Whither Sri Lanka Tourism? Part I

Thursday, 19 February 2015 00:00 - - {{hitsCtrl.values.hits}}

FAIM, AFAMI At a time when ‘good governance’ is in vogue, a contribution to assist deliberations relating to the future of Sri Lanka Tourism (SLT) may be appropriate. Sixteen years ago, I used the above slide in presenting a Marketing Strategy to the then leadership of SLT. It appears relevant even today. In this context my contribution would focus on a few key areas where SLT could do well to consider. Often when one advocates the importance of marketing, there arises the misconception that it’s all to do with advertising and promotion. Thus the following message from the marketing guru Philip Kotler would be appropriate to ponder on: “Communities fall into the trap of concentrating only on one or two of marketing tasks – often concentrating on the promotional function. They may spend money on expensive advertisements or poorly orchestrated slogans without first carrying out requisite diagnostic and planning.” Is SLT blinded by 2.5 million by 2016? Kenichi Ohmae, one of the world’s leading business and corporate strategists, refers to how the animal trying to cross a road momentarily gets blinded, stops in his track and charges the oncoming vehicle to its own destruction. Management too, he points out, could fall into such mental paralysis when facing challenges by their own visual field narrowing sharply. Thus his contention that they then lose sight of the businesses strategic vision and broader view and other alternatives that are still open and rush with ever narrowing mental vision to their own destruction. Is SLT in a similar situation? Has the challenge of attracting 2.5 million tourists by 2016 narrowed down SLT leadership’s sight leading to a mental paralysis and caused it to lose sight of some aspects the broader national vision of SLT? The core elements of the SLT vision as enunciated in the Tourism Development Strategy 2011-2016 could be identified as:

A commitment to a sustainable tourism development strategy.
Protection of the environment.
Distribution of economic benefits to the larger cross section of society.
Positioning Sri Lanka as a model tourist destination.

Achieving the 2.5 million target therefore must not be in a manner that goes against the overall vision set for SLT. If short term gain becomes the focus at the cost of longer term sustainability and environmental damage it would not be in the economic interest of the larger cross section of society, nor result in positioning Sri Lanka as a model tourist destination. A must review for ‘good governance’ The new SLT tourism leadership must take into consideration the important reality that all tourism industry related goals beginning with the construction of hotel rooms, air access, transport and related tourism services are today been driven today by the 2.5 million by 2016. Let us be honest to ourselves, within the climate that prevailed none of us had the guts to publicly challenge the 2.5millon by 2016 target set by the political leadership. Imagine a situation where the arrival target is achieved but the elements of the vision are not achieved. Who will be responsible for an unsustainable industry leading to damaging the nation’s environment? As A.M. O’Reilly in his paper on the subject of ‘Carrying Capacity in Tourism’ notes the how the concept of carrying capacity has not been taken seriously by developers, whether public or private, especially in developing countries. This has resulted in many cases in overcapacity within the area developed for tourism, causing the destruction or near-destruction of historical landmarks and even the natural environment. Thus it is necessary for the concept of tourism carrying capacity to be included in the planning for tourism. The SLT development strategy indicates that a ‘carrying capacity’ study was to be conducted. Thus we may come to the conclusion that such a study had not been done when arriving at the 2.5 million by 2015 target. It is in the longer-term economic and environmental sustainability of the country to ascertain if the study as envisaged in the national policy document has been done. It is in the interest of good governance for the new leadership to look into matter and if not carried out to do so as a matter of urgency. Save Bali from its own success Newscom.au (11 June 2014) reports how Nyoman Sukma Arida, of Udayana University, has been warning for ten years that Bali tourism is approaching saturation, pointing to signs of environmental stress all over the island and that the government should urgently discuss how to save Bali from its own success. Could Sri Ganka in the longer term face a similar situation? Attracting high spenders Much has been spoken of attracting high spenders. But, who are the high spenders and how do we attract them? Has SLT given sufficient thought to that question? Cathy Schetzine, Director, Communications and Senior Research Analyst PhoCusWright Ink, points out that for destination marketers, travellers who have the flexibility to choose their own leisure destinations are the segment that is most attractive. Independent destination selectors she notes tend to travel more