Thursday Nov 14, 2024
Thursday Nov 14, 2024
Thursday, 1 August 2013 02:07 - - {{hitsCtrl.values.hits}}
About a year ago, I wrote few articles with the above heading in several newspapers, which created considerable discussion and debate at various forums. The whole thrust of my argument was that, while national arrival statistics continue to show healthy growth, most star classified hotels in the country were reporting drastically reduced occupancies.
This trend seems to be following in 2013 as well, with hotels reporting very poor occupancy in June/July, said to be worse than even during the war years.
The whole basis of this controversy is that arrivals are recorded based on emigration statistics, where passengers who stay more than 24 hours in the island are all counted as tourists. Hence, this will necessarily capture several types of visitors, which will include the genuine foreign tourists, who stay in registered tourism establishments (star class hotels and guest houses) as well as Sri Lanka diaspora visiting friends and relations, who may not stay in hotels. In addition, there is yet another component of foreign tourists who stay in the unregistered smaller establishments, who also get counted in.
These two latter categories do not get captured in the Sri Lanka Development Authority (SLTDA) figures of Foreign Guest nights (FGN), although they are still recorded as tourists at the point of entry (see figure).
Tourism professionals have always known that the best indicator of ‘real foreign tourist’ arrivals is the Foreign Guest Nights (FGN) recorded by the industry, which is collected and published by the SLTDA. This gives a reasonably accurate indication of the number of foreigners, who stayed at registered accommodation units all over the island.
These statistics for the past three years is given in the table. Note: The writer made valiant efforts to obtain the 2012 FGN figures from the SLTDA without success, in spite of the fact that it is now the end of July 2013. Such information should be made readily available to the public in a timely and accurate manner, to enable tourism professionals to make strategic decisions. On the contrary, it now appears that SLTDA is rather reluctant to share or release such information.
Hence for the purpose of the above analysis, the 2012 data presented by H.M.S. Samaranayake , a former Chairman of the Tourist Board, and respected stalwart of the industry, in an article recently published by him under the heading ‘Sri Lanka’s tourism milestones in 2012,’ has been used.
Main observations and highlights
2010/2011
1. The FGN (an indication of the number of foreign tourists, who stay in approved establishments) showed a much greater increase in the SME sector (80%) than in the formal sector (21%).
2. Increase in total FGN in all approved establishments for 2011 was 35%, with a total of 725,889 foreign guests being recorded in all the accommodation establishments.
3. The national arrival figures for 2011 was however 855,975, which shows that there is a ‘loss’ or ‘leakage factor’ of 130,086 visitors (15%) being unaccounted for.
2011/2012
1. The increase in 2012 of FGN in star class graded establishments was a paltry 0.5%, while FGN in the smaller supplementary sector grew by 5.5%.
2. The FGN in all registered establishments grew only 2.1% in 2012, which translates into 741,520 real foreign tourists staying in registered establishments.
3. However, the national arrival figures indicated an arrival figure of 1,005,606.
4. Hence, this indicates a larger ‘leakage factor’ of 244 096 visitors in 2012 (26%).
Where have these 244,096 tourists been ‘lost’ in 2012?
As indicated earlier there are two categories of ‘tourists’ recorded by the Emigration Department, but who do not get captured in the SLTDA FGN statistics. They are:
1. The diaspora element, who are essentially Sri Lankans on foreign passports, visiting friends and relatives.
2. Foreign tourists who opt to stay in unregistered cheaper bed and breakfast units which are freely available in most tourism areas.
Hence it is quite obvious that this ‘missing chunk’ of tourists is from these two categories.
Conclusions
From the foregoing statistics, the following is quite clear:
1. The SME tourism sector is growing faster than the conventional star class establishments.
2. The formal larger star class sector grew only by 2.1% in 2012, which could be attributed to high pricing.
3. The ‘leakage’ factor seems to be increasing YOY (15% in 2011 and 26% in 2012).
4. This means that more tourists seem to be moving to the lower end of the price spectrum, which is in turn fuelling more and more unregulated smaller ‘mom and pop’ operations, cropping up all over the island.
Similar conclusions have been arrived at by other tourism professionals, including former Sri Lanka Tourism Promotion Bureau CEO Dileep Mudadeniya and former Sri Lanka Tourist Board Chairman H.M.S. Samaranayake and published elsewhere.
