Can you give us some background information on the history of the Hotels Association of Sri Lanka its main responsibilities, structure and its objectives?
Tourism as an industry in Sri Lanka started off in the 1970's. The Hotels Association came into existence in Sri Lanka when a boom in tourism set out about thirty years ago. The Association represents the whole of the Hotel Industry. There is a single Association representing the one hundred and forty hotels in our network. Sri Lanka has about fourteen thousand [14000] rooms on offer. Our membership represents virtually over seventy five percent of this capacity in all the recognised hotels registered with the Tourist Board.
Our primary objective is to promote and foster tourism and the hotel industry while cooperating with the Government of Sri Lanka on all policy matters that would promote and improve the status of the industry. We advise the Government, statutory bodies and any other organisation on appropriate measures, incentives etc., to promote the industry in Sri Lanka.
Our main objectives and duties are:
To organise finance and participate with local and international organisations for the furtherance of activities of the association.
To affiliate with any other organisations in Sri Lanka and overseas that would bring benefits to tourism in Sri Lanka.
To take action wherever necessary, incidental or conductive to improve tourism in Sri Lanka.
To foster the spirit of unity and cooperation amongst the members of the association.
To acquire, purchase, lease, mortgage or dispose moveable and immoveable property for the benefit of the Association.
These are the basic objectives. The most important purpose of our Association is to involve the total membership in the furtherance of the hotel product we have on offer in line with demands of the industry internationally.
Sri Lanka is now recognised as a country that offers excellent products on eco tourism, adventure, health etc. We at the Hotels Association are now looking at changing our perception and our future activities in line with the demands of the traveller.
One important factor is to drive a new vision for the whole of the industry as we are not alone in this game. The hotel sector has to work very closely with other Associations. We are linked with the Travel Agency and the Tour Operators Associations .We have been successful in recent times in getting these Associations under one banner to drive a new vision for tourism
You mentioned that tourism began in Sri Lanka in the 1970's - What have been the developments of the Hotel industry in Sri Lanka since then and what has been the contribution of the Hotel Association to the development of the industry?
The hotel industry inSri Lanka took off on a tremendous boom in the early 1970's. In this industry we have long-term renewable resource as you can see in the classic example of Raffles or the Galle Face Hotel of Sri Lanka, which has lasted well over 100 years.
Many entered this industry because the returns on this investment looked very good.
Sri Lanka was identified as a beach destination for 'Beach Tourism'. The Beach hotels in the south were predominantly the area of tourism for Sri Lanka. The hotels on the East Coast located in the Trincomalee District were very popular but they are presently not in operation. In addition, we had a sprinkling of other hotels in what we call the Round Tour Circuit. This is where tourism began and moved.
The industry was always dominated by large groups like John Keells, Aitken Spence, Confifi Serendib, and Jetwing and also by a few other entrepreneurs who played a fairly distinct role. The industry was not restricted to the blue chip companies, yet the Presidents were invariably from the big companies.
The Association was able to obtain many concessions for its members and facilities including tax holidays and loans at concessionary interest rates after making representations and sometimes even after agitating for these facilities from the Government. The government accepted many of our proposals for implementation. This resulted in a fair amount of investment being attracted into this sector. Many of these concessions are still in force.
We were at our peak of tourism when the war broke out, where we had about just over four hundred thousand tourists in 1982. The Association played a vital role in conveying to the government the exact situation of the industry. The industry faced many difficulties and could hardly survive. The Association stepped in and explained the plight of the Hoteliers to the Government. At this juncture the government came up with a relief package to reschedule and defer the repayments of loans and temporarily waive off penal interest charged by the Development Banks. These concessions were available until the industry saw a rise again in the early 90's.
The Association from the early 90's has been much more proactive and concentrated on the marketing aspect of the industry. The Association realised that destination promotion was of vital importance to take Sri Lanka into the new vision. This concept was sadly lacking in the past. We had to reflect on the changes of traveller's preferences and advise the government of the necessity to market the destination.
At this stage we were agitating to dissolve the existing Tourist Board and to replace it with a Tourism Promotional Authority to be run by the private sector. During the last five years we have been trying to get this Authority established. The Tourism Promotional Authority is now almost a reality and the Private sector, as expected too will play a major role in this organisation. The appointments to the Board of Management of this Authority will be mainly drawn from the acknowledged leaders of hotel industry. The Tourism Promotional Authority will be set up under the auspices of the Tourist Board mainly to drive the promotion of the country. The association has played a major role in this strategy.
In terms of your members, who are the most relevant ones and are you seeking new members?
We have 140 members, which represent approximately seventy five percent of the industry. The city hotels account for 3,000 rooms while the balance around 10,000 rooms are from the rest of the industry. The industry is predominantly represented by the Resort Hotels. The tourist arrivals to the city Hotels are either for business or stopovers, this accounts for the high patronage of the Resort Hotels. As for membership, whenever a new hotel comes up they join the association, as they know that being a part of the association is and was useful. The Council Members of the Association consists of a President, four Vice Presidents and a Committee of ten all selected by ballot. Ten to twelve slots of the Committee are to represent hotels for fifty rooms and over and five slots for the smaller hotels for under fifty rooms. We have representation from the regional associations. We have nine regional associations. The regions represented are Beruwala, Hikkaduwa. Deep down south, Matara area, the Ruhunu Hotels, the cultural triangle, Kandy and Negombo. The Council meets once a month.
One of the latest responsibilities of the association has been to drive the marketing aspect of the whole hotel industry - in order to promote Sri Lanka for certain types of markets. How do you generate funds and how do you finance the marketing campaigns?
