SRI LANKA'S          EXPERIENCE           IN TOURISM MARKETING

                                                                                                                 -J.F.R.    Perera

                                                Performance of Sri Lanka's tourism industry

                  Organised tourism in Sri Lanka was institutionalised in 1966 and Sri Lanka experienced  16 years of rapid
           expansion of its tourism sector between 1967 and 1982. Arrivals increased at an average annual rate of more than
           20 per cent, reaching a level of 407,230 in 1982.

                   The tourism sector was severely affected by the ethnic violence in mid-1983 and subsequently both by the
           long-running ethnic conflict in the North and East of the island and due to insurrection activities which took place in
           areas closer to the tourism operations on the West and South coasts.         As a consequence,      international tourist
           arrivals fell each year from 1983 to 1987, when there were only 182,620 arrivals.       In 1988 and 1989, the level of
           arrivals was the same as 1987.

                   The end of insurrection activities and the greater awareness in the European tourist markets that the ethnic
           conflict in the North and East did not affect the tourist operations, resulted in restored confidence in Sri Lanka. There
           was a major recovery with tourist arrivals up by 61 per cent to 297,888 in 1990.

                  The recovery was held back in 1991 by the Gulf War and global economic recession. However, the increase
           of 6.7 per cent during that period was higher than in most other South Asian countries.

                   A strong recovery took place in 1992, though there was a marginal drop in the following year.recorded
                     an all-time high of 407,511 in 1994 and in 1995, there were 403,101 arrivals.

                  The growth in the supply of graded tourist accommodation has matched the rise in tourist arrivals during the
           whole 29-year period. There was one room for every 31 tourist arrivals in 1967 and one for every 36 arrivals in 1995.
           However, during the period of most intense growth in tourist activity in the late 1970s, the supply of new rooms
           lagged. Due to this lag in the supply, accommodation capacity continued to rise while arrivals declined from 1983 to

                      Lanka's tourist flow is characterised   by a pattern of seasonal fluctuations.

                 The main season is November-March/April with peak arrivals in December. There is a secondary peak inJuly/August,
                         a shoulder period in September/October and a low season in May/June. The reason is partly the
           seasonality of the West Coast, with its monsoon period from late May to July, and partly because Sri Lanka hastraditionally
                       attracted European tourists during their winter season. Recent years have seen an increase in summertravelling
                     as the short-haul European tourists have been attracted into taking long-haul holidays.

                  The average length of stay of tourists in Sri Lanka has been about 10 to 11 nights throughout the past threedecades,
                     with occasional exceptions. An average stay of 10.0 nights was recorded in 1995. West Europeans stay
           longer than the average. Nor1h Americans and Australians also record above average stays. By contrast, Asians
           make shor1er visits to Sri Lanka. The Japanese have a par1icularly shor1 average stay of 5 nights, as a result of the
           large propOr1ion spending one-night transit stops in Colombo en route to and from Maldives. The purpose for visits
           by foreign tourists is predominantly pleasure (holiday). About 80 per cent visit for pleasure, while business visitors
           account for about 15 per cent.

                   Colombo International Airport was the main port of arrival for 99.9 per cent of arrivals. Less than 0.1 per cent
           arrived by sea. Prior to the unrest, it was typical for 8 to 9 per cent of tourists to arrive by sea, with the majority being
           ferry passengers travelling from South India. Charter air services are significant, previously accounting for about
           30 per cent tourist arrivals. However, since 1989 the percentage has been significantly lower, with only 8 per cent in
           1995. Of approximately       32,487 charter arrivals in 1995, the majority were British (29 per cent), Germans (19 percent),
                  Italians (16 per cent), Finns (8 per cent) and French (7 per cent).

                                                  The changing       international   visitor   market

                 Western Europe is the main region for tourists to Sri Lanka, accounting for as many as two-thirds of arrivals in
           the early 1980s and still comprising over 60 per cent. Asia is the second largest regional market. Its share is
           growing and now exceeds 30 per cent. North America's market share is about 4 per cent.


              The most significant feature in the pattern of market development in 1995 was the consistently high increase
      in tourist arrivals from the United Kingdom. A total of 63,582 was an increase of 33.1 per cent over 1994. Another
      market which has performed extremely well was India with an increase of 8 per cent.

             Germany is the largest tourist market. Arrivals of German residents in Sri Lanka over the past years has
      followed a four phase pattern: very strong growth between 1975 and 1981 when arrivals increased almost six-fold;
      a slump from 1982 to 1989 when arrivals fell every year, except 1984; recovery up to 1993 and a slump during the
      past two years. There were 95,430 German arrivals in 1993 and the current declining trend is a matter for concern.
      Despite the fluctuations, Germany has consistently been Sri Lanka's largest European market over the past three
             France and Italy are also important European markets and they have both shown a marginal increase in 1995.
      Other important markets from Europe are the Netherlands and Sweden.

