May 25, 2015 (LBO) – Sri Lanka’s new rulers say that the Indian Ocean Island will open skies as a way forward policy to improve tourist arrivals.
“We’re going to have an open skies policy that will help tourism and also help grow the business to other countries,” Ravi Karunanayake, Minister of Finance said, at a hospitality investemnt conference held in Colombo.
“This is the way forward,”
He said the government’s tourism statergic master plan aims to attract three billion US dollars in foreign direct investment from the tourism industry in the next five years.
Sri Lanka’s policymakers are banking on tourism to be one of the lead sectors to push economic growth after the end of a 30-year war. Several airlines have increased frequencies to Colombo.
Official data shows that aircraft movements rose to 34,092 in 2010 after dipping to 28,624 in 2009 at the height of the war. From 2006 to 2008 aircraft movements had been around 33,000 a year.
Reflecting the increase in tourist arrivals in 2014,air passenger movements increased by 6.9 per cent to 7.8 million during 2014 while transit passengers declined by 0.3 per cent to 1.2 million,the Central Bank annual report data showed.
Sri Lanka has two state owned airlines, Srilankan and the budget Mihin airlines.
SriLankan Airlines (SLA) suspended its services to and from Mattala Rajapaksa International Airport from February 2015 while the airport is expected to provide minimal services due to lack of demand. By end 2014, 23 international airlines (including SLA and Mihin Lanka (ML)) served Sri Lanka while eight domestic airlines were in operation.
International air traffic is governed by bilateral agreements, which are negotiated on a reciprocal basis.
However, the National carrier has been running large losses, especially after breaking links with then managing shareholder, Emirates while budget carrier which has also lost billions of rupees and eaten up people’s taxes in capital injections.SriLankan has lucrative monopolies in ground handling and catering in Colombo’s main airport.
Sri Lanka’s tourist arrivals rose 19.8 perecnt over 2013 to 1,527,153 in 2014.
Arrivals rose 18 percent from a year earlier to 157,051 in March 2015, with Western European arrivals recovering after a lull during election in the island and China performing strongly, official data shows.
Karunanayake also said that tourism will help to curb the gap in balance of payments in Sri Lanka.
“We want tourism to be frount runner in providing a solution for the balance of payment issue,” Karunanayake said.
“Also we want Sri Lanka to be explored,”
“When we took over early this year, what we saw is that some of the European travelers were reluctant to come here,”
“But with the new government there is a favorable picture for Sri Lanka around the world.”
Sri Lanka’s tourism earnings grew from 1,715 million US dollars in 2013 to 2,055 million US dollars in 2014.
Per tourist spending in 2013 was 156.5 US dollars rose slighly to 160.8 US dollars in 2014.
Growth in the Western European market which slowed to 11 percent in the peak winter season month of January amid Presidential elections in Sri Lanka recovered to grow 27.4 percent to 57,094 in March, data shows.
Sri Lanka targets to attract about 2.5 million tourists in year 2016.
However travel sector experts say the island is yet a having issues coping with large influx of travelers as there are shortages of skills in the industry as well as a room.
In 2014 room capacity stands at 18,721 rooms but needs to be increased to 47,512 rooms by 2016 if Sri Lanka is to meet the expected target of 2.5 arrivals by 2016, the torurism board official said.
However, industry critics say it is not exactly clear whether Sri Lanka gets the targeting arrivals even if the industry increase the room capacities.