How to make the most of a bad situation

COVID-19 impact on tourism-related


The country's tourism sector will reopen on August 1, with stringent safety measures in place at approved five-star hotels that will accommodate small groups of tourists, according to the Sri Lanka Tourism Promotion Bureau. A negative PCR test is mandatory before boarding a Sri Lanka bound flight and upon arrival. Yala and Udawalawe National Parks, Arugam Bay and Trincomalee and identified beach areas would be open for tourists. But any recovery in the tourism sector will depend on how comfortable travellers are exposing themselves after so many months of isolation. Even when tourism kicks off eventually, there will be health concerns. How will the, already constrained hospitality sector devote more labour and money to adhere to health guidelines?

Jobs at risk

COVID-19 turned from a health crisis into an economic crisis in a matter of months. And the hardest hit are those countries that derive the majority of their GDP from tourism, as COVID-19 has effectively ground tourism to a halt, with no clue as to when it may resume. Hotel bookings stopped simultaneously with blockdowns, closure of borders and airports, putting as many as 100 million jobs at risk according to the United Nations World Tourism Organization (UNWTO). Businesses around the world have taken out extensions on rental and loan repayment, granting staff paid leave, requesting the staff to work from home whenever possible and slashing wages, anything short of laying off employees. Under such circumstances, an outflow of trained labour to other industries is inevitable. The hospitality sector has been pushed into a corner with further debt repayment, payroll and maintenance burdens.

The UNWTO estimates a 20 to 30 percent drop in tourist arrivals in 2020, compared to 2019. This translates to a loss of USD 300 to 400 billion or, in the worst case scenario, USD 1.5 trillion international tourism revenue. The top 10 most affected destinations in terms of tourism as share in total exports, are Macao (90 percent), Saint Lucia (89 percent), Bahamas (86 percent), Maldives (84 percent), Grenada (84 percent), Antigua and Barbuda (83 percent), Aruba (80 percent), St. Vincent and Grenadines (76 percent), St. Maarten (75 percent) and Anguila (71 percent).

Loss of revenue

Sri Lanka was able to attract 1.9 million of tourists in 2019 despite the Easter Sunday bombings, but a resulting loss in revenue amounting to USD 1.5 billion. However, tourist arrivals fell 6.5 percent in January, 17.7 percent in February and 70.8 percent in March and plummeted to zero in April. This could have long term adverse repercussions on the economy, specially in the light of the fact that the tourism industry is the third largest Foreign Exchange earner with a total of USD 3.7 billion, according to the Sri Lanka Tourism Development Authority 2019 statistics. Perhaps this is nothing compared to countries that depend solely on tourism for their GDP, but the loss of millions of tourism revenue will no doubt put a sizable dent in the Sri Lankan economy, W.H.M.S Samarathunga points out in his paper titled 'Post-COVID-19 Challenges and Way Forward for Sri Lanka Tourism'.

A total of 3,926 tourism-related establishments have employed 169,003 employees and another 219,484 as indirect employees, according to the Sri Lanka Tourism Development Authority 2018 statistics, of which a considerable number has been laid off. In fact, COVID-19 has taken hotels, tour agencies, tourist shops, restaurants, cultural destinations and national parks out of the equation slashing almost half a million tourism jobs. Temporary and contract employees are particularly vulnerable in this situation. For example, a total of 5,424 guides, including chauffeur tour guides, site guides and informal guides, are currently unemployed. Although parks were recently opened, it will take several months for its benefits to trickle down to the grassroots level.

Easing the burden

In reaction, in May, Sri Lanka Hotels Association Chairman, Sanath Ukwatte called on banks to provide loans at four percent interest on long-term payback basis, which big business are already entitled to. It's not all doom and gloom in the rest of the world either according to Gaia Discover article, 'COVID-19 Pandemic: Five Ways Towards Resilience in Tourism Business', with governments attempting to bailout businesses with economic stimulus packages, tax incentives and even co-shared wages. For example, in March the Australian government announced a scheme worth a whopping USD 130 billion to bolster businesses with wide-ranging support including staff wages, potentially benefiting up to six million Australians in the next six months, reports SBS News. According to Channel News Asia, under the Singaporean stimulus package worth USD 48 billion, the country's freelancers and self-employed are to receive $ 1,000 monthly over nine months.

