The tourism institution merger was in the national budget in 2020 and the Cabinet paper was thereafter approved and this was in line with the President’s Manifesto to streamline and reengineer processes and make the public service efficient.
“The current tourism structure is counterproductive with wastage of resources whether financial and human capital. Having chaired all four institutions in the past 14 months, I have witnessed the wastage, lack of coordination among the tourism institutions and how inefficient this structure is,” Chairperson Sri Lanka Tourism, Kimarli Fernando said in response to the industry views against the merger.
“Previous governments too had attempted to merge the institutions. However, due to change in chairmen and having five chairmen in five years, projects like these were stalled.”
In 2006 soon after the 2005 Tourism Act, a detailed report was done to merge the institutions. Thereafter consecutive governments have attempted to merge the institutions for good reasons.
The current structure with fours institutions covering tourism cannot be considered a success, with only 2,500 odd hotels registered in Sri Lanka for over 20-30 years, while there are in fact over 20,000-30,000 unregistered tourism providers who are not supported at all. There is no safety net for SMEs.
“The private sector with majority board seats to date have failed to have an integrated global promotion since 2007. The only time a global promotion was successfully executed was when the board seats were reduced,” she said.
This structure has failed to develop domestic tourism, failed to use digital promotions, failed to position Sri Lanka, failed to reach the consumer; instead of focusing on going on travel shows spending nearly Rs 1 billion in 2019, that too not shared with all stakeholders nor ensuring that there is an acceptable return on investment. The tourism industry is not one or two associations with 200-300 members each, whilst they play a critical role, tourism impacts almost 3 million of our citizens who have not been represented nor their voice heard. Many vocal players in the Industry have failed to build sustainable tourism, some handing over their hotels to hospitals, demanding from the government for debt restructuring, many of whom were in financial difficulties before Easter Sunday and some continually complaining about the health guidelines. The reality is that Sri Lanka is well ahead in managing COVID19. Many countries in tourism are not open for tourists including Thailand, Indonesia, Malaysia, and Australia. The Maldives is unique with one hotel and one island which is not comparable.
The new ACT would be in line with Global Best Practice including Singapore which has one organisation with 19.1 million tourist arrivals in 2019 and Malaysia which had 26.1 tourists arrivals in 2019.
In the new act, the independent source of funding will be maintained, with an industry consultative committee that would be the voice of the complete industry. The main income for the tourism institutions is embarkation tax and TDL. Embarkation tax is paid by all arrivals including arrivals that came with booking on OTA’s.
“Post COVID we need to support all in the industry, position Sri Lanka to meet the post covid travellers expectations.”
Looking at the stakeholders in the industry it is apparent we have not been able to build a sustainable industry. We need to expect to face different challenges in the future. The industry has had to face terrorism for 30 years, tsunami, Easter Sunday incident and now COVID-19. We need to build an industry that is able to face future challenges.
There is a need to include the younger generation in tourism, those who are creating unique products and experiences, digital-savvy players, building brands and positioning Sri Lanka and move away from the 80’s thinking and embrace the new reality. Other key stakeholders such as the wildlife department, CCF and ICTA need to be included and partner tourism.
Currently, there are 36 board members with four institutions that at their height had only 2.3 million tourist arrivals.
That too many coming via OTA’s such as Airbnb, Booking.com, Expedia. Agoda etc, which is the unregistered and unrepresented SME segment. The current board is not representative of the industry nor what is needed for the future.
“Currently, we only have a working document for the new act which needs to be studied internally first and thereafter we will share with the complete industry and seek their feedback, to ensure what is enacted is good for Sri Lanka and tourism. In November 2020, the Secretary to the Ministry M. Hettiarachchi wrote to all stakeholders requesting their feedback. Only a few associations even responded. The very vocal associations seem to be concerned about having board seats. The question needs to be raised besides representing their 200- 300 members and enjoying board seats, what have they achieved for the country and our citizens? The merged institution will be in line with the need to build a people-centric economy and in line with global best practices such as Tourism Singapore and Tourism Australia.