Tourism Industry

Overview

Sri Lanka has a growing tourism industry. Since gaining independence from the British in 1947, Sri Lanka has continued to attract foreign investors and tourists to the island. The country's important placement also enables it to attract transit visitors into the island. Over the years, many beautiful resorts, hotels and spas have opened. Incorporating the diverse culture of the country, the various Tourist Establishments here offer visitors a unique, yet memorable experience to remember with.

The Ceylon Tourism Board was formed in 1966 and in 2005, under a new Act of Parliament, the Sri Lanka Tourism Development Authority (SLTDA) was formed in that year.

The Challenges Faced Today!

Tourism is a fast growing industry, but with the credit crunch in 2008, tourist figures have dropped as people have less money to spend and companies are unable to expand as rapidly. There are a number of issues that tourism businesses, need to overcome.

Fluctuating oil prices have resulted in the airline industry imposing further fuel charges to cover high costs, which are unfortunately passed on to the consumer, through increased air ticket prices. Hence, consumers are forced into reconsider travelling during the peak seasons and for leisure purposes, due to the high costs. The decrease in the strength of the Sterling Pound against the Euro means for United Kingdom tourists the notion of going for a cheap holiday in Europe is disappearing. People are also becoming more aware of their carbon footprint and may want to decrease this by taking fewer flights.

A Brief History

The Sri Lanka Government established the Ceylon Tourist Board in 1966. The Board’s primary responsibility was to revitalize the tourism industry. Operating as an autonomous corporation, the Board had promotional and organisational responsibilities. Provisions for the tourists were largely based in the private sector, although the Board had facilities in areas where the private sector one establishments were considered inadequate.

Tourism expanded rapidly after 1966. The beach resorts were the main attractions while the ancient cities such as Anuradhapura, the historic city of Kandy, and the mountainous region dominated by the tea plantations were the other attractions to visit. Between 1976 and 1982, tourist arrivals increased 24% per annum, rising to 407,230 before dropping to 337,342 in 1983. A large bulk of the tourists was coming from Western Europe.

The civil conflict that started in July 1983 and had adversely affected tourism, with arrival figures reducing 43%, year on year (1982-3). Total arrivals were 230,106 in 1986, down 43% from 1982. The Ceylon Tourist Board provided a range of concessions to the industry in order to help them survive the crisis. In 1987, tourist arrivals declined 23% year on year (1986-7). In the mid-1980’s, the declining security situation began to have an increasingly negative impact on the Sri Lankan economy, and in early 1988 economic prospects  for the 1990’s appeared to be linked in part to a resolution of the ethnic conflict.

Tourism – Early Years

From early historical times, Sri Lanka has attracted foreign visitors. Many books, particularly by British administrators, have been written based on the different attractions of the Island. The first attempt to develop tourism in Sri Lanka was made by the colonial government prior to the Second World War. The Government Tourist Bureau was set up in 1937. Although international tourism in the modern sense was unknown at the time, the objective in setting up the Bureau was to provide facilities and services to the large volume of passengers who sailed between the West and the East through the port of Colombo on passenger ships.

Sri Lanka’s primary location on the world sea lanes attracted many cruise ships, freighters and other vessels. Passengers that entered the port of Colombo disembarked and enjoyed sightseeing in Colombo, Kandy and their surroundings. The Tourist Bureau’s primary responsibility was to service these passengers when they came ashore by greeting them and providing sight seeing tours. Although accurate records are unavailable, it is estimate that approximately one hundred thousand to two hundred thousand passengers visited the country per annum. The Tourist Bureau ceased its operations in 1940 due to the commencement of World War II. Due to the War there was little tourist activity.

Sri Lanka gained independence in 1948 and the new government decided to revive tourist activities by setting up the second Tourist Bureau which came to be known as the Government Tourist Bureau. The Government Tourist Bureau which was set up in 1948 functioned under the Ministry of Commerce for some time and was brought under the Ministry of Defence. The functions that were assigned to the revived Tourist Bureau were much wider than its earlier responsibilities. In addition to providing meeting and greeting facilities it was entrusted with the functions of undertaking tourist promotional work overseas and to develop tourist accommodation facilities. An officer designated as Director was placed in-charge of the Bureau and separate divisions were entrusted with the tasks of handling the new functions assigned to it.

