SL tourism sector to revive gradually – First Capital Research

Although Sri Lankan tourism is yet to recover from consecutive challenges, global growth trends in tourism have seen Sri Lankan businesses start to gradually revive amidst the eased political unrest and availability of necessities, stated a First Capital Research (FCR) report on tourism forecasts. 

Inbound tourists in Sri Lanka went downhill shortly after April, amidst the Russia-Ukraine conflict, Sri Lanka’s political turmoil, and travel restrictions placed by leading tourist source markets, the FCR report said. However, it added, the calming of protests, availability of necessities, and effective Covid-19 vaccine drive supported the gradual growth of inbound tourism. 

“Meanwhile, multiple countries eased their travel advisories on Sri Lanka, which may result in a pickup in tourism from the second half of 2022. Although inbound tourists are down by 20% month-on-month (MoM) in August, we expect the trend to reverse in the upcoming months, and are expecting more arrivals from Europe with the softening of the travel advisories from multiple European nations,” the report stated. 

Moreover, the current inbound tourism seasonality trend displays a similar growth pattern to 2019, which further assures recovery in tourism towards the fourth quarter of 2022 and beyond. The first quarter of 2022 recorded the highest number of arrivals for the year, with the index continuing to surge over 100 during the period, but gradually dipped in the midst of the economic crisis. Accordingly, First Capital expects the second half of 2022 to demonstrate a similar recovery pattern as seen in 2019.

As a result of the Covid-19 pandemic, global tourism dipped, and Sri Lanka witnessed a steep decline in inbound tourists by roughly 70% in 2020 in comparison to 2019. After a slight increase in 2021, the number of inbound and outbound travellers is expected to bounce back in 2022, while FCR expects numbers to return to pre-pandemic levels by 2023.

International tourism organizations further noted that tourism characteristics have fundamentally changed amidst the pandemic, as market analysts have shown that there is substantial pent-up savings and a yearning to travel among potential travellers. 

Meanwhile, hotel bookings and occupancy rates show a growth trend, which will positively impact the Sri Lankan hotel sector in coming months, as the island offers vibrant facilities at lower costs. 

Global travel and tourism accounted for 6.

1% of GDP in 2021, denoting an increase over 2020, but below the figures reported prior to the Covid-19 pandemic. Overall, the total contribution of travel and tourism to the global GDP amounted to roughly $ 5.81 trillion in 2021. Passenger numbers in Asia Pacific and the Middle East are showing strong recovery, with pent-up demand helping to drive growth in the face of geopolitical uncertainty. Meanwhile, ACI Asia Pacific’s Industry Outlook reports that South Asia and the Middle East have recovered to approximately 85% of pre-pandemic traffic.