the country without fearing about safety from LTTE activities. This was the main reason which reduced more and more tourist arrivals. But now it is fully solved. So tourists have the opportunity to explore Sri Lanka without fear.

Proper Facilities

The Sri Lankan government and the private sector is building infrastructure fast to provide proper facilities for tourists such as roads, power and ports.

(Ref: http://sundaytimes.lk/090628/FinancialTimes/ft335.html)

Also proper places for accommodation and other facilities are building up so that the tourists may feel that they are at home.

More leisure and sports activities

Sri Lankan sea is famous for sports activities. And now tourists have more opportunities in Eastern Sea. Because Eastern sea is known as a sea which is very calm and good for sports activities such as rafting, whale spotting. Also Sri Lanka has a unchanging whether throughout the year. Therefore tourists can come and enjoy whenever they have leisure time.

Stable political environment

As now Sri Lanka is bit stable in their political status due to the end of war. Therefore policies and rules in tourism especially rules in arriving will be stable. So that it’ll be very easy for tourists while visiting Sri Lanka especially on Visas.

And there will be less political violence among the country which will create a peaceful environment for tourists.

New resorts for both local and foreign tourists especially in Nothern and Eastern areas. Also in other areas as the investors are interested in investing tourism sector.

Example: Kuchchaveli resort

Passikudah resort

Sri Lanka is not famous only for leisure tourists but also for pilgrims. Therefore Pilgrim rests are building in order to provide proper facilities especially for domestic tourists.

(Ref: National Strategy For Sri Lankan Tourism- page no 61)

More facilities for business tourists.

Sri Lanka was famous for MICE activities in the past. But it dropped due to the poor security. Now again MICE activities are booming in Sri Lanka with the new born peace. Therefore the government is looking to provide better facilities for businessmen who come to Sri Lanka for MICE activities.

Tourists will be able to arrive Sri Lanka not only by air but also by cruise ships as now Sri Lanka has 2 more ports. Trincomalee port and Hambantota port are the two new ports which has started work after war.

TO AREAS AND REGIONS

After the war especially the Northern and Eastern regions have started to develop fast. Also the other areas of the country are developing faster as the governments’ military cost has reduced. This helps in developing tourism industry. For examples,

The local areas are developing as the government has already started developing infrastructure in North and East regions.

(Ref: http://sundaytimes.lk/090628/FinancialTimes/ft335.html)

Kuchchaveli Resort

This is a area about 500 acres in Trincomalee district which is inbetween the North Nilaweli beach and Kuchchaveli village. This resort contains hotels, other facilities regarding accommodation, land and water based sports and a theme park. This will help in attracting more tourists in future.

(Ref: http://www.sltda.lk/eastern_region_development )

Passikudah project

SLTDA has planned to restart the Passikudah resort project which was planned to start in 1983 and stopped due to war. This resort is located by the Passikudah bay and contains 500 rooms in about 150 acres. This project will also generate high tourist arrivals.

(Ref: http://www.sltda.lk/passikudah_project )

Trincomalee and Hambantota ports will be busy with commercial ships and cruise ships with visitors and goods.

TO SOCIAL LIFE AND LOCAL PEOPLE

Peace has changed the social lives of people especially in the parts where fighting were there. Those people did not know anything about outside apart from those areas which they live. But now the situation is changed. People are free to open up to the world. Many have started to work with the tourism industry because of the huge number of tourists arrivals. People from other parts of the country are also free to live their lives without the fear of terrorism. They are more common in North and East as domestic tourists. because they were not allowed to visit those places for about 3 decades and the people from North and East are free to visit other South part of Sri Lanka after 3 decades. Here are some of the affect of the end of war to the social life and local people from the view point of tourism.

Political stability is growing. so that people are able to stay wherever they want to stay and they are free to visit wherever they want. Also the rules and policies of regarding business will remain same. Therefore local people can start small scale businesses such as small hotels, guest houses, rent three-wheelers, batik, etc. especially in tourist areas.

