Some niche markets to develop

by Mahendra Amarasuriya

The present serious economic crisis the country has fallen into cannot be overcome without the development of value added exports, tourism, and remittances from Sri Lankan expatriates, many of whom are very poor women who go in search of employment overseas in order to improve the lives of their families at serious costs to their own life and well being .Out of these the tourist Industry can be considered to be “one of the low hanging fruits” , the development of which has a great deal of potential, considering the wonderful natural resources our little country has, very attractive to tourists. Our country has only 65,000 sq. km. in land area but is an island possessed of some of the finest natural beaches in the world. In fact one of its famous beaches at Unawatunna was recognized as one of the best beaches in the world quite some time ago.

It also has a tremendous variety of agro climatic zones ranging from purely tropical at sea level and going up to over 6,000 ft, resembling a Mediterranean climate. There are many ancient cities going back to over 2,000 years and a recorded history and culture of around 2,500 years.

The tourist Industry does have tremendous potential which in my opinion has not been properly exploited in order to make maximum use of the varied and diversified resources available in this small but beautiful country.

Tourism was growing reasonably well, and had achieved arrivals of 2.33MN tourists in 2018, which I believe was the highest to date. Unfortunately, thereafter, the Easter Sunday massacre and the Covid pandemic hit us like many other countries and almost completely destroyed the tourist industry which plunged to 194,495 arrivals in 2021. We are now on a recovery phase with over a million tourists arriving to date in 2023, against I believe an amended target of 1.5 mn arrivals by end of this year.

However, in my opinion, it is the tourist guest nights that matter where income is concerned and of course the room occupancy rates. In 2018, the tourist guest nights amounted to 25,205. Gross tourist receipts amounted to 711,961 mn. SLR and per capita tourist receipts amounted to Rs. 305,066. Tourism also creates many employment opportunities and according to the Central Bank reports 2020/2022 , total employment in 2018 was 388,487 and in 2019 402,607 .

On this basis , the per capita income per tourist in 2018 amounted to Rs. 305,066 and in 2019 Rs. 337,755 . What should the strategy be for the future?. Are we intending to attract mass tourism with average or low spending tourists or make a serious attempt to attract the high end tourist clientele . I believe the Minister of Tourism is projecting to increase the arrivals to five million in a couple of years and the President has made a suggestion to target 10 mn. by 2030.

Sri Lanka being a relatively small country, though it has many tourist attractions in my opinion, should project for only a limited number to be decided upon by the authorities because the popular tourist attractions like Sigiriya, Anuradhapura and Polonnaruwa and the Wild Life Sanctuaries, especially Yala are over-visited with far too many tourists visiting for them to be sustainable in the long term.If we merely increase numbers of average and low-end tourists, we will only increase the footfalls at our main tourist destinations, which may not be able to sustain very large numbers without a parallel increase in our tourism earnings to develop these locations. In the long run, this may be an unsustainable strategy.

It is necessary to differentiate our tourist industry and target new niche markets which are easily accessible. Before I identify a few of them, we must accept the fact that such high-end tourist would not wish to spend time on our roads in traffic jams before they reach their destination. Travel time to the ultimate destination is of great importance and our roads are not up to the standards, that such tourist are used to.

Fortunately, we now have the express way to Colombo from the BIA, but after visitors arrive in Colombo, many are not interested in staying in the city but have planned to visit various well known tourist destinations. The travel time to get to them is far too long.

For instance, despite the Southern Expressway which can take you to Hambantota in about two and a half hours, it takes 45 minutes to one hour to entern the expressway from the Colombo City. There are other expressways planned, but we can hardly afford them in our present economic condition.

One way of getting over this problem, is to develop a network of domestic airports enabling travel to popular destinations directly from the BIA. At every tourist center, we should have an airport which can accommodation smaller aircraft. Many such airstrips are available. For instance, the one at Koggala which was used by the British during the war, can easily be used to service southern tourist locations.

There are also airstrips at Sigiriya and an SLAF base at China Bay near Trincomalee. There are airstrips at Weerawila and Sigiriya and of course the Mattala International Airport.A new airport will have to be developed for the Central Province. We already have Palaly in Jaffna. Developing airports to service popular tourist destinations can be carried out on a PPP (Public Private Partnership) basis and the private sector will definitely be interested in investing in such developments. If such a network is established, a tourist can fly from BIA to these destinations within hours of arrival and thereby not waste time on our poor road network.Let me now identify some possible niche markets….(1).

