Tourism & Tea in Sri Lanka

by Daily Mirror, Colombo, January 5, 2007

Visit Lanka chief calls for re-branding tourism

The tourist industry will have to reposition from its cultural focus to promoting Sri Lanka as a beach destination says Nihal Illeperuma a leading tour operator in the country.

Nihal Illeperuma, Managing Director of Visit Lanka, an inbound tour operator says that with ongoing security issues in the country, Anuradhapura and Polonnaruwa considered risky areas, the time has come for Sri Lanka to show case our beaches. This change would be purely tactical but a move that will ensure the survival of the highly endangered industry.

These tour operators say that Sri Lanka can get a much larger share of tourist arrivals from places like European countries if a re-branding is done to the destination by removing the cultural tag. The Visit Lanka tour operators say that they have been successful in their “beach only” packages in the recent past.

The current tourist season which began in November is a very depressing period for the industry and Illepuruma even foresees a drastic drop in the off season tourist arrivals next year since there is talk of the airline with direct flights to Sri Lanka from Benelux countries are considering to stop.

Visit Lanka, which has a large share of this off season market from the Benelux countries, says that these tourists help sustain the industry even though they are low paying as their minimum stay is fourteen days.

Tourists staying at 40 US$ a night have now become the standard and most of these are beach tourists with possibly a night’s stay in Kandy. Tour operators like Visit Lanka are now saying that investors in this industry should think again before they build luxury hotels. “If you build a 100 or 150 dollars a room resort when the market is only demanding a 40 dollar rate it will be hard to recover the investment” says Nihal Illeperuma.

The Annual Statistical Report 2005 of the Sri Lanka Tourist Board stated that Western Europe continued to be the single largest source of tourism to Sri Lanka, accounting for 41.3 percent of the total arrivals. However, this was a significant drop in Western Europe’s share when compared with her position in the previous years. The other significant contributors to the total are – South Asia 27.9 per cent; North America – 8.4 per cent; North East Asia – 6.7 per cent; South East Asia – 6.1 percent and Australasia – 5.4 per cent.

Despite the natural disasters that occurred in many parts of the world, particularly Tsunami in South and South East Asia, world tourism continued to grow at a healthy rate of 5.5 percent, from 766 million arrivals in 2004 to 808 million in 2005.

Tourism in Sri Lanka recorded a negative growth with arrivals dropping by 3.0 per cent to 549,308 in 2005, from the record figure of 566,202 in the previous year, which was also partially affected by Tsunami.

The Loss of Tourism earnings was much more severe than the loss in arrivals, with a drop of 54.5 per cent, to Rs. 36,377.3 Million (USD 362.3 mn) during 2005, from Rs.42,666.3 mn (USD416.8) recorded in the previous year.

For the first time in the history of tourism in Sri Lanka, the average duration of stay fell below 9 nights to 8.7, as compared to 10.1 nights in the previous year. To arrest this situation SRI LANKAN airline has to be more national minded and give priority to promoting Sri Lanka as a destination like the national airlines of other countries and UAE countries the Director of Visit Lanka Nihal Illeperuma says.

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Sri Lanka poised to be top tea exporter

Asia Siyaka Commodities forecast total exports in 2006 to exceed 325MnKg over 308 MnKg in 2005

Asia Siyaka Commodities said yesterday that Sri Lanka was poised to be the top tea exporting nation in the world in 2006.

It said total exports for the period January/November are at a record 300MnKg and Sri Lanka will comfortably exceed the 2005 twelve month record of 308MnKg.

"We forecast total exports in 2006 to exceed 325MnKg," Asia said.

The closest in terms of total volumes is China, whose total exports in 2005 rose to 291MnKg. The black tea component of this volume however, was only 60MnKg. The second largest black tea exporter nation is Kenya with a volume of 288MnKg up to November 2006 down from 317MnKg in 2005. Asia said the drought in the early part of the year, which had production shortfall at a peak 36MnKg has now come down to 22MnKg. Kenya saw high production in Q4 2006 and if this trend continue could well be the front runner in 2007. Kenyan export data does however include about 15 to 20% of other African origins.

Value of Sri Lankan tea exports during the period January/November 2006 reached a highest ever Rs.83 billion, up 14% on the 2005 figure of Rs.73 billion. This Rupee gain is on a 7% increase on quantity from 280MnKg in 2005 to 300MnKg by end November 2006. In US Dollars the country earned $809 million at an approximate FOB value of $2.70 per Kg.

Value added exports have declined to around 39% of the total (43% in '05). The main reason has been a drop in quantities of packet tea shipments.

Asia said Russia/CIS is the prime destination with an absorption of 72MnKg, up from 63 in 2005. The UAE has also grown from 33 to 41Mnkg. Syria 28Mnkg, Iran 24MnKg, Turkey 12MnKg, Iraq 11Mnkg and Japan 10MnKg follow. All but Turkey (15MnKg in '05) have recorded gains YoY 2005.

Exports in the month of November was a record 28 million kilos despite the plantation agitation gathered momentum and some unions obstructed dispatch of teas from estates.

This figure is also higher than the 24.5MnKg shipped in October and well above the 23.8MnKg quantity exported during November 2005. If conditions had been normal on the estates, we believe that November could have reached a figure closer to 30MnKg, Asia Siyaka said.

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"If we don't enjoy taking on the system, we
will get tired of the contest," he notes. "And they will win. So instead of
being angry, ideological and obdurate, let's be funny, flexible and
creative." -- Frank Rieger, 2006