During the 1950s there was a rapid growth of international tourism and it extended to all parts of the world. International tourist arrivals increased at an annual average rate of 7.1% from 23.5 million in 1950 to 561.0 million in 1995 more than a 22 fold increase over a period of four and a half decades. During this period, the average yearly growth rate has been as high as 10.6% which however has gradually slowed down to 4.1% in the 90s.

This was largely due to the introduction of jet aircraft for civilian transport after World War II. Consequently it became necessary for the countries to build new airports with wider and longer runways and parking bays, larger spaces, terminal buildings with modern facilities. However, when most countries in the world were preparing themselves to accommodate the new jet aircraft by investing on the expansion of their airports, Sri Lanka unfortunately did not prepare itself and lost out on the opportunity to get itself established as the main gateway between the West and the East. Singapore instead gained that advantage. Improvements to country’s airport, Katunayake, were carried out only in 1965 and the new terminal building was opened in March 1968.

As the development of accommodation facilities is a primary requirement of the promotion of tourism this task was also entrusted to the Government Tourist Bureau. The Bureau took advantage of a network of accommodation establishments constructed during the British rule not particularly for promotion of tourism but for the use of planters, the business community and government officials whilst on duty. These accommodation establishments included the residences of some of the colonial governors, which were later converted into hotels. These included the Galle Face Hotel in Kandy, Grand Oriental Hotel, the Mount Lavinia Hotel, Queens Hotel and Suisse Hotel in Kandy, Grand Hotel and St. Andrews Hotel in Nuwara Eliya, Bandarawela Hotel and New Oriental Hotel in Galle. These hotels were renovated and were used as prime accommodation facilities for foreign visitors. In addition facilities developed during the British rule, were turned into Tourist Rest-houses. These accommodation establishments were developed in places of scenic beauty such as Ella, Belihul Oya, Horton Plains, Pussellawa, Polonnaruwa, Sigiriya, Dambulla, Tissa Wewa, Nuwara Wewa, Kitulgala, Bentota, and Tissamaharama.

Apart from the accommodation establishments referred to above, no efforts were made to construct accommodation facilities for foreign for tourists. It should be noted that the private sector was neither interested nor encouraged to build modern hotels to attract foreign tourists. It should also be mentioned that no new hotels were built for nearly a century up to 1969. During that year the Blue Lagoon Hotel at Talahena, Negombo came into operation. Despite the fact that during the 1950's hotels with international brand names were constructed the world over, particularly in East Asian countries, neither the government nor the private sector made any attempt to attract and construct, hotels of international fame in Sri Lanka.

One of the significant developments in the early 1960's was the realization of the need to develop skilled manpower in the hotel and the catering sector. In 1964, the Prime Minister Mrs. Sirimavo Bandaranaike set up Sri Lanka’s first Hotel School, which was created to develop skilled manpower for existing accommodation establishments. Set up at the Colombo Club at Galle Face Colombo, the Principal and the Lecturing Staff were expatriates and the three year Degree programme covered all aspects of the Hotel and Catering Services. The curriculum was subsequently changed to a modular scheme, with basic level course leading to Intermediate and Higher Levels of Management.

The Private Sector played an important role from the very early days, by providing services to passengers who arrived in ships and came ashore for day trips and also for foreign visitors who stayed in the country for a minimum of one night. They were providing a range of Travel Agency facilities such as meeting on arrival, transfers to hotels, reservation of accommodation, arranging tours, guiding etc. The four main companies which were providing these services at the time were, Ceylon Carriers, Ceylon Tours, Quickshaws, Bobby Arnolda Tours. There was also a limited fleet of Cars (Jetty Hiring Cars) at the Colombo Harbour to provide transport facilities to foreign visitors. However, for the first time an organized taxi service was provided to both foreign visitors and local residents by Quickshaws.

It was the function of the Government Tourist Bureau to handle promotion of tourism overseas. However, local travel agents and some of the hotels also undertook their own promotional activities to attract the tourists. Consequently, tourists arrived in the form of individuals and small tour groups on passenger liners as well as by air. The tourists who arrived by air used either scheduled air services or arrived by special charters. The Tourist Bureau did not have any tourist promotional offices overseas. Hence, they had to carry out their promotional activities through Sri Lanka's Missions overseas. The Bureau produced a variety of promotional material such as tourist literature to highlight the multitude of tourist attractions and facilities available in Sri Lanka. Travel brochures, travel guides, folders, posters and films were used as promotional material. Distribution was done by overseas travel trade and local travel trade through Sri Lanka's Missions overseas and the Bureau's information offices and outlets. In addition, there was also limited participation in overseas Travel Fairs.