What will Sri Lanka’s tourism recovery look like?
One approach to answering this could lie in looking outward at industry trends in countries that were affected by similar incidents in the past. There are typical aftermath visitor behaviour patterns to be aware of, as well as a trend of general industry bounce-back. The disclaimer, of course, is that no terror attack is the same – outside of the obvious factors (location, weaponry used, fatality and injury numbers), recovery can be heavily dependent on global perceptions of the country, its governance structures and its history of conflict.
Australia’s Market Development Facility (MDF) takes a look at broadly comparable attacks in neighbouring South and Southeast Asia to assess their experiences in the aftermath, and see what guidance that can be taken from them.
In Bali, three bombs ripped across the crowded tourism hotspot in October 2002, leaving 202 dead. Among the dead were foreign nationals from 21 countries, including 88 Australians and 28 Brits. Multiple travel warnings ensued, including from the key source markets of Japan (Bali’s No. 1 source market in 2001), Australia and the UK. Arrivals took an immediate hit, dropping 16% in October. November saw an even more severe impact, with a 57% drop year-on-year (YoY).
While Bali had seen a mild decline in arrivals that year, during the January to September period (1.1%), attributable to seasonal factors, this sharpened to a 5.2% drop in total arrivals by the end of 2002.
The data then takes an interesting – if slightly conflicting – turn. In 2003, total arrivals to Bali are down 22.8% versus 2002. This is despite October, November and December 2003 seeing a YoY spike in arrivals, with positive growth rates even compared to 2001 levels. In the first half of 2004, tourist arrivals return to roughly pre-attack levels and are up 69.1% on 2003. By the end of 2004, tourism has recovered, with total arrivals increasing by 46.9% YoY and even showing a moderate 13.4% increase versus 2002. This puts the bounce-back for Bali at around 20 months.
The Ripple Effect
While a decline in arrivals is to be expected, its ripple effects often go beyond the large players to reach the informal sector. In Bali, most beach vendors were young migrant workers from other islands, with limited alternative livelihoods. Lower business translated into difficulties in paying for basic amenities, while also exacting a social cost through being unable to pay for children’s education or participate in religious rituals that are a vital aspect of social life. Many of the small vendors reported anxiety and depression, while other fell to petty theft and crime. The situation was exacerbated by rising religious tensions brought on by the attack.
In August 2015, a bomb exploded inside the Erawan shrine in Bangkok, located at the Ratchaprasong Intersection – one of the Thai capital’s busiest tourism hubs. The explosion killed 20 people including five Malaysians, five Chinese, two from Hong Kong, one Indonesian and one Singaporean. Citizens of 13 countries were among those injured. Most of the victims were tourists visiting the shrine. 23 countries issued travel warnings, ranging from the lowest Level 1 warning from the Netherlands to a Level 4 from Hong Kong.
After the attack, while the number of tourist arrivals continued to increase YoY, the growth rate declined significantly. In the first half of 2015 the YoY growth rate was 29.1%. During September to December following the attack, the arrivals growth slowed to 5.6% vs. 2014 levels. This suggests a sizeable impact on the tourism industry, although it should be noted that using Thai arrival data to map arrivals to Bangkok is not without its limitations, particularly given Thailand’s highly diverse tourist offerings.
Although the tourism sector as a whole suffers with each attack of this nature, market segments often react differently. After Hong Kong raised its travel advisory for Bangkok to “Red Alert”, arrivals from major Asian markets dropped by 10%. Originating countries with low to no exposure to terrorism are often more sensitive about travel safety than those with a history of conflict in their country of origin. Nationals from countries that tend to travel in groups (commonly, China and Japan) are prone to mass-cancellations.
“Originating countries with low to no exposure to terrorism are often more sensitive about travel safety than those with a history of conflict”
The coordinated terror attacks in Mumbai in November 2008 included multiple explosions and hostage situations in two popular hotels: The Oberoi Trident and The Taj Mahal Palace. The Oberoi lost 32 staff and guests, while 137 people were killed at the Taj, with foreigners holding western passports being singled out.
Tourist arrivals took an immediate hit and were down 10.5% YoY the first month after the bombing. This negative trend continued for five months with numbers down an average of 10.4% YoY. After six months, the decline starts to level off. 12 months after the attacks, tourist arrivals recovered and were registering a slight increase on both 2007 and 2008 levels.
What contributes to a swift bounce-back? In Thailand, officials were keen to have things back to “business as usual,” re-opening the shrine in a few days and encouraging people to visit and pay their respects. Most businesses and schools in the area remained open. But Thailand also invested heavily in consistent and clear marketing, with back-to-back annual country marketing campaigns for “Amazing Thailand”.
The Importance of Intelligence
Governance, too, is key. Following the Mumbai attacks, the media spotlight fell on intelligence – or the lack thereof. At a national level, given India’s vast land area, the Intelligence Bureau (IB) reorganized itself to share information effectively with all other security agencies. Subsidiary Multi-Agency Centres were set up in 30 key locations across India to strengthen country-wide surveillance. At a more granular level, since the attackers entered the city in a boat, coastal surveillance and security was tightened. Ensuring safety and security is often beyond the private sector’s ambit and is instead a function of higher-level governance and intelligence bodies.
“The industry was poised for an increase in tourist arrivals in 2019 and the Easter Sunday attacks are certainly a setback. Having said this, Sri Lanka came out of a 30-year conflict, and so did the tourism industry. The entire industry is working as one to come out of this crisis. The challenge is to shorten the recovery period and bounce back as quickly as possible.
Unfortunately, terror attacks are becoming a common phenomenon globally. Industry leaders are lobbying with government authorities to extend financial relief packages to industry stakeholders and employees, lobbying with the authorities concerned to speak in one voice as the country’s situation gets under control, formulating a recovery marketing plan including tactical offers to stimulate market demand, planning a medium- and long-term PR-led communication plan combined with a clear focus on strengthening the security and safety measures in the industry. The tourism industry in Sri Lanka is resilient, with the courage and determination to make a comeback fast.”
Amal Goonetilleke – CEO The Hotels Association of Sri Lanka, MDF Senior Tourism Adviser
So, what does this mean for Sri Lanka’s tourism recovery?
The global story of recovery is not as bleak as one may expect. An understanding of what to expect in the few months after an attack, as well as being prepared to weather the storm, will go a long way in cushioning the economic and social impact of the tourism fall-out. For the way forward, the global lessons are clear: strong governance, good coordination and a healthy dose of optimism are critical. If careful steps are taken, Sri Lanka too can learn how to move beyond terror and rebuild its economy: for tourists and Sri Lankans alike.
Author information: Australia’s Market Development Facility (MDF) operates under the Ministry of Tourism Development with a focus on diversifying tourism in Sri Lanka.