(Ref: http://sundaytimes.lk/090628/FinancialTimes/ft335.html)

Government has started to work with infrastructure especially in North and East areas. Therefore its be easy and fast to develop tourist oriented businesses as well as other businesses in those areas.

(Ref: http://sundaytimes.lk/090628/FinancialTimes/ft335.html)

Interest rates and inflation is decreasing. So that people may borrow money and invest in their businesses and build their damaged properties. And this will create a beautiful eye-catching areas for tourists. also the prices of goods will decrease due to lower inflation and it will create wealth among people.

(Ref: http://www.srilankaequity.com/2009/12/sri-lanka-back-on-investment-radar.html )

There will be more employment opportunities with the incensement in tourist arrivals and other tourism activities in all over the country.

People will have more money with them so that they will be motivated to visit places and go for day outs, picnics and trips.

More fishing opportunities in North and East.

Tourism police will have to be expanded to stop drug trafficking, prostitution and abuse of children with the full support of the courts, local people and politicians as the tourism industry grows.

Guides, lecturers, drivers, three-wheeler entrepreneurs, will get more opportunities especially in North & East as well as the other parts of Sri Lanka due to growth in tourist arrivals.

Also owners of small guesthouses with one or two rooms, small hotels, restaurants, bar, tea boutiques will have a increase in their income.

Arts & crafts, spice gardens, batik, woodwork centres, wellness centre also will increase their sales.

PEST ANALYSIS

POLITICAL FACTORS

Political environment has changed after the war in order to develop tourism industry.

The government supports by conducting investment symposium such as ‘BizPact invest in Sri Lanka’ which was held in June 2009 to attract new investments.

(Ref: http://sundaytimes.lk/090628/FinancialTimes/ft335.html)

Political stability is growing specially in North and East regions after the war.

(Ref: http://sundaytimes.lk/090628/FinancialTimes/ft335.html)

Government is aiming to welcome 700,000 to 750,000 visitors by 2011 through ‘visit Sri Lanka’ programme.

(Ref: http://www.srilankaequity.com/2009/12/sri-lanka-back-on-investment-radar.html )

Government is looking for Middle Eastern investors to develop the resorts after the war.

(Ref: http://www.arabianbusiness.com/554986-sri-lanka-tourism-eyes-mideast-investors )

Reorganised the tourist board and ministry in order to deliver a good service.

(Ref: National Strategy for Sri Lankan Tourism- page no: 04)

Develop a 4 year strategic plan for tourism for the period of 2009-2012.

(Ref: National Strategy for Sri Lankan Tourism- page no: 04)

The Ministry, in partnership with the provincial council are creating a series of recommended one day tours especially for domestic tourists

(Ref: National Strategy for Sri Lankan Tourism- page no: 62)

ECONOMICAL FACTORS

Sri Lankan economy has changed vastly with the new opportunities occurred with the new peace after the war. Following are the factors which will affect Sri Lankan tourism as a result of ending war.

Doing business in Sri Lanka is more economical because the cost has reduced due to reductions in fright rates, insurance and other financial issues.

(Ref: http://sundaytimes.lk/090628/FinancialTimes/ft335.html )

Stock market has increased over 96% in 2009 after war.

(Ref: http://www.srilankaequity.com/2009/12/sri-lanka-back-on-investment-radar.html )

Inflation and interest rates are coming down.

(Ref: http://www.srilankaequity.com/2009/12/sri-lanka-back-on-investment-radar.html )

The North & East will contribute heavily to GDP growth in the country.

(Ref: http://srilankatoday.com/content/view/2586/52/ )

People will have more money with them.

Commercial ships can come to new ports such as Trincomalee and Hambantota other than Colombo. Trincomalee port is in the East and Hambantota is in South. Therefore the country is available with 3 main ports around the country.

MICE trade will grow with the peaceful environment. Earlier MICE industry experienced cancellations & a sharp fall in arrivals due to the security issues such as suicide bombing.

