SLTDA
Sri Lanka Tourism Development Authority

International Issues On Tourism

A recent UNWTO World Tourism Barometer identified the current tourism trends and reported the following

UNWTO

Growth in international tourist arrivals fell to less than 2% in June, and 1% in the peak travel months of July and August.

This proves that energy prices, inflation and the credit crunch has started to have a real impact on travel and tourism demand. The economic downturn, combined with the current uncertainties, extreme market volatility and a decline in both consumer and business confidence, are expected to continue taking their toll on demand for tourism - at least in the short to medium term:

Many businesses are expected to retrench, and any such retrenchment, will be quickly felt in consumer markets.

Given the current stress on many companies' balance sheets, business travel is also expected to be more adversely impacted than the leisure segment.

Unlike previous crisis such as 9/11 or SARS, the current downturn does not impact on the desire to travel. The major concern is about whether one can afford to travel or want to spend on it given uncertain economic situation.

So far international tourism has resisted the downturn better than other economic sectors such as construction and real estate or car manufacturing. As in previous situations: traffic to closer destinations, including domestic travel, is expected to be favoured as compared to long-haul travel. Segments such as visiting friends and relatives, repeat visitors, as well as special interest and independent travellers are expected to be more resilient. The decline in average length of stay as well as on expenditure is projected to be more pronounced than the overall volume .Destinations offering value for money and with favourable exchange rates have an advantage as price becomes a key issue;

Companies will and should concentrate on containment of cost in order to keep their competitive edge. More than ever it is necessary to closely work together in the tourism value chain, between public and private sector/Europe currently stands at +2 for the first eight months of 2008 (well down from the 5% growth of the last years) , and the slowdown has not spared any of its four sub regions.

Asia and the Pacific's growth (+4%) is also well behind its 2007 level, with Oceania and North East Asia suffering the brunt of the downturn in demand.

The Americas have so far performed better than in 2007 with 6% through the first eight months, the region appears to have only experienced a modest slowdown in July and August.

The Middle East is the star performer in 2008 so far, with growth for the period January through August estimated at 17% Data, though, is still limited which may lead to the need of revising this estimate.

Africa's growth is currently running at less than half the level achieved in 2007, and this is still largely thanks to North Africa's strong performance as in Sub-Saharan Africa average growth has been pulled down noticeably as compared to the 2007 growth rate.

The Barometer stresses that the anticipated softening of international tourism' growth in 2008, and further in 2009, follows four historically strong years. Between 2004 and 2007 international tourist arrivals grew at an extraordinary rate of 7% a year, well above the 4% long - term average.