Malik Fernando, owner of the Resplendent Ceylon collection of hotels, explains Sri Lanka’s post-crisis tourism strategy and how it has coped with previous setbacks
Sri Lanka has had more than its fair share of resilience testing. In the early 1970s we were one of the first in this part of the world to open-up for tourism. Then terrorism reared its head in the 1980s, and tourism plunged. The conflict went on for 30 long years despite which tourism continued at around 400,000 visitors annually, mainly British. Tourists were never targeted.
After the conflict ended in 2009, the pent-up demand to explore this beautiful island meant visitor numbers rocketed and tourism became the biggest employer, especially empowering the bottom of the pyramid – tuk tuk drivers, home stay hosts, chauffeurs and tour guides. Our best ever year was 2018, when 2.3m arrivals visited. Then during Easter 2019 came the entirely preventable terror attacks [which led to the deaths of 259 people, plus nine terrorists]. We knew it was not the beginning of a trend, but the six months following were devastating for Sri Lanka’s tourism industry, with mass cancellation of bookings for the following summer and winter. However, bookings picked up when it was clear there was no further security threat and we had a decent winter season from December to mid-March when the pandemic hit.
Despite the growth in arrivals since the conflict ended in 2009, the overall product quality has been sub optimal with little consideration given to creating sustainable tourism. This is mostly due to lack of positioning of Sri Lanka globally with a targeted strategy. Post the current crisis, the country is looking at a new strategy, or reset if you like, focusing on the higher yield traveller, launching research-based, sophisticated marketing campaigns. Safety protocols and certification of accommodation are also being developed. Key attractions, cultural and nature based, have not been well managed, resulting in crowded guest experiences. The plan is for the government to address these shortcomings, which will be critical to attracting higher-yield travellers and then to focus on yield rather than numbers, a better suited strategy for the physical distancing world we are in, and sustainable tourism for the long-run.
Currently all hotels are closed and staff are at home; we do not have a furlough system or unemployment insurance so the hotel’s and DMCs are having to dig deep, but on the back of already weak balance sheets after the attacks last year, staying power is a question despite concessional loans the government offers. At Resplendent Ceylon and our three resorts, Tea Trails, Wild Coast Tented Lodge and Cape Weligama, we have been using this time to attend to all those “important but not urgent projects” which get neglected in good times. Apart from developing a comprehensive health and safety procedure for when we re-open, we’ve revamped our processes, streamlined and digitised to a significant extent.
After the attacks in 2019, we cut costs to the bone without impacting the guest experience, even during the peak winter season when we were sold out. This demonstrated that if every single element of cost is reviewed there is a lot of fat that gets hidden when new budgets are developed. These savings resulted in a significant reduction in break-even occupancy levels. As a result, we did not have to look at discounting to drive occupancy; the main focus was generous value added offerings which I believe is the way forward after the current crisis as well. We also did not reduce investment in training and staff welfare. Our Resplendent Ceylon culture – service oriented and genuine warmth – could not be compromised and, we always strive first and foremost to look after our teams who we call our ‘ambassadors’. We came out of the last winter season with Net Promoter scores in excess of 95, despite having cut operating costs.
I’m hopeful we might see the first buds of tourism in August or the next winter season starting in December. Sri Lankans are resilient by nature after all our setbacks. We have a well-developed medical system that goes down to the grassroots. The country has managed the pandemic well with just seven deaths thus far [from 649 confirmed cases, correct as of April 30].
With many of our hotels in isolated rural areas and boutique by nature I believe we are well-positioned to thrive in the post-pandemic era. The development of safe air travel protocols, accurate rapid tests and a vaccine obviously will be key factors in the recovery process. Despite the setbacks, we will keep smiling – as we always do – until tourists return!