• In conversation with JourneyScapes Managing Director and  Sri Lanka Association of Inbound Tour Operators (SLAITO) Past President Devindre Senaratne 

The tourism industry of Sri Lanka has faced numerous challenges in recent times, particularly due to the global recession and the impact of the Covid-19 pandemic. To gain insights into the current state of the industry and on the business, we interviewed JourneyScapes (Pvt.) Ltd. Managing Director and Sri Lanka Association of Inbound Tour Operators (SLAITO) Past President Devindre Senaratne.

In conversation with The Daily Morning, Senaratne highlights the various ways in which the tourism industry has been affected. While many countries have experienced challenging periods, he emphasises the importance of encouraging frequent visitors into the country. Senaratne estimates that more than 80% of people have resumed travelling, but there is a noticeable reluctance to engage in long-haul travel. Instead, travellers are opting for destinations closer to their home countries, such as Europe, Eastern Europe, Australia, the Middle East, India, China, and Russia.

The following are excerpts from the interview:

What made it so interesting for you to enter this field? Where did you start, and how did you begin this whole journey into the tourism industry?

I began working for Browns Tours in 1984, a long time ago. When I started out as a trainee, Browns Tours was a well-known travel agency. From there, I developed my career in tourism. After that, I started working at Serendip Group Hotels and advanced all the way to director of marketing. Moreover, there weren't many hotel groups at the time. I worked for the Serendip Group, a renowned hotel chain until 2000 and I started JourneyScapes in the year 2000. Within a few years, JourneyScapes gained much recognition as a tour operator. We are one of the best tour operators for Germany, who brought in the highest number of German tourists to Sri Lanka. Germany was one of the best in terms of tourist inflow numbers to the country. The company I used to work for, FTI Touristik, was awarded accolades by Sri Lanka Tourism from 2007 to 2012, and over the course of five years, became the greatest tourist-producing country for Sri Lanka through us. Then, as the years passed, we built the stunning Sigiriya Jungles four-star resort. I began working with SLAITO in 2010, and from 2015 to 2017, I served as the organisation's President. I served as a board member of the Sri Lanka Tourism Promotion Bureau at the same time and later joined the Convention Bureau's board of directors.

What is the status of the tourism industry at present and how has the global recession impacted the field?

It is affected in many different ways. The problem is, most of the countries experienced challenging periods after Covid-19 pandemic. However, it is crucial that those who frequently travel, continue to do so. I would estimate that more than 80% of people have begun travelling. However, they have proven that they are not committed to long-haul travelling. Europe, Eastern Europe, Australia, the Middle East, India, China, and Russia are our main markets because they can easily travel to Sri Lanka in the span of 10 to 11 hours. Europeans would travel within Europe and have started travelling to the Mediterranean for their summer holidays. In Sri Lanka, I wouldn’t say that we have established long-haul travel to a level of 80% even before Covid-19 pandemic. However, I would estimate that we have achieved 50-55%, from which we currently benefit. There were 2.3 million visitors in 2018 and have contributed $ 4.5 billion to the Sri Lankan GDP. We are currently working hard to surpass the target of 1.2 million tourists. The Government's goal is to achieve 2 million visitors. However, we don't think we can reach farther than 1.2 million, with the disruptions, the market conditions, and the number of promotions we run.

How does your tourism company help the country's economy? 

We are bringing in a respectable amount of visitors, and JourneyScapes brings in earnings from foreign exchange. It contributes significantly to the country's foreign exchange earnings. Even our hotel, Sigiriya Jungles, and the tour operator are two specific business shares that were made possible by foreign exchange as we get a lot of direct bookings from clients.

The Government is also targeting high-end tourism. What is the potential we have as a country for that market?

I believe that is not how a country should be positioned. I see it as pointless. We follow a country which has different market plans. A country like the Maldives may pull it off since they do not have similar issues from the very beginning. They fill up their hotels with a high-end crowd. A five-year plan for marketing activities is what I believe we need. By doing so, we can raise our yield. When you conduct a structured promotional campaign with the consumer in mind, both the consumer and the tour operator become enthusiastic about making sales. Your yield will increase as a result of doing that. We have a particular market share at the moment and maybe our market share from the big number is the niche market, high-end tourist. When you say high-end, there are different types of high-ends. The four-star and five-star hotels are also high-end as well as the boutique hotels, which are also very high-end. We have boutique hotels and the people who patronise these boutique hotels, would come at about 2-3%. We must be able to do marketing to increase that to about 6-10%. We need to market the country to increase our market share from the four-star and the five-star hotels to deluxe operations. Then we could increase that from about 25%. When we accomplish that, we may move on to the next phase, determine how to position ourselves, and eventually arrive at our desired path. However, I believe that what we really need is to steer clear of aggressive price-only deals, create fantastic marketing strategies, and position the nation extremely effectively. The positioning of the country is most crucial. In order to attract tourists, a country must first position itself, develop a solid marketing strategy, and implement it in the top 14-15 markets worldwide. What we can also do is choose digital marketing over traditional marketing since it receives quick responses and reaches customers instantly. The good news is that Sri Lanka Tourism is preparing to create a marketing strategy as well. We have already chosen an advertising firm and completed a short-term plan for eight countries. However, the procedure is the key and will require some time. Meanwhile, the SLAITO and The Hotels Association of Sri Lanka (THASL) is pressuring them to complete the five-year action plan.

