In December 2019, Sri Lanka recorded as many as 2,41,663 tourist arrivals. It was 4.5% lesser than the number in December 2018, but still significant. In crossing the 2,00,000-mark, the figure showed that Sri Lanka’s resilient tourism industry had bounced back, following one of its most testing phases in the aftermath of the Easter terror bombings in April 2019.
The serial blasts, which claimed over 250 lives — including about 45 foreigners — repulsed visitors from the paradise island so much that even the best deals at luxury hotels didn’t cut it for most. The arrivals last year fell by 18% from the 2.3 million arrivals in 2018, but it still meant some improvement from the devastating month of May that saw a 70% fall in arrivals.
Things had just begun looking up at the end of last year when there was bad news again, called the ‘coronavirus’. Sri Lanka itself reported only one case — of a Chinese tourist — who fully recovered in quarantine and left on February 19. All the 33 Sri Lankan students who returned from Wuhan Province in China, the epicentre of COVID-19, tested negative, bringing some relief to the country that was dreading another disaster.
Further, the Hambantota International Port Group, which manages the China-built port and employs many Chinese workers, said all employees and their family members who returned from China just before the epidemic broke out were quarantined. The port also placed an embargo on staff members who went home for the Chinese New Year, asking them to stay back until the green light is given for safe travel by the Sri Lankan and Chinese authorities.
However, the virus will hit the island in other ways. The Sri Lanka Tourism Development Authority’s (SLTDA) data show a 17.7% slump in tourist arrivals in February. The fall is widely attributed to COVID-19, and its global impact on tourism and international travel.
While screening mechanisms have been added to airports and ports, last week, Sri Lanka halted cruise tourism amid reports of COVID-19 spreading to Europe and the U.S., among its key source markets. Sri Lanka draws nearly 60 cruise calls a year that tour operators say translates to roughly 1,00,000 visitors. “Cruise passengers usually spend a day in Colombo, and would do curated walking tours for them for about $50. Now that is nothing for tourists on a cruise, but for us it was still some money, especially after a devastating year,” said Ajit De Soyza, managing director, Ceymondu Travel. The big companies “still manage”, he said, but smaller companies like his that spent millions early last year on promotions are in a tough spot, as they hardly made any return on investment last year. Sri Lanka has almost entirely lost Chinese tourists this year and that has hurt, especially since China had emerged one of the top source markets for the tourism industry in the last few years.
Following COVID-19, however, China is off the list of top 10 tourist generating markets so far this year. According to the SLTDA, tourist arrivals from China fell by 92.5% in February compared to the corresponding month last year.
Impact on economy
Representatives from Sri Lanka’s $4.4 billion tourism industry recently met to review the situation and brainstorm ways to tackle the situation, Daily FT reported. Weighing in, the Central Bank has said the COVID-19 outbreak is likely to affect Sri Lanka’s economic performance.
Observing that the “exact” impact on the Sri Lankan economy would depend on the extent of the global spread of COVID-19, its persistence and policy responses of major economies and trading partners, the apex bank has noted that Sri Lanka’s economic links with China could be directly affected as significant volumes of consumer goods, intermediate goods and investment goods are imported from that country.
“The likely slowdown of the global economy and disruptions to the supply chain could affect Sri Lanka’s merchandise and service exports as well as related logistics. The slowdown in global tourist movements will affect Sri Lanka’s tourism sector, in addition to the direct impact of lower arrivals from China. The spread of the virus to countries with a significant number of Sri Lankan migrant workers could affect remittance inflows as well,” the Central Bank said in a recent statement.
The smaller the tour operating company is the greater the impact, according to Mr. De Soyza. “And it’s not just us, a crisis means cab operators, auto-rickshaw drivers, souvenir sellers — so many small players like them are hit badly.”
(Meera Srinivasan is The Hindu’s Colombo correspondent)