             In the Asian region, India dominates with Japan second. The sensitive nature of the Japanese market is clearfrom
           past trends, and in 1995 it recorded a decrease of 7 per cent. There were significant improvements in trafficfrom
           Pakistan, Hong Kong and Taiwan province of China. In the North American region, arrivals from the United
      States were down by 14.7 per cent, while Canada showed a modest increase of 11.2 per cent. Australasia as awhole
            declined by 14.8 per cent.

                                       Development      and promotion      of tourism     in Sri Lanka

            The policies of the government in promoting tourism can be summarized as comprising seven main points.

             (a)     The Government,   recognising the significant contribution that tourism makes to social and economic
                     development of Sri Lanka, has accorded high priority for tourism in its overall programme of national

             (b)     Apart from the obvious economic advantages             of tourism,   the   Government   also   recognizes   the
                     socio-cultural and political benefits that can accrue.

             (c)     The Ten-year Tourism Master Plan (1992-2001), prepared by the World Tourism Organisation        (WTO)
                     with funding assistance from UNDP, will serve as the blue-print for tourism development up to the tum
                     of this century, with appropriate modifications to suit changing circumstances.

             (d)     The Government also recognises the importance of promoting domestic tourism, not only as a means
                     to enhance the quality of life of the people, but also as a vital necessity for national integration of
                     people living in isolation due to geographic and ethnic barriers.

             (e)     However, the Government is conscious and mindful of the potential adverse effects that uncontrolled
                     and unplanned tourism development can have on Sri Lankan society and the physical environment.
                     Accordingly, the corner-stone of the Tourism Development Policy will be planned, coordinated     and
                     sustainable development.

             (f)           pace of tourism development over the five-year       period 1995-1999 will be moderate, neither too
                     high nor too low, as recommended       in the Tourism       Master Plan, by taking into consideration   the
                     socio-cultural and environmental absorptive capacity.      This will help to optimize the economic benefits
                     of tourism, while at the same time minimizing potential     adverse impacts on Sri Lankan society and the

             (9)           policy of mobilizing the private sector to invest in tourism projects and operate tourism enterprises
                     will be pursued with greater vigour in line with the free-market economic policies of the Government.

            The Government will follow the main recommendations     of the Ten-year Tourism Development Plan (1992-
      2001) for development of tourism, with modifications as deemed necessary. The Plan has set definite targets for

             (a)     to increase tourist arrivals from the 1992 level of 394,000 to 874,000 by the year 2001, with an average
                     annual growth rate of 9 per cent;

             (b)     to increase foreign exchange earnings from the 1992 level of US$ 201 million to US$ 706 million by
                     2001, an average annual growth rate of 15 per cent;

             (c)     to increase hotel accommodation  capacity from the 1992 level of 10,200 rooms to 17,600 rooms by
                     2001, an average annual growth rate of 6 per cent; and


            (d)      to increase total employment, both direct and indirect, from the 1992 level of 69,000 jobs to 137,000 by2001,
                             an average annual growth rate of 8 per cent.

            The Government believes that the targets are realistic and attainable and is working towards their attainment.However,
                with the improvement in the security situation with the restoration of peace and stability, a boom in tourism
     is expected and hence a re-adjustment of the targets will be required.

             The tourism product programme is designed to encourage the private sector by providing fiscal and other
     incentives to undertake activities such as refurbish existing hotels, start new hotel development projects and establish
     tourist restaurants and develop tourist recreational facilities. The new hotel projects already approved has resulted inexceeding
                 the room requirement for the year 2001.

           The objectives of tourism marketing and promotional activities are: (a) to consolidate market growth in thepriority
            tourist-generating markets of Europe and Asia by servicing the travel trade and by further raising consumerawareness
                 and (b) to create consumer awareness and the desire to travel to Sri Lanka in the secondary andopportunity
                 tourist markets.

           The selected priority markets for promotional activities have been identified as: (a) the primary markets ofGermany,
               the United Kingdom, France, Japan and India; (b) the secondary markets of Italy, the Netherlands,Belgium,
              Denmark, Sweden, Austria, Switzerland, Russia, Singapore, Hong Kong, Thailand, Republic of Korea,China
           and South Africa; and (c) the opportunity markets of Spain, Eastern Europe, the United States of America,
     Canada and Australia.  Each of these markets will have different degrees of emphasis in terms of required marketingactivities,
              depending on the degree to which Sri Lanka is already an established destination.     There is a need for
     awareness of Sri Lanka to be raised particularly at the consumer level and point-of-sales.

