Tourism earnings already showing signs of contraction amid Russia-Ukraine war

•  According to stakeholders, bookings have significantly dropped from the Russian Federation, the country’s largest tourist traffic generator
• THASL chief says cancellation of bookings coming in at high rate from Russia affecting occupancies directly 
• Russia generated 23% and Ukraine 13.8% of total tourist traffic for SL for the first two months 

By Shabiya Ali Ahlam
 Tourism sector earnings are already showing signs of contraction due to the implications stemming from the ongoing invasion of Ukraine by Russia. 
Although a drop in earnings from tourism was expected by industry stakeholders, an impact this early on was not foreseen.

Tourism sector stakeholders told Mirror Business that bookings have significantly come down from Sri Lanka’s largest tourist traffic generator, the Russian Federation.
According to Sri Lanka Association of Inbound Tour Operators (SLAITO) new bookings from Russia have dropped significantly starting this week.

“Our member agents have shared with us that new bookings from Russia are not coming in as usual. The rate of bookings has dropped. However, the bookings already made with DMCs are still there. But we are seeing a few cancellations,” said SLAITO Past President Mahen Kariyawasam.

 In terms of direct bookings, cancellations have begun pouring in for tourist accommodation providers and hotels.

 The Hotels’ Association of Sri Lanka (THASL) President M. Shantikumar shared that bookings via tour operators are still on while direct bookings from Russia are being 
cancelled.

“Cancellations are coming in at a high rate from Russia, so our occupancies will reduce starting immediately. If it is going to get better or worse from here we are unsure,” said Shantikumar.

In both cases, there is one hundred percent cancellation from Ukrainian tourists given the current conflict situation the country is undergoing.

For the first two months of the year, Russia generated 23 percent of the tourist traffic for Sri Lanka whereas Ukraine accounted for 13.8 percent of the total tourists arrivals.
Russia emerged as the top source market for both January and February bringing in 13,478, and 28,818 tourist arrivals, respectively.  Ukraine ranked as the third largest tourist source market for Sri Lanka in January bringing in 11,751 tourists, and was the fifth largest in February with 13,062 arrivals.

Sri Lanka fetched an income of US$ 268.3 million for the month of January from tourism. Calculations based on the data released by the Central Bank indicate that the average spending of a tourist was of US$ 3,258.9 for the month of January.   For the same month, income generated via tourism was about US$ 9.1 million higher than the inflow of foreign exchange via workers’ remittances, which was US$ 259.2 million.