frequently than average, have a higher annual travel spend and are more likely to travel internationally. Blue7 Solutions differentiate leisure travellers as being classified into two categories. The non-discretionary travellers, whose external need such as events to be attended, a social obligation or visiting friends or family motivate travel. In such cases the destination to be visited, trip details and so forth become predetermined by the circumstances and cost could be a key consideration. Rapid increase in discretionary travellers – potential high spenders For discretionary travellers on the other hand the purpose of travel is considered largely self-aspirational. As blue7solutions group observe, discretionary travellers usually travel for adventure, relaxation, and togetherness. A discretionary traveller they identify as being a “prosumer” – who is an experienced holiday planner and understands how to plan the travel online using new tools and technology. Often the travel searches for a destination is driven by emotional and experiential desires. Destination selection is the most complex decision for a discretionary traveller. Though cost is important, it is not the only consideration. Increasing discretionary travellers Besides the reality that the number of discretionary travellers are rapidly increasing Caroll Rheen, writing on Empowering Inspiration; the future of travel search, refers to an important finding in their research (PhgoCusWrite 2012) which indicate that: n Among the developed world around half of them had specific destinations in mind to travel to and did not research options. n Among those within the developing world, though only one-third had specific destinations in mind, still around sixty per cent of prospective travellers had a few destinations in mind when they commenced their research. This scenario probably reflects the limited number of Web sites found to be used by prospective travellers to research destinations: USA 3.7, UK 4.0 with 37% using only 1-2), Germany 4.1 with 37% using only 1-2, India 3.6, Russia 5.2 and Brazil 4.2. Proliferation of brands and today’s challenge Neuroscience findings and in-depth consumer research have come to project the challenge today’s marketers face. Destination marketers need to give serious consideration to these realities. The proliferation of brands with the consumer being bombarded with an overload of communications is reported to have the impact of consumers restricting the number of brands in mind. Within this scenario as Taco Walvis (2010) a partner of the international brand consulting and communications firm THEY and former strategy and research director of BBDO points out, when we consider buying, we consciously compare only a limited number of brands in the ‘consideration set’ – considered in a buying situation. Studies on the size of a consideration set by LeBlank, Ronald p. and Niel C. Herndon, Walvis the average, consideration set (within a buyers mind in a buying situation) contain only one to five brands. A McKinsey consumer decision survey (2008) finding indicate that the number of brands within the initial consideration set of prospects in the USA for autos was 3.8, skin care 1.5, personal computers 1.7, auto insurance 3.2 and in Germany for telecom carriers 1.5. Tourists also have predetermined destinations in mind Within this scenario with all these destinations competing to attract prospective travellers an important finding placed before us by Pike (2005) calls for the attention of destination marketers. n “Studies have shown that of all the destinations an individual is aware of, they will limit serious consideration in the decision process to a small set of four plus or minus two destinations.” n “Destinations not positioned in the consumer’s decision set are therefore at a competitive disadvantage.” Destination branding and getting into the prospective travellers consideration set is a key aspect in attracting the high spending leisure travellers. We have the best mentality As with Ceylon Tea, where we claim to produce the best tea but still losing share, there appear to be some who consider that we have the best a destination could offer a tourist – the sea, our culture, nature, ancient heritage, etc. and that all we need to do is build the hotels and the tourists will flow in. However, the following message from Nigel Morgan, Professor of Tourism Study in Cardiff School of Management et al. writing on destination marketing projects the reality in the market place: n “Most destinations have superb five-star resorts and attractions, every country claims a unique culture, landscape and heritage, each place describes itself as having the friendliest people, and high standards of customer service and facilities are now expected.” n “As a result, the need for destinations to create a unique identity – to differentiate themselves from their competitors – is more critical than ever. Indeed, it has become the basis for survival within a globally competitive market.” n “Branding can be seen as the most powerful marketing weapon available to today’s Destination Marketing Organisations (DMO) – large or small – in their efforts to combat increasing product