The toll on tourism

Millions of Sri Lankans rely on tourism. But exclusive data seen by Reuters shows bookings have slumped since Easter Sunday bombings killed at least 253 people, many of them tourists. Family-run businesses are already struggling.

Tourism revenue has grown rapidly since the end of Sri Lanka’s 26-year-long civil war against Tamil insurgents in the north and east of the country ended in 2009.

Data from travel consultancy ForwardKeys shows that daily net bookings, bookings made on that day minus bookings cancelled on that day, significantly dropped immediately after the Easter bomb attacks when compared to the same period last year.

Analysing data from travel booking systems that record 17 million flight bookings a day, ForwardKeys found net bookings to Sri Lanka to be down 186% on average in the week following the attack, compared to the same period last year. Anything more than a 100% fall on any day indicates more cancellations than actual bookings.

 

The road to recovery

Prime Minister Ranil Wickremesinghe said Sri Lanka was confident that its critical tourism sector would recover from the setback. “Not only us, Egypt has gone through this, Bali had been through it. Tourism will recover, but it is unfortunate for the economy... we have come through many such incidents of terror and war,” Wickremesinghe said in a TV interview in Colombo.

The bombings in Kuta, Bali, were almost 17 years ago, but arrivals data shows that recovery in tourism took a year. Taking 2001, the year before the bombings, as a benchmark, the chart below shows the recovery period before reaching parity with pre-bombing arrivals. After attacks in Paris in November 2015 that killed 129 people, it took a similar amount of time for recovery when compared to the year before the incidents, although the decrease in tourists was less severe.

 

Deserted beaches

Cancellations are affecting the entire tourism industry, from luxury hotels to beach shacks. But it is family-run businesses and sole traders that are the hardest hit.

In Bentota, one of a string of beach resorts popular with backpackers on Sri Lanka’s south and west coasts, occupancy rates have plummeted, according to interviews with hotel managers. The situation for the tourism industry is even worse than during the civil war, some said.

Samanmali Collone, 54, runs the seven-room Warahena Beach Hotel in Bentota where rooms cost Rs. 10,000 ($ 56) per night. Her hotel had previously been fully booked for the day when Reuters visited on Thursday, but when news of the bombings on Easter Sunday emerged, all of her guests cancelled.

“There are no bookings: this week, next month, even in October, they have all cancelled,” she said, speaking in her deserted beachside restaurant where waiters polished glasses and rearranged tables, but without any sign of any guests arriving.

Her family built the hotel with the aid of a bank loan, and she worries they won’t be able to repay monthly instalments of around Rs. 60,000.

“We have had issues before but this is completely different,” she said. “Even before the war ended, we still got tourists.”

If the situation doesn’t improve, some of the 16 staff working for her will have to be let go, she added. Sri Lanka is popular with tourists from all over the world. Long haul travellers make up a large portion of visitors. Asia and Europe account for most of Sri Lanka’s arrivals.

India was the single largest source of visitors last year, with almost 425,000, while 266,000 came from China, Sri Lanka’s newfound friend, and more than 254,000 from old colonial power Britain.

 

Paying the price

A sustained collapse in tourism following the attacks on churches and hotels would deal a severe blow to the island’s economy. Tourism was Sri Lanka’s third largest and fastest growing source of foreign currency last year, after private remittances and textile and garment exports, accounting for almost $ 4.4 billion or 4.9% of GDP in 2018.

The country faces lost tourism revenues of $ 750 million this year, Tourism Bureau Chairman Kishu Gomes has said.

Tourism boomed following the end of the decades-long civil war, creating employment and mitigating the impact of high interest payments on the island’s debt, according to the World Bank. “Sri Lanka is a fast-growing tourist destination and the tourism sector could help accelerate poverty reduction as it is labour-intensive, requires relatively low investment, and thus holds great potential to create jobs for youth and women,” the World Bank said in its latest assessment of Sri Lanka’s economy.

Deserted beaches, empty rooms: Sri Lanka tourism takes a hit after bombings