As a tour operator, are you satisfied with the promotions theTourism Promotion Bureau is doing and the support that you receive from the Government? 

I am confident that we are moving in the correct way. There are good people at work at the moment in the Tourism Promotion Bureau. However, the issue we face in the sector is that there are many pointless restrictions, such as the Government procurement system and other such elements. But if we can resolve such issues, I believe there are other solutions. Moreover, the only requirement of the entire system is that we give marketing the top priority. 

Are we visited by enough tourists and what are the prominent countries?

We are not getting enough tourists. Up to the end of June, we had only 580,000 tourists. Even 700,000 would bring in our target of 1.2 million tourists for 2023. When we were booming from about 2011 till 2019, a lot of people started investing in tourism and hotels. Now, there is an excess capacity due to the lesser number of visitors we are receiving. There is more supply than demand. In such a situation, the first thing that happens is that they engage in price undercutting, which is really dangerous. Prior to 2020, China was the top arriving market. About 225,000 tourists visited Sri Lanka, followed by India, England, Germany, France, Australia, and Russia in that order. China had the most visitors overall. Chinese visitors to Sri Lanka typically stay for five nights in total. The typical stay for the Indian traffic is four nights. However, European visitors stay an average of 11 nights. If you consider the number of room nights occupied, I believe the UK and Germany could be higher, or France, with 425,000 to around 380,000 Indians, 250,000 British, and roughly 180,000 Germans. The nights will be comparable and equal. 

What kinds of destinations does Sri Lanka specialise in among tourists? 

It is sold differently in every market. Germany, for instance, is a landlocked nation. There are no beaches there. There is only the sea at Hamburg, at the top of Germany. The sea and beach are very popular among Germans. The proportion of Germans visiting for beach vacations is substantially higher than that of other visitors. British people were also like that, but they adore the country. They regarded Sri Lanka as an explorer's paradise. In my opinion, they are more internet-savvy because of the positioning and marketing we have done online. We have observed over the past ten years that they promote the country more than the beaches for Europeans. They do a conventional trip, visiting our UNESCO World Heritage Sites while staying a few days in the Cultural Triangle. They travel to the Nuwara Eliya district after arriving in Kandy. Plus, in terms of wildlife, Sri Lanka is regarded as the best destination outside of Africa. Sri Lanka has excellent biodiversity. British and Australian visitors to Sri Lanka value wildlife and view it as a key component of their trip. 

As a tourism operator, how do you face the challenges of seasonal fluctuations? Especially since the tourism industry in Sri Lanka can be highly seasonal, with peak seasons experiencing high demand while off-peak seasons can be slower.

Knowing that there are seasonal variations, we began operating in areas where the majority of Europeans visit during the winter and a small number of families visit during the summer months when schools are out. This has helped us to avoid handling extremely few cases. However, the majority of them fly to the Mediterranean. The most significant thing is winter. However, tourists from countries like the Middle East. China and Australia visit Sri Lanka at any time of year.

What sets your tour agency apart from others in the industry?

Sri Lanka is well-known to us. We have travelled extensively and visited every tourist-generating market. Moreover, we are aware of the unique requirements of many nations. As a result, we in Sri Lanka use our experiences to meet that demand. As I previously stated, we have visited those nations, spoken with the people there, and are fully aware of their desires. What we do is create itineraries that will be highly sought-after in those nations. People develop trust in you and return to you when you consistently fulfil your promises.

How have alternatives in government policies, economic downturns, or security concerns affected tourist arrivals and business operations?

To solve all of their issues and boost the GDP of the nation by almost 20%, the Government should embrace tourism. Second, tourism has a cascading effect. Many additional vendors, including egg suppliers, vegetable and fruit suppliers, garages, and other service providers, would also directly gain from this, in addition to travel agents, hoteliers, guides, and other service providers like the Safari Jeep Association. At the moment, the number one forex gainer is the work remittances from the Middle East. The apparel industry is also another source of income, but only about 40% goes back again. But, with tourism earnings, the 4.5 billion that we have earned, is the net. And if we have 4 million tourists, we could definitely earn Rs. 10 billion.

What are the impacts of minimum room rates on the city hotels?

The whole industry is impacted because relevant authorities do not have a strategy for Colombo. The minimum rates are not a smart idea for us to implement right now or at any time. Not just with regard to tourists, but our demand has not increased. Tourists make up only about 25% of the population. I believe business tourism should provide the lion's share. The market share of our business tourism has declined, not increased. Since both our economy and theirs are struggling, many people aren't coming to Sri Lanka for business anymore. The figures for the corporate sector that we had in 2018 and now, are low. The key players in the tourism industry, including Western Europeans and others, do not want to stay in Colombo. However, the three markets, the Middle East, India, and China, are what you need. They move around the city. The problem for them is that they don't make a lot of money. They do not represent those who would pay more and they pay close attention to costs. You would thus, set minimum prices for them, which will not be effective. The most significant factor though, is that we lack international competitiveness. We are only approximately 35% of occupancy, and we are not well-known for MICE events, except with India, which has made a small number of MICE reservations. Sri Lanka, otherwise, is almost unknown to the MICE community globally. Currently, with the high room rates, those reservations from India for MICE won't come because they themselves have issues, such as being tied into a 20% tariff on incentives that promote international travel and being priced out of India.