           The Board is represented through its offices in Frankfurt, Paris, London, Japan, Thailand and India. It is
     proposed to appoint Marketing Services Agents in Singapore, Hong Kong, Australia, the United States and SouthAfrica.

             There are a number of promotional activities being carried out by Sri Lanka. Servicing of tourist information is
     a continuing activity which includes distribution of literature to the travel trade and to the consumers and servicingtelephone
                  and mail inquiries on a continuing basis. The Board participates in a number of major tourism fairs heldannually,
                 along with Air Lanka (the National Carrier) and the Sri Lanka Travel Trade. This is considered an effective
     means to promote the travel trade as well as to attract consumers.        Among the major trade fairs where Sri Lanka
     participates are: ITB -Berlin,    WTM -London,      BIT -Milan,  BTF -Brussels,     TRAVEL -Singapore,   JATA -Japan,
     FITUR -Madrid,       HOLIDAY TRAVEL SHOW -Sydney,            GIFT -Guangzhou,      TOP RESA -Dauvilli,   SMTV -Paris,
     LTE -Hong Kong, SATTE -New Delhi, KOFFA- Seoul and VAKANTIE -Utrecht.

              Regular presentations   on Sri Lanka are made to major tour operators and travel agents in the form of
     seminars and workshops to educate and inform them about tourism in Sri Lanka and to induce them to sell Sri Lanka
     by offering tour programmes.      With the help of the national carrier (Air Lanka) and other airlines, educational and
     familiarization tours to Sri Lanka are organized as a continuing activity to enable trade and media personnel to obtain
     first-hand knowledge and experience of Sri Lanka's tourism product. These programmes are conducted for the travel
     trade as well as for the travel media. Travel journalists, writers, television, broadcasting and film producers will be
     given high priority in order to obtain maximum publicity for Sri Lanka's tourism in the key media in major tourist
     generating markets.      Special promotions in the form of cultural and food festivals, Sri Lanka Evenings, etc., are
     undertaken in the major generating markets, in association with Air Lanka and the travel trade.

                            New trends       in tourism   marketing    policies   and strategies   in Sri Lanka

             On the basis of research undertaken by the Ceylon Tourist Board and the World Tourism Organization (WTO),
     it has been revealed that there is a tremendous potential in developing tourist markets in the Asian region. This has
     resulted in a change of the tourism marketing policy to consider Asia as a major generating market for Sri Lanka, inaddition
              to Europe.    To pursue the change in marketing policy, the Ceylon Tourist Board has developed an Asian
     Marketing Strategy for Sri Lanka with the assistance of WTO and UNDP. Several markets in the Asian region have
     been identified with three priority groupings. The first priority is Japan and India. Between them, it is estimated that
     by 2004 they will be producing over half of all the Asian visitors to Sri Lanka. The second priority is the Republic ofKorea,
             Malaysia, Singapore, Taiwan province of China and Thailand. Travel from these markets to Sri Lanka can
     grow strongly   but on a lower scale.    The third priority is China and Hong Kong.

            The marketing programme of the Asian Marketing Strategy has been divided into two phases. Phase 1 is the
     period until the end of hostilities in Sri Lanka. It is assumed that this will be in December 1997. Phase 2 is a peace-
     time marketing programme that will be introduced by a marketing campaign.


             It has been shown that the prevailing situation of tourism in Sri Lanka is partly due to the security situation and
     partly due to misconceptions     and disinformation  about the image of Sri Lanka. The negative image of Sri Lanka is
     due to the wide publicity given by the international media about the civil disturbances and acts of violence.        In order
     to counter the misconception,    the Sri Lanka Government will launch an Image Restoration Campaign on a sustained
     basis for a minimum period of two years by means of a public relations and communication campaign supplemented,where
             necessary, with limited advertising in the key international markets, by using the services of a profes$ional
     public relations firm with an international network.

             The current trend in international travel is for tourists to be attracted not so much to a destination,  but to
     specific tourist products.  The Ceylon Tourist Board has identified this significant development and is planning to
     develop specific tourist products to which international travellers could be attracted.   Sri Lanka in currently in the
     process of developing several tourist products.

            (a)    Indigenous Medical Treatment Facilities (Ayurveda) will be made available to tourists. Currently,
                   several hotel operations in Sri Lanka have upgraded their products to provide these facilities.

            (b)    Sri Lanka has already undertaken a study with the assistance of the WTO/UNDP to develop
                   ocean-based recreational facilities taking particular advantage of the unique marine attractions of
                   Sri Lanka.

