Sri Lanka’s tourism industry looks to India for growth: OBG

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Increased access for air travellers, stronger advertising campaigns and enhanced bilateral cooperation are underpinning Sri Lanka’s push to expand its foothold in one of the world’s largest potential tourism source markets – India, the Oxford Business Group said in a report.

Both private sector players and public officials in Sri Lanka see the country’s northern neighbour as a key source of growth in the coming years, central to increasing foreign arrivals beyond 3m a year by 2020.

India is already its leading source of overseas visitors, accounting for more than 17.4% of inbound traffic in 2016, according to the Sri Lanka Tourism Development Authority (SLTDA).

Last year visitor numbers from India reached more than 356,000, up 12.8% on 2015 and almost triple the figure from 2010. While in the first half of 2017 such arrivals stayed roughly even with those of the same period last year, the SLTDA projects the full-year figure will equal or surpass last year’s record.

In the first six months of the year overall tourist footfall managed to grow 4.8% year-on-year to 1m, despite a partial closure of the international airport in Katunayake for maintenance, which disrupted flight services in May.

On trend, Sri Lanka may struggle to achieve the SLTDA’s goal of 2.5m overseas tourists in 2017, though recent results put the industry well on its way to surpassing last year’s 1.8m and close to breaking the 2m barrier.

Open skies to open doors for local and international carriers

To reach its short- and medium-term targets, Sri Lanka is making it easier for visitors from India and other countries to visit. The government is considering expanding its open sky policy to allow international carriers to fly Sri Lankan routes without restrictions.

Some open sky agreements are already in place, one of the first being a deal brokered with Japan in 2012, and Sri Lanka is looking to replicate this with other countries.

In December the country signed an open sky agreement with India, allowing local carriers unlimited access to six Indian hubs – Delhi, Mumbai, Hyderabad, Kolkata, Bengaluru and Chennai – as well as giving Indian carriers greater access to Sri Lankan routes.

SriLankan Airlines is steadily expanding its network into the subcontinent. In July it added three new routes, to the South Indian cities of Visakhapatnam, Hyderabad and Coimbatore, expanding its flight service footprint to 14 destinations and 126 flights per week. “India is a market with the utmost potential for Sri Lankan air carriers,” Ajith Dias, chairman of Sri Lankan Airlines, told OBG

Facilitating air travel should help foster tourism growth; around 98.7% of tourists arrived in the country by air last year, with the remainder arriving by ship.

Joining forces with India to boost arrivals

Officials hope that deepening ties with India’s tourism industry will further strengthen arrival numbers. Under a new joint initiative with India’s Kerala state agreed in mid-July, the two countries are working to broaden the range of attractions on offer in a bid to keep holiday-makers in the region longer.

“Tourists do not stay in one place when on vacation,” Arundika Fernando, deputy minister of tourism development, told local media. “If they come to Kerala, they travel to nearby places as well, including Sri Lanka. So we should be promoting each other to maximise the number of tourist arrivals to our destinations.”

The cruise segment in particular could benefit from greater cooperation, according to John Amaratunga, minister of tourism development.

“We are now actively promoting cruise tourism and trying to attract the big cruise liners to sail our way,” he told OBG. “To do this, economies of scale dictate that we need to work with the Maldives and India to be attractive to cruise companies.”

Key to this is stepping up marketing activities, with the Sri Lanka Tourism Promotion Bureau announcing plans in mid-July to double spending on advertising and brand awareness from $3m to $6m.

(Oxford Business Group: OBG)