Sri Lanka's Tourism Industry in the face of the Current crisis

Sri Lanka's Tourism Industry in the face of the Current crisis

Tourism has continued to develop and diversify over the past few decades and is now one of the fastest growing economic sectors in the world. International tourism arrivals increased to 1.4 billion in 2018 due to a strong global economy, technological advancements in developing. economies, new business frameworks, innovative concepts, and the attractiveness of the country.

Tourism is a very important sector of the global economy and contributes significantly to the world’s gross domestic product. Tourism is a major source of employment globally and is a labor-intensive industry. The supporting industries of tourism are accommodation, transport, catering, cultural, hospitality and sports. Sri Lanka has long been known as a popular tourist destination.  More than a hundred different types of wild animals can be seen with scenery comprising of mountains, forests, waterfalls, lakes, coastline, tropical climate, Buddhist heritage, culture, infrastructure and other attractions.  People here are friendly and helpful.

The tourism industry has suffered many crises.  Economic, social, environmental, health and political spheres have been severely affected.  faced by the tourism industry. The biggest challenges were the Covid-19 pandemic and the industry had come to a complete standstill.  Despite recovering after two years, Sri Lanka's tourism industry had to face challenges again due to the ongoing economic crisis.  Shortage of essential commodities like gas and petrol along with the foreign exchange crisis and rising prices have badly affected the tourism entrepreneurs in Sri Lanka.  Tourism businesses are facing a difficult situation in providing products, services and experiences to tourists.  The prices of essential commodities have gone up drastically due to reduced supply of goods and increased consumer demand.  Also, the business is facing challenging situations due to power outages in recent days.  could have given in this way, the businessmen engaged in the tourism business have to face some problems at present. The following are the common problems faced by entrepreneurs in the tourism industry.

1.     Communication and marketing

Communicating to people exactly what you do and how you do it through business without false advertising is an art. That art is marketable. Attracting new customers is more difficult than retaining existing ones. Communication and marketing with foreign tourists are even more difficult. Their communication and marketing should be as important as what they sell.

2.     Funding

Investors will expect returns, especially in highly competitive markets such as tourism. Making businesses financially successful in the first two or three years is also a very difficult task.  It is very difficult for tourism related entrepreneurs to offer successful products and services and generate sufficient financial strength for them in view of the current situation in Sri Lanka.  Also, entrepreneurs have limited knowledge and access to adequate financial incentives, grants, or funds.

3.     Finding the right people to join the team and unsupportive business partners. 

Enterprises find it difficult to recruit people who support the business vision, respect ideas, and have strong operational success that drives business growth. Then entrepreneurs are afraid to delegate tasks to partners. Also, success cannot be achieved if suppliers or business partners are not supportive or senior managers are not supportive of enterprise ideas.

4.     Taxation 

Tourism can be said to be a sector where governments are taxing heavily. Hotel rooms, air tickets, etc. will be heavily taxed. As a result, the prices of products and services provided by these businesses have increased. This situation will adversely affect the completion of these fields.

5.     Weak strategy or business plan

It is difficult to create a business plan that suits the capabilities of the enterprises and the lack of ability to create a successful strategy to implement the prepared business plan is a weakness in tourism related enterprises. Due to this, the enterprises are not able to move to the desired level.

6.     Unrealistic expectations

Thinking big is what successful entrepreneurs are good at. The challenge is that your idea might be ahead of its time, and your market not ready for it – which can lead to disappointment. To succeed, sustainability entrepreneurs in tourism need to be flexible and adjust expectations to the realities which surround them. Patience, energy, a sense for the right timing will get you there.

7.     Lack of infrastructure

Even if as an entrepreneur you have the knowledge, skills, and energy to implement sustainability solutions at your business or destination, you might find yourself slowed down by a lack of facilities and infrastructure.

8.     Security 

Security is a major issue in countries like Sri Lanka. Even the top-level business in tourism has failed to face this challenge. This is due to the lack of officers trained in tourism-oriented policing or security services within the police department.

However, it's important to note that the recovery of the tourism industry can be a gradual process, and it may take time for visitor numbers to return to pre-crisis levels. Factors such as global economic conditions, travel sentiment, and the overall recovery of the global tourism industry can influence the pace of recovery for Sri Lanka's tourism sector.

Additionally, it's worth considering that the information provided above is based on the situation up until September 2021. Since then, there may have been further developments and changes in Sri Lanka's tourism industry due to the evolving nature of the crisis. To obtain the most accurate and up-to-date information, it is advisable to refer to recent reports from official government sources, tourism boards, and international organizations involved in the tourism sector.

Lakshan Ravihara Abeywickrama

Final Year Undergraduate, University of Sri Jayewardenepura