(Ref: National Strategy for Sri Lankan Tourism- page no: 55)

SOCIAL FACTORS

The new born peace has changed the lifestyles, consumer trends, ethics and religious factors and many more with the affects of tourism industry.

Addition of North and East provinces to the tourism industry will boost employment opportunities as well as the developments in other part of the country will also introduce more employment opportunities.

All the development activities are done by taking care of the community, environment, culture and heritage especially in tourism and hospitality industry.

Northern & Eastern people get fishing opportunities and also people from other areas can come to these areas for fishing.

Tourism police has to be expanded to stop drug tracking, prostitution and child abusing with the development of the tourism industry.

People who own small guesthouses, small hotels, restaurants, bar, tea boutiques will be able to earn more. Also people who do arts and crafts, spice gardens, batik shops, woodwork will be able to earn more with the increased number of tourists.

Guides, lecturers, drivers, three-wheeler entrepreneurs will have a higher demand.

TECHNOLOGICAL FACTORS

Especially the Northern and Eastern areas have started to develop technologically after the war. This has made a great issue for the development in tourism industry because many foreign tourists are from developed countries such as UK, Spain, Germany, Australia, etc. and they will be more satisfied if they have the modern technology to use while they are visiting the beauty of Sri Lanka.

Mobile telecommunication industry will also boom due to the addition of North and East to the tourism industry.

Travel sources such as coaches, trains, cars, taxies have to be developed to provide quality services.

Working towards improving websites and online marketing

(Ref: National Strategy for Sri Lankan Tourism- page no: 56)

Developing internal flights from Colombo to Jaffna with new facilities.

Vavuniya-jaffna rail track has started constructions. This will be a great source to increase the number of local visitors from South to North.

(Ref: http://srilankatoday.com/content/view/4416/52 )

SWOT ANALYSIS

STRENGTHS

Cost of doing business in Sri Lanka has reduced due to decreases in freight rates, insurance and other financial issues.

(Ref: http://sundaytimes.lk/090628/FinancialTimes/ft335.html )

Political stability is growing especially in North and East regions. Therefore it will be more advantages doing business in Sri Lanka.

(Ref: http://sundaytimes.lk/090628/FinancialTimes/ft335.html )

Stock market has rosed over 96% in 2009 just after the war. And it will keep climbing because of the new opportunities for business. Such as tourism and hospitality industry.

(Ref: http://www.srilankaequity.com/2009/12/sri-lanka-back-on-investment-radar.html )

The entire North and east provinces will join in to the tourism industry with their values, destinations, and beauty.

Addition of Trincomalee port to Sri Lankan shipping network will boost huge business visitors and employment opportunities.

Worlds’ finest beaches for surfing, whale spotting, water sports, coastal fishing and coral reefs are now with the Sri Lanka. Earlier half of these beaches were not in a position to offer tourists. but now Sri Lanka has a treasure which many countries does not have.

(Ref: National Strategy for Sri Lankan Tourism- page no: 12)

4 year strategic plan for tourism from 2009-20012 which has developed 10 strategies and 8 objectives to provide a better service for tourists and tourism industry.

Strategic Targets:

To build a more diverse product range.

To make Sri Lanka more accessible.

To attract 1.5 million tourist arrivals per annum.

To increase yield per tourist from US$ 80 to US$ 130 per day.

To create an additional 7,000 rooms by 2016 with the right conditions.

To further develop the East and North-West with the development of existing sites and cities. (resorts and new resorts)

To help traditional markets grow and open up new markets.

To exceed world-class service levels and hospitality.

To increase domestic tourism.

To help MSME sector grow.

Objectives:

Short-term programme

Take immediate action to increase visitors, manage cost and improve services.

Marketing and Communications

Help the world to discover Sri Lanka through rebranding, communication and marketing.

Services and Hospitality

Improve the quality and scope of visitors experiences.

Training & Development

Keep changing the Sri Lankan tourism according to world tourism through professional training.