Although many governments have offered such incentives tourism-related businesses around the world fear that such programmes won’t be sufficient to keep them afloat if the pandemic results in months of little to no revenue. Samarathunga points out that those who invested in lands, hotels, restaurants and vehicles are struggling to pay back loans. To make matters worse, small businesses that maybe reluctant to take on more loans due to lack of revenue, are in imminent danger of closure.

According to Samarathunga, even if countries are able to keep COVID-19 under control, there is no guarantee that airlines, cruise lines, hotels and restaurants, destinations and other tourism-related service establishments with the already curtailed human and capital resources, can overcome post-COVID-19 challenges in time. What's more worrying is that small time businesses may become reluctant to expand as they may not want to risk losing the business to a similar ordeal in the future.

Way forward

Gaia Discovery managing editor, Mallika Naguran points out that new strategies such as divesting could help build sustainable and resilient tourism businesses. For example Asian Adventures India saves a percentage of its turnover in an equity fund as rainy day reserve. Borneo Ecotours has set aside 10 percent of staff incentives as a common fund. Pre-bookings is another ingenious way to beat the lockdowns. The 'pay now, travel later' concept will allow tour businesses to stay afloat during these trying times. Going digital; everything from revamping stagnating web pages to offering products online could go along way at a time when people are strictly advised to maintain social distance and dining in is discouraged.

Naguran points out that, rather than a passive platform the internet should be explored as a content generator and a means to engage customers. For example, posts, videos and podcasts on wildlife habit and conservation and challenges to conservation could set a new trend while those with the travel bug are still under house arrest. GetYourGuide's 'The World at Home' initiative, for example, offers free Facebook livestreams, among with are a Roman cooking class and Berlin street art class, put together by industry experts and professionals.

Naguran also suggests virtual tours of eco-tourism destinations as an ideal technique to whet the traveller’s appetite. Google Arts & Culture seems to have made the most of the situation by teaming up with over 2500 museums and galleries to deliver virtual tours and online exhibits. White Manta, a Singapore-based dive company offers discounts for customers who wish to pre-book their services for near future vacations.

Samarathunga points out that China is a large source market for Sri Lankan tourism. Although according to Travel China Guide Vietnam, Thailand, Japan, Indonesia, Singapore, Malaysia, Hong Kong, Philippines, Cambodia and Macau have been the top China outbound destinations, Sri Lanka has clearly handled the pandemic far better than them and the fact that China is now synonymous with the Coronavirus in many European countries and the US, and that the Chinese is now sidelined, could work in Sri Lanka's favour to attract more high-spending Chinese to Sri Lankan destinations. Sri Lanka can also be marketed to western countries as a 'COVID-19 free' safe destination.

Samarathunga suggests promotion of domestic tourism and individual consumerism as opposed to common consumerism, which will in turn increase demands for private tours, yachts, private jets, small villas and bungalows. This is a market Sri Lankan tourism has not adequately explored into thus far and tourists' new-found aversion for crowded placed could create a new niche market in Sri Lanka for such ventures.

Samarathunga suggests that the Sri Lankan tourism industry make the best of a bad situation by branching off to alternative tourism such as eco-tourism, responsible tourism, community based tourism, Ayurveda and yoga, bird watching and agro tourism, instead of conventional mass tourism. Likewise, less demand for big hotels and resorts could result in more demands for smaller hotels. Samarathunga also points out that the situation could lead to an increased demand for island destinations such as Sri Lanka, Maldives, Seychelles, Australia, New Zealand, and the Caribbean Islands and an increased demand for direct flights as opposed to connecting flights.

All in all COVID-19 has provided island nations like Sri Lanka the ideal opportunity to revamp tourism and if handled correctly could result in a tourism boom.


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