parity, substitutability and competition.” In the study of destination identity inspired by marketing discipline (e.g. Morgan, Pritchard et al., 2002; Hankinson, 2004) it is suggested that destination identity is even more important than image from a strategic point of view (Cai, 2002). This emerges from the view that the positioning and communication of destination brand need to be rooted in reality to fulfil promised experience to visitors (Hankinson, 2004). Destination marketing has changed course In the past, the marketing strategy for tourist services had focused not on the consumer but being related to the products on offer. However, the attention to the product offer has diminished owing to the diversity of consumer needs, desires, preferences, motivations and behaviour and the changing global realities. In the study of destination identity inspired by marketing discipline (e.g. Morgan, Pritchard et al., 2002; Hankinson, 2004) it is suggested that destination identity is even more important than image from a strategic point of view (Cai, 2002). This emerges from the view that the positioning and communication of destination brand need to be rooted in reality to fulfil promised experience to visitors (Hankinson, 2004). Thus the first challenge of destination marketers following a market review is considered to be the development of the destination’s unique identity – to differentiate itself from its competitors. Competitive identity The destination identity is the essence of the destination and therefore, its competitive advantage. Thus destination identity and strategy are now seen to be inseparable. At every point of communication (online, offline, exhibition/promotional stalls, or in person) the brand promise as incorporated in the brand identity, must be conveyed and reinforced (Morgan2007) Thus, according to Balmer and Gray, (2003) and He and Balmer (2007), corporate identity [reflected in destination identity] and corporate brand destination brand] are inseparable. (2010). Even ‘USA Tourism’ compelled to market itself Even the well-known nation, the United States of America, has come to appreciate that awareness of the country alone does not get itself into the consideration set of prospective tourists. As Kevin Sullivan reporting in the Washington Post: “So the United States is now doing what once seemed profoundly unnecessary: shelling out millions of dollars to promote America as an international travel destination. The Obama administration, in partnership with the travel and tourism industry, is spending $150 million this year [2011] part of it on a ‘Discover America’ campaign that includes television commercials in nine nations, ads on Tokyo subways, banners in London and Vancouver, Facebook pages in Portuguese and German and Tweets about the charms of the Dakotas.” For the first time in the history of the United States the Obama administration promulgated a national Travel Promotion Act in 2010. Since them the tourism marketing body has started actively marketing the brand USA as a premier travel destination. Indian example Amitabh Kant, credited to have headed the ‘Incredible India’ campaign, writing on the India experience refers to the situation that existed before Indian Tourism adopted a strategic destination branding approach. Until 2002 India has had eighteen tourism offices abroad. There had been no positioning, common branding or clear precise message. Thus one foreign office called it ’Spirited India’; another termed it ‘Cultural India’ and the third ‘Unbelievable India’. He continues to observe that the clichéd visuals, such as saffron-clad sadhus in the Himalayas and rope-tricks performed amidst clouds, reinforced the traditional image of India rather than giving a the contemporary feel of a young nation and focus on a defined segment of the market. There was, he observes, an imperative need to differentiate India from other destinations in the world and the vision was to produce a clear identity, a unique brand, which would drive all, marketing strategies. It would pervade all forms of communication and stimulate the travel consumer’s behaviour and decision-making process to competitively position India in the global market place. Thus in 2002, Indian tourism launched the ‘Incredible India’ campaign. Sri Lanka’s destination competitive identity? There is an important distinction to be made between ‘nation branding’ and ‘tourism destination branding’. Simon Anholt, who is often erroneously referred to as the architect of ‘nation branding,’ in an interview with Sean Carey (AFRICA Aug/Set 2010) clarifies this for us. Anholt observes that people don’t change their views about countries – views they may have held for decades – simply because a marketing campaign tells them to. Thus, he observes that “the phrase I didn’t coin was ‘nation branding’, which seems to contain a promise that if a country doesn’t like a reputation, it can manipulate it using the techniques of marketing. This promise is a lie. Places are judged by what they do and what they make, not on what they say about themselves. So ‘nation branding’ is a wicked waste of taxpayer’s money and shouldn’t be tolerated.”i On the contrary, he observes