Golf Tourism

. Golf is a game played by the more affluent people in the world. Many of them are crazy about playing golf regularly. In popular golf playing nations like Japan, Korea, USA and some European countries, it is difficult for many people to get a game of golf, due to the high popularity of the game and lack of sufficient courses. I am told that some Japanese travel for more than two hours, just to get a game of golf. In this scenario, there are people who are willing to fly to new destinations, sometimes even for a weekend of golf.

To accommodate these golf addicts, we must try to promote the development of a golf course at every popular tourist destination for instance (1). Around Bentota , Galle, Hambantota already has a small golf course at Shangri-La hotel, Central Province has the Victoria Golf Course, and two more should be established, one in Batticaloa and one in Trincomalee.

With this net work of golf courses, golf tourists can easily be accommodated and they are high-end tourists . One may ask, where is the funding for such developments. Such funding should come from foreign investors and the BOI must be given a target of attracting such investments within a short period. It may also be queried as to why we need so many golf courses. It is because tourists at every tourist center should have the use of a golf course. Interestingly, Singapore, a much smaller country than Sri Lanka has 16 golf courses.

(2). Yachting Tourists. There is a whole band of people who spend most of their time in the high seas, traveling from one destination to the other. There were many such yachts utilizing the Galle Harbour in the past. But I am told that the costs have gone up and the services provided are not up to standard and the popularity has decreased. Galle Harbour can easily be developed into a Yacht Harbour by creating an infrastructure of restaurants, hotels, cinemas, etc. to service these sailors and their yachts while they spend a few days on land.

There is a Marina planned at the Ports City in Colombo. I believe the intention is to make it a world class marina. So together Galle and Colombo can attract many people sailing yachts.

(3). The Boating Industry appears to be making a lot of headway and there are local boat builders manufacturing small and medium size boats. These can be used for cruises around the island which will attract many people, who love the sea and are interested in spending their time sailing around Sri Lanka.

(4). Adventure Tourism… There is great potential for Adventure Tourism, including hill climbing, as Sri Lankas topography is such that there are many small hills and mountains that can be scaled.

(5). Cycling Tourism. There are many tourists who are interested in cycling and our island is well roaded and relatively safe and can certainly attract many cycling tourists. At sea level, they can cycle right round the island. If they venture inland, there are many interesting routes for cycling up to the hills in the center of the island.

(6). Nature Tourism. Sri Lanka is considered to be hot spot in biodiversity. Many nature lovers can be attracted for instance. It is a paradise for bird watchers with over 528 species of birds, both migratory and endemic. Thirty four are endemic but many migratory birds fly here during winter in the western hemisphere. It is interesting that they choose Sri Lanka, but my guess is that since we are situated at the Southern most point in this area, with no land mass, beyond until the South Pole, migratory birds naturally end up in Sri Lanka. We have observed many migratory birds, even in Colombo during the western winter. Furthermore, in the wetlands around Colombo, many species of birds have been observed by bird watchers.

Then there is the largest primary tropical rain forest of over 36,000 hectares. Sinharaja has 60% of endemic trees and numerous species of Sri Lankan mammals and butterflies and many endemic species of reptiles and amphibians. A walk through Sinharaja with its eight beautiful waterfalls is an experience of a lifetime. Sinharaja is also a World Heritage site.

These are few of the niche markets that I have identified. Possibly there are many more and it is up to the tourist industry to create niche markets for attracting high-end tourists. We may not be able to attract hundreds of thousands of such high-end tourists, but even four to 500,000 will bring us more income than over a million average tourists .

Unless we follow such a strategy, just increasing numbers will not suffice and can even become counter productive, as too many low end tourists can only to an extent destroy our environment without providing us with a substantial dollar income per tourist for reinvestment and development.

(The writer is a former Chairman Commercial Bank PLC, United Motors PLC, Pelwatte Sugar Industries PLC, Deputy Chairman Hayleys PLC, Former Chairman Employers Federation and Planters Association of Ceylon).