Monday, April 23, 2007

Sri Lanka tourist arrivals fall sharply as violence escalates

Tourist arrivals in Sri Lanka fell by 36 percent to 35,031 in March 2007 compared with the same month last year as escalating fighting between government forces and Tamil Tiger rebels deterred holiday travel.
The fall in arrivals came on the back of an 18 percent drop in arrivals in February with key markets such as Western Europe, India and East Asia being the worst affected, according to Tourist Board statistics.

The downturn has badly affected the hotel industry, especially up-market resorts that cater to the more well-to-do travelers.

Arrivals from traditional markets like Western Europe have been affected by adverse travel warnings issued by their governments in response to increased violence in the island.

Arrivals from Western Europe, the main market for Sri Lanka, fell by 25.7 percent to 52,572 in the January-March period.

However, visitors from Eastern Europe, who appear less concerned about political troubles, increased during the period.

Total arrivals in Sri Lanka up to February were down 15.6 percent to 134,635 from 159,536 in 2006. A total of 559,603 tourists visited Sri Lanka in 2006.

Visitors from the UK, an important traditional market, fell by 5.8 percent to 22,888 in the first quarter of this year and from Germany 29.9 percent to 11,048.

More worryingly there was a 3.3 percent drop in arrivals from South Asia, especially India from where Sri Lanka has been trying to attract more visitors as Western tourist markets decline.

Visitors from India fell 7.7 percent to 31,106 and from Pakistan by 27.1 percent to 3,727 in the first quarter.

The downturn has begun to affect investment in the industry with some big players putting off planned expansions and upgrades because of dwindling numbers of visitors.

Earlier this week, Hemas Holdings subsidiary Serendib Hotels announced it was putting off plans to reposition Hotel Serendib, Bentota under the ‘Anantara’ brand of the Minor Group of Thailand.

The company said the 500 million-rupee plus investment was not considered worth it right now as there were not enough visitors for them to recover the investment.

The announcement came in the wake of a daring Tiger rebel air strike on the military’s main airbase next to the island’s only international airport in March.

That attack, although it failed to cause much damage, raised fears the conflict would worsen further.

Tourists from East Asia, including China, Japan and Malaysia also reduced their travel to the island in the first three months of the year.

But arrivals from Eastern Europe increased 60 percent with the number of Russian visitors increasing by 45.2 percent to 3,682.

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