that using advertising for tourism or investment or export promotion, by contrast is entirely different because you are selling a product or service to people who might be interested in buying it. SLT appears to have confused nation branding (which Anholt said is a waste of time) with tourism destination branding, which is critical to the success of SLT. It is surprising that the SLT development strategy document makes no mention of this vital subject – destination branding. The strategy document speaks of positioning Sri Lanka as the world’s most treasured island for tourism. However, in another section of the same document it indicates that the country tagline would be ‘Wonder of Asia’; that in tourism promotion the emphasis is more on the fact that Sri Lanka is a natural wonder. A study of all successful destination-branding strategies indicates how they have all originated through the respective tourist destinations marketing strategies and not through nation branding approach, which Simon Anholt states is a wicked waste of taxpayer’s money and shouldn’t be tolerated. Morgan, N (2004) uses New Zealand as an example of a place that started with tourism-led marketing initiative, and that is at the leading edge of destination marketing. Closer home the Indian, Singaporean, and Thailand campaigns all fall within that category – tourism destination branding and not nation branding. Press reports then provide different interpretations. A report relating to a presentation made by an official of the SLTDB in Thailand identified authenticity in relation to the 2,500-year history as its primary attribute of the destination. A report on the promotion carried out in India reported that the objective had been to position Sri Lanka as the most sort after destination. The highlight in a report on a promotion conducted in the USA appeared as the 20 million smiles that would greet a visitor on arrival in Sri Lanka. (Google ‘nation of smiles’ and you get Thailand.) Open up the SLTPB website and try to ascertain how many different identities get thrown up: ‘Sri Lanka – Wonder of Asia,’ ‘Sri Lanka – One Island. Many Worlds,’ ‘Paradise Sri Lanka’. We then had the shocker, the launch of a SLT promotion song, ‘Welcome to Paradise’. As Sergio Zyman (1999), former Chief Marketing Officer of Coca Cola points out; if you want to establish a clear image in the minds of consumers, you need a clear image in your own mind. Specialists note the shortcoming The need for SLT to focus on strategic destination branding has been pointed out by key tourism personalities who have visited Sri Lanka very recently. Obviously their judgment would be based on their level of professionalism, hands on experience and their observation on the SLT situation. Among them were Derek Jones, Kuoni Managing Director UK (Daily FT 20 October 2014). In summary Jones observes the important reality of how competitive the leisure travel market is and that Kuoni itself sells to 88 destinations around the world so there is a lot of choice for outbound customers. Thus his conclusion is that each destination has to find its own unique selling point. In fact the Secretary General of PATA too had made a similar observation during his visit to Sri Lanka a few months ago. FutureBrands South East Asia CEO Sara Reiter had emphasised on the need to focus on one aspect of the country without talking about everything it has and that Sri Lanka needs to understand what its attributes were that would identify itself with travellers globally. (Financial Times of 24 February 2013) Avoid commoditising the destination Thus taking the lesson from Ceylon Tea, SLT needs to prevent the commoditising of the destination and thus being negatively impacted by the bargaining power of the foreign travel agents and dependant on price conscious tourists. World Tourism Organization and European Travel Commission publication ‘Handbook on Tourism Destination Branding’ (2009) projects the reality: Too often countries fail to identify their core brand personality as a result of:

Political pressure
Short-term commercial interest or,
Just because they are caught up in whirlwind of everyday business.

This risks commoditising a destination and leaving it vulnerable to the first wave of a recession. It is therefore important that all stakeholders understand both the role of a destination brand as a competitive identity and the need for a single-minded approach based on the destinations greatest strengths”.ii Footnotes i new Africa of August/September, 2010. Interview with Sean Carey pg 95,96 ii World Tourism Organisation and European Travel Commission, Handbook on Tourism Destination Branding, 2009 –To be continued [The writer, a past President of the Sri Lanka Institute of Marketing, has been associated with Sri Lanka Tourism (SLT) in an honorary capacity since 1999 when he facilitated the first-ever joint effort by the Sri Lanka Tourist Board and industry stakeholders to develop a marketing plan for SLT. In 2001 of his own initiative he developed a marketing strategy for SLT including a destination brand strategy. Though the proposition was adopted in 2006, he was sorry to see it change course in the implementation phase.]