Ongoing financial, geopolitical crises make Sri Lanka tourism industry revival uphill process, says GlobalData
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The journey and tourism sector is a crucial earnings generator for Sri Lanka. However, the continued financial disaster coupled with Ukraine–Russia conflict and China’s zero-COVID coverage has put the sector in jeopardy. Against this backdrop, the nation will face an uphill process in restoring a as soon as thriving sector, says GlobalData, a number one knowledge and analytics firm.
Tourism accounted for greater than 12% of the nation’s GDP in 2019 and the third-largest supply of international trade reserves – behind employee remittances and the attire industry.
According to GlobalData, worldwide arrivals in Sri Lanka greater than quadrupled from 448,000 to 1.9 million between 2009 and 2019, reaching a peak of two.3 million inbound guests in 2018. Concurrently, inbound tourism spending elevated quickly from $394.4 million in 2009 to $3.6 billion in 2019, with a excessive of $4.4 billion in 2018.
Hannah Free, Travel and Tourism Analyst at GlobalData, feedback: “Sri Lanka was poised to be one of the world’s best holiday destinations due to the country’s rich culture, wealth of natural resources and diversity of accessible experiences on offer. It received major endorsements such as Lonely Planet’s best country in the world to visit in 2019, topping the National Geographic Travellers’ ‘Cool List’ in 2018 and was one of the best countries to visit according to Conde Nast Traveller Readers’ choice awards in 2021. The buzz around the island was hard to miss.”
However, tourism-dependent Sri Lanka suffered its first main setback with the Easter bombings in 2019. This led to the collapse of inbound tourism flows as worldwide arrivals declined by 18% year-on-year (YoY) and vacationer expenditure fell by 17.7% YoY in that 12 months. This was instantly adopted by two years of pandemic restrictions. Inbound guests fell to only 116,600 or 6% of 2019 ranges in 2021, and inbound tourism expenditure fell to as little as $213.1 million.
Further compounding the nation’s struggling tourism industry is the Ukraine–Russia battle, which is able to seemingly lead to an absence of vacationers and tourism spending from these international locations within the foreseeable future.
Free provides: “In 2019, Russia and the Ukraine were Sri Lanka’s seventh and thirteenth largest source markets, respectively. Similarly, China was Sri Lanka’s third largest source market in 2019, however the country shows no signs in relenting on its strict ‘zero-COVID’ policy which has essentially brought outbound travel to a standstill.”
These challenges, amidst the continued financial disaster which has seen inflation soar to 50%, each day energy cuts and shortages of fundamentals akin to gas, meals, and drugs, will undoubtedly make the revival of the nation’s tourism industry extraordinarily difficult.
Free concludes: “While the remainder of the world has seen elevated demand for tourism in current months, Sri Lanka may have an uphill battle to revive its tourism industry. Its new tourism ambassador, Sanath Jayasuriya, is reportedly selling tourism as an instrument for financial restoration. The nation’s preliminary technique to draw inbound tourism seems to be strengthening ties with India and selling Hindu websites.
“There is also untapped potential in the country’s meetings, incentives, conferences, and exhibitions (MICE) segment, particularly with India, Pakistan and Bangladesh, which could bring immediate cash-flow. However, the country may find it difficult to restore appeal in the short term – even as it starts its revival plan.”
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