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Re-assessment of tourism demand & supply in Sri Lanka during the crisis

Tourism is a strategically significant sector in Sri Lanka and is the third-largest export earner for the country. Further, the sector has a multiplier effect on the overall economic development of the country due to the generation of employment opportunities, increase in national income, and improvement in the balance of payments. However, 2019 and 2020 have been landmark watersheds in the tourism history of the country, with the unfortunate Easter attacks taking place in April last year and the Covid pandemic forcing the island nation to go under lockdown in late March this year. As a result, significant aberrations have occurred in the tourism trends across the destinations in the island, which would have to be taken into consideration which assessing future demand and associated proposal. 

For the assignment, ‘Consultancy for Tourism Demand and Supply Assessment in Sri Lanka and for the Preparation of Detailed Investment Proposals for Targeted Destinations and Market Segments’ IPE Global assisted the Government of Sri Lanka in preparation of the Sustainable Tourism Development Project (STDP) by generating a baseline of demand and supply data that provides a rationale for targeted public and private investments that will support the sustainable growth of the tourism sector. But the impacts of Covid crisis led to the inculcation of some critical additions to the plan.

 

Revised Post COVID Projection

Growth projection exercise was carried out initially for a stable/base growth scenario (business as usual) and stimulated growth scenario. The two scenarios would dictate phasing and prioritisation of proposals and projects eventually. However, a third low growth scenario was added which was indicative of growth projections under a more conservative scenario, particularly under the effects of unforeseen events or crises, like the Easter attacks (2019) and the more recent post-COVID-19 health crisis. While the current report attempts to estimates the likely impact of COVID-19 on tourist projections in the country, the estimation of precise impact of the crisis on the world in general and tourism industry in particular is impossible to gauge due to the unprecedented nature of the event. 

 

Way forward in response to the COVID-19 crisis

As the world emerges from COVID-19, as it surely will, investors will be looking to the Sri Lankan Government for a clear commitment to tourism as a driver of sustainable and economic development and recovery, especially in those areas that inevitably will have been hit hardest by the current crisis, in terms of failed  businesses, lost employment and increased poverty.For Sri Lanka, it is a time to take immediate measures to revive its tourist infrastructure and be ready to position itself in the market when international travels commence in the near future. 

The next 2-3 years will not be “business as usual” and there would be merit in reviewing options again towards the end of 2020. It is likely that to some extent the current crisis will change market perspectives, but the need for “natural” tourism will not diminish and might even grow, whether it involves sailing or surfing on the sea, watching wildlife in its natural habitat or having a traditional massage in beautiful surroundings.

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