MICE

Make Sri Lanka a preferred venue for MICE.

Domestic Tourism

Improve and expand domestic tourism.

Grow the MSME sector.

10 year plan

A plan which will place Sri Lanka as a highly desired experiential quality destination.

For the buddhist pilgrims both domestic and international, specially there are Anuradhapura, Polonnaruwa to worship which were not a safe area at the past due to war. Also Nagadeepa which is famous as a place where Lord Buddha was teaching.

For Christian pilgrims there is the Madhu church which is very famous for miracles.

Sri Lanka has 14 national parks with fauna and flora which are now available to offer for tourists.

Able to offer one of the worlds finest fishing grounds, in the coast of the Jaffna peninsula. This creates more domestic visitors and more employment opportunities.

Business travellers can get the perfect work environment with post meeting relaxation including yoga, massage and other treatments. Most of the hotels have these facilities in their separated areas or rooms as a adjustment for the tourist expectations and a way of attract tourists to their hotels again and again.

Sri Lanka has More products to offer than the past. Such as more sports activities, leisure activities, expanded destinations, etc.

Cruise ships are also welcome to the Sri Lankans new port Trincomalee and Hambantota port. So that tourists who wish travel by sea can visit Sri Lanka while getting experience of sea travelling (sailing)

(Ref: National Strategy for Sri Lankan Tourism- page no: 21)

Sri Lanka aims to promote old festivals with a new look such as Ramayana trail.

(Ref: National Strategy for Sri Lankan Tourism- page no: 28)

WEAKNESSES

Lack of Tamil speaking officers to work in Northern & Eastern provinces.

Lack of Inspection on child sex and prostitution.

Still there are undiscovered destinations in the country. Which will attract more tourists to the country.

Lack of integration between agencies. Anyone who wishes to invest in tourism in Sri Lanka has to obtain permission from a number of agencies including numerous ministries, local authorities & Government agents.

(Ref: National Strategy for Sri Lanka Tourism- page no: 15)

Lack of Infrastructure

When a traveller has undertaken an exhausting 12 hour flight, they need a future 5-6 hour. Drive along poor quality roads to reach their hotel or destination. And when they reach they may get poor quality rooms.

Older Cars, Taxis, mini buses and coaches minimise the standards.

OPPORTUNITIES

There are new investment opportunities in real estate, healthcare, plantations & infrastructure sector as core-sectors in tourism industry.

(Ref: http://www.srilankaequity.com/2009/12/sri-lanka-back-on-invesment-radar.html )

Kuchchaveli Resort will be a grate place to spend leisure time for both local &foreign tourists which contains hotels, land & water based sports and a theme park.

(Ref: http://www.sltda.lk/eastern_region_development )

Passikudah resort is Another new resort which is located by the Passikudah bay it contains 500 rooms in about 150 acres.

(Ref: http://www.sltda.lk/passikudah_project )

‘Small Miracle’ , is the Sri Lankan new tourism brand. This has been tested in all the key markets and has shown good results.

(Ref: http://sundaytimes.lk/090628/FinancialTimes/ft328.html )

Sri Lankan government is looking for Middle Eastern to develop the resorts as a preparation for boost in tourism after the war.

(Ref:http://www.arabianbusiness.com/554986-sri-lanka-tourism-eyes-mideast-investors )

Opportunities to expand the industry to new markets and to develop the nature, culture and adventure products through new ‘Beaches & Beyond’ strategy.

(Ref: National Strategy for Sri Lanka Tourism)

Cruise ships and commercial ships can come in greater numbers to new Trincomalee port beyond Colombo and Hambantota.

(Ref: National Strategy for Sri Lanka Tourism-page no:21)

As the war ended Sri Lanka has headed towards new markets like Israel, Japan, Middle-East and Russia other than their usual markets (Germany, France, India & UK)

(Ref: National Strategy for Sri Lanka Tourism-page no:22)

There will be more opportuniti