India and China would become the two most important tourism markets for Sri Lanka, as arrivals from the two countries, which have a rich emerging middle class, will remain strong, a report by a local investment bank said.
As the report by Capital Alliance pointed out, tourists from India could grow as much as 6 times the current amount to around 750,000 tourists by the year 2020, with more competitive pricing from smaller hotels and more daytime flights between the two countries.
Based on the current tren d, it is expected that as many as 187,000 Indian tourists will come to Sri Lanka during the year 2011.
Terming Chinese tourism potential a wild card, the report stated that the Chinese tourist market till now remains largely untapped with 2/3rds of China’s 57million outbound tourists preferring to visit Macau and Hong Kong, which is indicative of a preference for gambling and shopping.
The report says that the introduction of large scale casinos and shopping complexes in Sri Lanka could well give Sri Lanka a significant boost in tourists over China and India. Additionally the report recommends having more mandarin speaking tour guides and bigger tour busses in order to attract more Chinese tourists.
Currently, Bali and Phuket have seen 575,000 tourists from China while India and Maldives have seen 219,000 between them while Sri Lanka only attracts 10,000 tourists from China.
Arrivals from Western Europe are likely to taper off with a slower rate of tourism growth from those countries than in the past. The report noted that the financial crisis appears to not have had a noticeable impact on tourism out of the UK, France and Germany.
The report also went on to say that the biggest problems facing the industry are a shortage of rooms and qualified staff.
Currently Sri Lanka produces about 1500 trained staff per annum. However, in order to adequately deal with increased
arrivals into the country this number will have to be increased to over 9000 trained staff per annum.
Additionally 9000 more rooms will also be needed over the 7000 that are in the pipeline.
At current rates, it is possible to see 900,000 visitors to the country by the end of the year, the highest ever in the country’s history.
At present, 44% of graded hotel rooms are found in the West of the country. The report forecasted a successful run for 5 and 4-star hotels along the southern coast, which are competitively priced to offer a viable alternative to Phuket and Bali.
It was also stated that such hotels have seen high occupancy rates over the year with 5 and 4 stars along the coast seeing 77% and 75% occupancy respectively, while the 3 star hotels and below have seen between 67%-68%
The report further stated that improved accessibility via new highways and conversion of military to domestic airports may make high end hotels in the deep-south and in the east viable alternatives to Galle. Airport capacity is predicted to be able to deal with increased arrivals by flying down larger aircraft and the construction of the Hambantota international airport.
Given all these developments, the report stated that it is quite possible that the country could see as many as 2.6million visitors to the country by the 2020.