            (c)    It is proposed to develop down-town tourist shopping facilities   that are duty free.   This is considered   to
                   be an important attraction for South Asian travellers.

            (d)    Sri Lanka has already undertaken a study for the development of the local handicraft and souvenir
                   industry.    It is pertinent to mention that Sri Lanka has a historical tradition of a unique handicraft
                   industry. The study suggests action to be taken to develop this industry as a significant attraction for
                   foreign visitors.

            (e)     Development of land-based recreational facilities is being considered. The Government of Sri Lanka
                   has already approved the development of three large golf courses as a major attraction for Japanese
                   tourists and other Asian travellers.

             (f)   Archaeological    sites will be further developed. Ancient cities of Sri Lanka with a history of over
                   25 centuries are a major tourist attraction. The Government has now undertaken further development
                   of the archaeological   sites with new excavations and other findings of antiquity.  In addition, greater
                   interest is taken to protect and maintain the archaeological sites for posterity and as an attraction to
                   foreign visitors.

             Sri Lanka is currently spending nearly 60 per cent of its marketing budget on the maintenance of its foreign
     offices. It has now been revealed that obtaining the services of public relations and marketing agencies in place of
      permanent offices would be more cost effective for tourist promotion. Accordingly, Sri Lanka is proposing to entrust
     tourism promotion in the major markets of Europe and Asia to recognised public relations and marketing companies
     as an alternative to opening offices of the Ceylon Tourist Board.

              Studies undertaken by the Ceylon Tourist Board have revealed that participation in travel consumer fairs are
     as equally significant as participation in trade fairs.    It has been the experience of the Ceylon Tourist Board that
     participation in consumer fairs would result in direct communication with the consumers and would provide opportunities
     to familiarize them with the attractions of Sri Lanka and they could be induced to be potential visitors.

            The marketing outlays necessary to establish overseas marketing outlets and to undertake an effective
     promotional programme as outlined above will be about of Rs.250 million ($US 5 million) a year over the next fiveyears.
             However, the Government has been able to grant only about Rs.65 million a year for these activities. It is,therefore,
               proposed to set-up a Tourist Promotional Cess Fund with contributions from the private sector travel trade
     to supplement the budgetary resources made available by the Government.

                                Outline of aviation policies related to the tourism industry

           The objective of the government's      economic policy is to build a strong national economy with a market
     framework.   The development of civil aviation will accordingly, take place within an environment of a free marketeconomy,
                moving away from earlier policies based on protectionism and regulation.

            The government recognizes the fact that air transport is going through a period of dynamic change as aconsequence
                     of increased competition, the emergence of regional economic groupings, privatization and the introduction
     of new liberalized global trading arrangements.    Continued participation in international air transport is a necessity for
     Sri Lanka's trade, commerce and development needs.


             Colombo's position at the centre of the Australia/Europe    and Japan/Africa corridors has great potential. The
     government will try to make Colombo a hub for this traffic on the East-West route. Since tourist traffic will continue to
     form the larger proportion of air traffic to Sri Lanka until Colombo becomes a business centre, the national carrier will
     work in close cooperation with the Ceylon Tourist Board. In recognition of this close inter-connection       between air
     transport and tourism, the Government of Sri Lanka has brought both aviation and tourism under one Ministry.

            The government has set out the aviation policy to be pursued with the objective of meeting the national and
     international requirements of Sri Lanka's aviation industry with the following elements:

            (a)     Sri Lanka will move away from protectionist         policies and regulation    to a policy of managed   liberalised

            (b)        move away from protectionism and towards liberalised access to scheduled airlines operations will
                    be provided under a Bilateral Air Services Agreement, and reciprocal traffic rights which are exchanged
                    by observing   the principle   of fair and equal opportunity.

             (c)    Charter operations   will be permitted according to charter regulations.

             (d)    The national carrier will operate in open competition        with other scheduled     carriers.

             (e)    Sri Lanka will follow more vigorously the ongoing negotiations on the subject of linking the capitals of
                    South Asian countries and pursure the policy of regional cooperation in aviation matters in the form of a
                     regional block or Asian community      in keeping with the current global trends in aviation industry.

             (f)     Steps will be taken to improve the facilities    at the Colombo    International   Airport.

             (9)    Taking note of international    requirements,    an alternate airport will be constructed.

             (h)    To improve domestic aviation, it is intended to give the private sector every encouragement                     and
                    suitable facility to operate domestic airlines in a free and a competitive environment.


            Three decades of organised tourism in Sri Lanka have been characterized by periods of rapid expansion and
     temporary setbacks.  A characteristic feature is that in spite of the civil unrest since 1983, the industry has shown
     great resilience.   In 1995, tourist arrivals exceeded the 400,000 for the third time.



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