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Jun 05, 2013 (LBO) - Sri Lanka's transport infrastructure is being built but the country is badly in need of destination marketing, a top leisure groups have said as higher end hotel saw lower occupancy.
In December 2012, occupancy at Sri Lanka's 5-star rated hotels dropped to 81.9 percent from 95.7 percent and at 4-star hotels from 96.7 percent to 79.9 percent official data showed.

Strategic Marketing

"Strategic destination marketing remains a critical and urgent need," Harry Jayewardene, chairman of Aitken Spence Hotels, which operate properties, in Sri Lanka, Maldives and India told shareholders in an annual review.

"A concerted effort is required for Sri Lanka to tap the higher yielding traveler segment.

"It is critical that Sri Lanka embarks on a strategic destination marketing initiative and carves its own perceptual space in the minds of the target consumer.

"Authorities in conjunction with industry players must formulate a strategic communications plan that persuasively convinces prospective higher yielding travelers."

"As an industry, we need to strive to strategically position Sri Lanka in the international markets effectively and this is all the more apparent in that the number of budget travelers to Sri Lanka has been on the rise."

John Keells Holdings, another large Sri Lanka group which also has Maldivian properties echoed the call.

"Whilst we welcome the commencement of certain initiatives to market the destination, we reiterate our belief that a sustainable, focused marketing strategy with the full involvement of all stakeholders is required to ensure that the relevant visitor segments are attracted," JKH chairman Susantha Ratnayake said.

John Keells said room rates were raised, to make revenue. While Colombo's city hotels have less competition, in resort areas many new properties have come up, especially smaller enterprises.

Top hotel groups have expressed concerns over several years that a tax collected from them by the state is not used in a broad marketing drive.

There are concerns that Sri Lanka is overpriced compared to competition in Asia.

Free Enterprise

Analysts say Sri Lanka has been able to attract higher numbers of tourists because the smaller properties have come up especially using internet booking engines and if the industry was confined to the high-priced end the island would have received less visitors.

Mass international tourism spreading friendship and people-to-people contact originated in the 1960s and 1970s as budget travel that transformed the world, through what known as the 'hippie trail'.

The hippie trail ran from Western Europe, through Turkey, Iran, Afghanistan, Nepal, Goa, Bangkok (with an offshoot to Hikkaduwa in Sri Lanka), Penang, Hue, Bali and then to Australia.

The mainly overland route was cut off by the Iranian revolution and the invasion of Afghanistan by the Soviet Union.

All of the Asian tourism hotspots are even now centered on, or are off-shoots the hippie trail.

Proponents of mass tourism says it spreads the fruits of tourism wider, as visitors patronize a larger number of small and medium enterprises which require less capital expenditure to build.

Visitors will also use domestic taxis, smaller restaurants and shops making everyone happier.

But Jayewardene suggested that the trend be stopped.

"We must stem this trend, primarily because Sri Lanka as a destination cannot sustain growth in numbers (mass tourism) but must instead look to preserve its natural assets through higher yield," he claimed.

It is not clear how stopping budget travellers and harming the small and medium industry sector, who play in a different market segment, can help the high end segment.

Analysts say global budget travel has now received a further boost, with the emergence of privately owned budget airlines following aviation de-regulation coupled and internet booking engines, making it less easy industry lobby groups to restrict people's freedoms.

Large hotel chains are coming up in Asia with essential facilities that tourists use more, and multiple destination marketing is also changing long-haul travel.

State Intervention

Meanwhile Jayewardene said the high end industry is also facing higher construction costs, and rising energy prices and it needed state intervention.

"In the absence of the State’s intervention, it is probable that the destination will fall short of capacity requirements unless speedy intervention is made," he claimed.

Tourist arrivals are broadly linked to rooms available to be booked and seats available on airlines. In 2009 and 2010 room rates moved up due to tighter capacity. In all countries, peak season prices move up to match and clear demand and supply.

He said the state expressway building has helped the industry with the Southern Highway helping the south, while the Mattala International Airport also had the potential to boost the Eastern tourism industry.

A new expressway from Katunayake airport which is due to open this year will also help, Jayawardene said.

Source