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the industry moving. We have been behind for about 30 years due to the war, so in that sense, there is still lot of work to be done in at least three key areas.
In my view, we need a strategic long-term master plan. In 2010, it was too premature to do so, and now since we have seen the growth and potential in the industry, the master plan has to be formulated with input from all stakeholders. The key is also not to be too confident. When the country was shut from normal tourism traffic for three decades, given the conversion of the negative publicity to positive publicity, there was a boom which we saw from end of 2010. However, the growth cannot be sustained at the same percentage and we should not get carried away with the current growth rate. So a master plan is imperative.
In that context, my view is that from a distance, quality and quantity in terms of rooms and skilled labour will be two major problems. I still think there is room for removing further barriers to ensure that there is a seamless process of helping potential investors to operate. The Government has done well in the recent Tourism & Travel Competitive Index Worldwide where we rank at the 11th position. So the Government has to be commended for that.
Nevertheless, I still stress that there is more work to be done.
Q: Could you elaborate on the targets that you think are unrealistic?
A: I think 2.5 million tourist arrivals by 2016 is an unrealistic target. Last year we achieved two landmarks, where we reached one million tourist arrivals and US$ 1 billion income. That is very good, but in a nutshell what we are trying to achieve is to increase that by double within the next three years, and that can’t happen. If you do things fast, without principles of sustainability incorporated into the master plan, we may be killing the goose that may be laying the golden egg. The same goes for price for pricing strategy. We should not get too optimistic and leapfrog. It’s time to set a strong foundation in a sustainable fashion.
Q: So what do you think about the target of having 45,000 rooms by 2016?
A: There are various estimations made by different people in the industry, but I feel that we should be looking at the nights spent per tourist rather that the number of arrivals. Basically it is the average stay that is important. Historically Sri Lanka has maintained about nine nights per tourist, which is excellent. However, that will change with the market mix. For example, if tomorrow we get 10% more Indian tourists, the average stay will go down.
Based on the information I have, I estimate that the current 10 nights spent will go down to about eight and eventually settle at about seven nights. So in that context I don’t think we need 45,000 rooms by 2016, we are not ready for that. If you analyse all the projects that are in the pipeline, we are not going to get that, and I also don’t think that such a number is needed.
My calculation is that if you have to reach two-and-a-half million, and assuming that the average stay will come down to about seven days, we will need about 39,000 rooms. But I think by 2016, we will probably have about 33,000 rooms, and if we have that, achieving about 1.9 million tourist arrivals by 2016 will be possible. In the scenario on how might post war Sri Lanka develop inbound tourism, balancing is the key. You must balance the cultural aspects. The vision put forward by the political leaders is great, but it should come with realistic targets. We have to be optimistic but at the same time we have to be practical.
Q: How would you rate the quality of service in Sri Lankan hotels?
A: I was always impressed with the hoteliers in Sri Lanka. In the context of the war, they managed well and maintained good standards. However, these standards are not good enough now. We were looking at generating revenue per capita of US$ 16 and now it is US$ 117, and we are hoping to increase this to about US$ 180 in a few years’ time. The moment you become optimistic about the price, there will be an impact on the product, which has a lot of variable elements. The product, in that context has to improve.
If you look at the hotel stock of 22,260 currently, 30% are in the non-hotel segment, in what we call the informal sector. So that is not bad, since in tourism you have to cater to all different segments. The Government is promoting home stays, which is great since we must get the local community involved as well, but it is 30%. Out of the other 70%, which are in the hotels, only 28% are in five, four, and three star category. That is very low. With our vision to be the premier destination in South Asia, I ideally think that we need to target to have 50% of our room stock, where at least 29,000 should be in these three categories.
Q: Let’s talk about the supply of labour to service these rooms?
A: If you look at the labour situation, if we have 39,000 rooms, we will need 100,000 employees in the industry. Taking into account the current statistics released by the Government, labour in the industry is standing at 57,000 so there will be a short fall. So we are looking at about 43,000 skilled labour output within the next four years.
The institute which is one of the main organisations providing skilled and trained professionals to the industry can produce a maximum of 1,800 per year. So in the next three years, they can produce about 5,000 professionals at most. Out of the needed 43,000 professionals, the industry will be still short of 37,000 people to service these hotels.
All the private providers of hospitality education are basically very small at the moment but we are seeing new initiatives coming up to establish new schools. This is a major problem. Unless there are practical ways of doing this within the context of that master plan, some very effective short-term activities should take place.
Q: What measures would you suggest to tackle this problem?
A: My suggestion for this is that we need to develop continuing education opportunities for current employees in tourism and hospitality sector to encourage higher certification and multi skill development. The concept of ‘on the job trainers’ should be reintroduced in hotels to train new employees. Amongst high school students, tourism and hospitality should be promoted as an attractive career option. For this, Sri Lanka should look at developing tourism infused curricula in secondary education and must look at ways to introduce a dual credit system for tourism and hospitality subjects between high school and post-secondary institutions. These are just few measures that could be taken to address this issue.
