LMD Interview — Expectations for Tourism Sector in 2019
Date — 18th Oct 2019
How has tourist arrivals recovered since the Easter Sunday Attacks?
· Tourist arrivals seem to recover, with May to August recording month on month improvements in tourist arrivals
· Tourist arrivals in September were more modest at 110,000 arrivals which was below the initial expectation of 150,000 arrivals.
· As tourism enters its Seasonal high growth phase operators are worried about their performance and are expecting a drop in occupancy.
What about tourism earnings?
· Tourism earnings were approx. USD 2.4 bn for the first eight months of the year which is a 20% reduction compared to the previous year
· Earnings for tourism would take longer to recover compared to tourist arrivals which have been driven by significant discounts offered by hotels.
· Given we are entering an election period, tourists maybe a bit hesitant to come in and hence earnings and arrivals may remain subdued for the remainder of the year
What are the implications of the opening of the Palali airport?
· A positive development given its close proximity to India where Indian tourists account for a significant part of tourist arrivals and earnings
· This would increase the potential to tap into pilgrimage and business-related tourists
· This also opens the opportunity to attract more budget airlines which would improve Sri Lanka’s competitiveness as a destination