In principal when we proposed the Tourism Promotional Authority we were committed to raise funds by a levy of a Cess from the Hotels, Tourism Suppliers such as Travel Agencies and Tour Operators. | We have requested the government to assist with some funds for the marketing campaign. When the Tourism Promotional Authority takes over, the government will give us some funds and we are committed to the collection of a cess from next October.
At this moment of time we are having difficulties and the government realises it .We have been asked to pay a very high G.S.T. from this year and this is already a drain on our resources.
We have also proposed as a temporary measure to levy a certain charge on the incoming passenger in order to contribute to this fund.
We also charge a nominal membership fee, our collection is probably not more than Rs1.0 Million Whenever we have a project we request our membership to chip in. Recently we wanted to publish a hotel directory and we requested each hotel to pay Rs.25, 000/= we were able collect Rs 3.0 Million.
In terms of statistics, can you give us some numbers on how many tourists visit Sri Lanka and where do these tourists come from?
We had 436,000 tourist arrivals in 1999 and we dropped by about 10% last year. This year there has been a nominal increase and we hopefully will end up with a 10% increase. The major market is predominantly the European market, which accounts for about 70%. For a long period Germany was our main market but the British with about 90,000 arrivals last year have overtaken that in the last 3 years. The present market is mainly European - British, German and the French. We are looking now at a mix of the market. We are looking at the Indian, South East Asian and the Chinese market
There is a USAID Initiative on Competitiveness, which eventually resulted in forming a tourism cluster. We formed the cluster with representations from all the three associations. In the past two years we have been having fortnightly meetings and have discussed how we are to strategise a new vision for Sri Lanka. J E Austin Associates were assigned to make this study and they gave us an excellent report analysing Sri Lanka's tourism showing that we are attracting the low end of the tourism market concentrating on beach tourism. They reported that we had to go beyond beaches. That is how we started thinking this whole thing over. We got the industry together and we started looking at some new strategies and that is to go on this vision of nature, culture and adventure tourism. We have been deliberating this for a sometime and with USAID facilitation got most of the consultants to look into the areas of cruise, eco, adventure and culture tourism. Many discussions have taken place. A selected team of industry leaders have gone to Costa Rica to study Nature Travel. We have had a lot of discussions in the last six to nine months within the industry to have a proper understanding on the new strategy. We have had the first ever Eco Tourism and Adventure Travel PATA conference in Sri Lanka this year. Now the industry is knowledgeable on this aspect of the market. We are trying to put some strategies in place on how to take this forward. We have identified one site as our pilot project near the Singharaja Forest. We hope to, with the Tourist Board to put certain criteria and standards for this aspect of tourism so that we venture into these areas in a more constructive and planned manner.
There is a lot of negative media publicity on the Internet by the sympathisers of the LTTE, how do you counteract this negative media publicity?
With the Internet technology it is very difficult and any one can get anything on the Net. Once it is published there is no way of getting it erased. I should mention that Sri Lanka has not had any proper methodology of arresting adverse reports by various organisations. We are not geared to counteract this kind of situation. Serious thought has to be given and one of the aspects of the promotional bureau would be to look at this area as to how we could mitigate or reduce this kind of unfair and biased reporting. We have not been able to handle this situation in the manner that we would have liked to.
Where would you like to see the hotel industry as a whole in two to three years time and what do you think the role of the association will be in the years to come?
I think the role of the association has to be of a more proactive nature. At this time for the association to bind itself more strongly with other associations and as we have done with the tourism cluster. It will be a good proposition to have National Tourism Council and under this all these three associations can work. I would like to see our association being a part of this whole council and working together with the others towards the overall objective of bringing in quality tourism to Sri Lanka. Sri Lanka has the highest bio-diversity in Asia and should make maximum use of the bio-diversity in order to project what really Sri Lanka is rather than being merely a Beach Destination. What I would like to see is the Hotel sector coming to terms with it. There is great potential and should be putting in place products that will be new to this region so that we will be able to take the industry forward to this segment with a higher spending discerning clientele. The traveller as a much better experience than just a sun and sand destination would view Sri Lanka. An experience where the diversity can be truly enjoyed by the traveller.
Could you give us some background information on yourself? Have you always worked in the tourism industry and what has been your biggest achievement as the President of the Hotel Association?
My discipline is basically Financial Accountingand from there I branched off into management. I have a Masters in Business Administration in addition to my accounting qualification. I entered the industry in 1976. I count about twenty-five years in this industry more on management side than being a professional Hotelier. I have been associated with this company for almost 21 years of my career. I think we have been able to become possibly the largest, quality player in the hotel industry and also in the tourism sector, because we bring in as much as 40,000 visitors to the island with the inbound operation. From a company point of view we were the first to build the first five star resort in Sri Lanka, first to introduce eco tourism, the first theme hotel in the island in the Tea Factory Hotel, first to break ground in the Maldives by building a hotel in the Maldives for the first time in the history of the two countries.
From a point of view of the association I have been associated with the hotels actively for ten years or so in the Committee and as the Vice President for two or three years before I took over as President three years ago. I am about to step down as President. My biggest objective when I took over the presidency was to change the role of the association. As a corporate person, I looked at things differently during my tenure of office and was more interested in giving marketing top priority and also to bring about a certain amount of unity amongst the industry players. I think in both these areas we have achieved a lot in the last three years and I am very happy and proud that I am stepping down after achieving to some degree these objectives.
Our readers are interested in the opinion and the vision of other decision makers such as yourself. As our readers will be reading about Sri Lanka, what would be your final message to them?
In my opinion Sri Lanka is a model Tourism destination. It is a model that can only be matched by a very few destinations. If we can put this product in place, our dream should be that every discerning traveller should be visiting this beautiful island to enjoy its great bio diversity and great hospitality of her smiling people.
NOTE: World Investment News Ltd cannot be made responsible for the content of unedited transcriptions.
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