Minister Fernando’s ‘Great Wall’ of expectations from Chinese tourists is too high

14 July 2023 10:14 am Views - 624

The minister’s overall claim is that earnings from tourism could rescue the country from its current economic difficulties – and even be a substitute for the support of the IMF. To expound his claim, the minister says that if each Chinese tourist spent USD 5,000 it would raise a figure comparable to the recent IMF disbursement of funds.

To evaluate this claim, FactCheck.lk consulted the Sri Lanka Tourism Development Board Annual Reports to identify the numbers, the average duration of stay, and the estimated daily spend of all tourists as well as Chinese tourists over the years. 

In 2016, the duration of stay for Chinese tourists reached its peak at 10.4 days. In 2019, the estimated average daily spend for all tourists reached its highest point at USD 181.2. Even if both these records were to be achieved simultaneously in one year, a Chinese tourist would spend only a total of USD 1,884 per visit (10.4 x 181.2). Therefore, the hypothetical scenario that the minister presents, where Chinese tourists spend USD 5,000 per visit, is not one that is realistic. 

The past record for the highest number of Chinese tourists is 271,577 (in 2016). In the larger context of his statement, the minister highlights a plan to increase the number of Chinese tourists to 500,000 per year. That number into the more realistic spending of USD 1,884 per visit, would amount to USD 942 million. This figure exceeds the annual programme amount of the IMF, which is USD 725 million. However, this scenario ignores the fact that the IMF programme assistance is in addition to the existing spending by Chinese tourists.
Even if there were a scenario in which Chinese tourist numbers could increase to the point where the earnings matched the annual amount of IMF assistance, the idea that it could substitute for the IMF, in getting Sri Lanka “out of this mess”, is misplaced. IMF assistance functions mainly as a form of generating commitment for improved economic policies, gaining international confidence, and in the current case, establishing guidelines for international agreement on restructuring Sri Lanka’s debt. 

The minister’s claim regarding the revenue potential from Chinese tourists sets out a scenario that is unrealistic. However, the minister’s numbers do add up even if a limited part of his scenario projections are achieved. Nevertheless, the minister is mistaken in suggesting that finding an alternative source for the funds provided by the IMF can then substitute for the overall role of the IMF to “get Sri Lanka out of this mess”. Therefore, we classify his statement as Partly True.

*FactCheck.lk’s verdict is based on the most recent information that is publicly accessible. As with every fact check, if new information becomes available, FactCheck.lk will revisit the assessment.

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