Sri Lanka looks to adventure travel to attract 'quality' tourists and help rebuild economy


Patrick Ryan
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Adventure tourism is playing a key role in helping Sri Lanka rebuild its economy after a turbulent few years for the South Asian nation.

The country’s tourism sector was particularly affected in recent years due to a foreign currency crisis resulting from the impact of the Covid-19 pandemic which led to months of food and fuel shortages, along with runaway inflation and prolonged blackouts.

A year on, leading Sri Lankan figures, speaking at a Dubai conference, were optimistic about tourism helping the country's recovery.

One of the main strategies is to diversify their offerings and target those seeking adventure holidays.

We are not going to try and make Sri Lanka expensive but we want to make it the destination of choice when it comes to affordable luxury
Harin Fernando,
Sri Lankan Minister of Tourism and Lands

“We have just launched the Pekoe Trail, a 23-day hike through the mountains — that’s just one of the adventures we are offering,” Harin Fernando, Sri Lankan Minister of Tourism and Lands, told a conference on the second day of the Arabian Travel Market at Dubai World Trade Centre.

“We’re also investing in marine diving, mountain climbing and hiking.

“Another activity we are looking to bring to Sri Lanka is ski diving.”

Visitors from the GCC will play a key role in ensuring Sri Lanka continues to rebound from its troubles in recent years, the minister added.

“The Middle Eastern market is going to be crucial for Sri Lanka,” he said.

“Initially, what we wanted were numbers, which meant quantity over quality, but now I want to see us move to quality over quantity.

“We were desperate to get tourists back to Sri Lanka but that was the short-term goal. Now we need to move to a long-term strategy.”

Sri Lanka's Minister of Tourism and Lands Harin Fernando in Dubai. AFP
Sri Lanka's Minister of Tourism and Lands Harin Fernando in Dubai. AFP

It means attracting tourists who were likely to spend more on their holidays.

“The average spending [of tourists in Sri Lanka] is $200-250, which is not enough,” said Mr Fernando.

“The target is to move that number to $400-500 by next year.

“We are not going to try and make Sri Lanka expensive but we want to make it the destination of choice when it comes to affordable luxury.”

Bounced back

Sri Lanka experienced power cuts and a shortage of essential goods last year, with inflation rates reaching as high as 50 per cent.

Protests took place in the capital city of Colombo and spread to other parts of the country.

The fuel crisis led to schools closing with people urged to work remotely to reduce costs.

Eventually, the country missed a payment on its foreign debt for the first time in its history.

There was also a change of leadership as the crisis deepened.

In March, the International Monetary Fund approved a $3 billion bailout loan to help Sri Lanka in restructuring its debt and addressing its crisis-hit economy.

The Sri Lankan rupee has strengthened from its record low in May to emerge as the world’s best-performing currency this year, according to data compiled by Bloomberg.

The feeling among those at the event in Dubai is that those days are in the past.

“It has been a bumpy ride for Sri Lanka in the last 11 to 12 months but I am delighted to say we have bounced back from where we were a year ago,” said Mr Fernando.

Traditional Sri Lankan dress at the Arabian Travel Market. Chris Whiteoak / The National
Traditional Sri Lankan dress at the Arabian Travel Market. Chris Whiteoak / The National

Sri Lanka's ambassador to the UAE said being a year-round destination makes it attractive to a visitor from the Middle East, where temperatures tend to soar during the summer months.

“After months of turbulent times, Sri Lankan tourism is back, stronger and better than ever,” said Udaya Indrarathna at the event.

“We have a lot of unique experiences to offer the Middle Eastern traveller.

“Sri Lanka is a year-round destination with pristine beaches and amazing weather.

“The country is a biodiversity hotspot with large forest coverage and a rich wildlife. It also boasts a unique cultural heritage.

“It’s the best of Asia in one compact island.”

Hoteliers at the event believe that Sri Lanka is resurgent because of the diversification it offers tourists.

“The complexion of tourism in Sri Lanka is changing,” said Suresh Rajendra, president of leisure for the John Keels Group, the parent company of Cinnamon Hotels.

“The typical tourism in Sri Lanka has been beach stays and tours based on the culture and the hill country.

“That’s changing and we are seeing Colombo starting to attract the conference market which is bringing in more visitors from India and China.”

Cinnamon Hotels unveiled plans for a new Colombo-based resort in Dubai on Tuesday.

Diversification in India

Hoteliers at the conference said India is also working on diversifying its tourist offering.

“Within the adventure space you have dunes, mountains, the sea and beautiful lakes,” said Amir Golbarg, senior vice president of operations in the Middle East and Africa with Minor Hotels.

He was referring to the Jaipur region, where a new Anantara luxury resort owned by the Minor group is due to open at the end of this year.

“Just half an hour away you have beautiful unexplored dunes and in other areas you have incredible wildlife,” he said.

“We’re looking at how we can add an adventure trek with going on a journey with the tigers and experiencing them in the wild.”

The potential for tourism to grow in India was huge, but more needed to be done to improve its infrastructure, the conference heard.

Dimitris Manikis, president for the EMEA region at Wyndham Hotels and Resorts. Photo: Patrick Ryan
Dimitris Manikis, president for the EMEA region at Wyndham Hotels and Resorts. Photo: Patrick Ryan

“India is now the world’s most populous country, overtaking China, but it should have more inbound tourists,” said Dimitris Manikis, president for the EMEA region at Wyndham Hotels and Resorts.

“The potential is enormous but there are issues with infrastructure that need to be overcome.

“These include the network of roads and railways, visas, airports — everything that makes a destination more accessible.”

The bio

Favourite book: Peter Rabbit. I used to read it to my three children and still read it myself. If I am feeling down it brings back good memories.

Best thing about your job: Getting to help people. My mum always told me never to pass up an opportunity to do a good deed.

Best part of life in the UAE: The weather. The constant sunshine is amazing and there is always something to do, you have so many options when it comes to how to spend your day.

Favourite holiday destination: Malaysia. I went there for my honeymoon and ended up volunteering to teach local children for a few hours each day. It is such a special place and I plan to retire there one day.

MATCH INFO

Who: UAE v USA
What: first T20 international
When: Friday, 2pm
Where: ICC Academy in Dubai

UAE currency: the story behind the money in your pockets
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

UAE currency: the story behind the money in your pockets
Updated: May 03, 2023, 3:00 AM