Tourism looks for silver lining from Europe amid China virus crisis

• Demand growing from Europe as tourists look to avoid coronavirus-hit East and South East Asian regions
• Airlines offering connectivity to Colombo from European destinations operating at near full capacity 
• Stagnant air traffic between China and Colombo forced several airlines to cut frequencies substantially 
• Local airline representatives request government to bring down airport charges for Asian carriers to maintain connectivity with Colombo 
• Hotels see 10-40% slowdown in new bookings for upcoming months with many travellers on wait-and-see mode

By NIshel Fernando 
A silver lining may be emerging for Sri Lanka’s tourism industry as European holidaymakers look for alternative destinations avoiding coronavirus-hit East and South-East Asian regions while the industry braces for a major decline in tourist arrivals from key Asia-Pacific markets such as China.

“The demand is growing from Europe. It will definitely come to Sri Lanka. Most of the airlines that offer connectivity to Colombo from European destinations are operating at near full capacity now,” a leading airline representative told Mirror Business.  

He noted that if Sri Lanka is successful in capitalising on this trend, it could considerably narrow the impact from decline in tourist arrivals from coronavirus-hit regions to the country.
According to Airport & Aviation Services (Sri Lanka) Limited, the carriers which offer connectivity to Europe are operating at over 90 percent capacity now, up from 80 percent recorded in January. 

Europe accounted for 44 percent of tourist arrivals to Sri Lanka in 2019 driven by a growth in tourist arrivals from Eastern European source markets such as Russia. 

In addition, tourist arrivals from India, Sri Lanka’s largest tourism source market, which is seen as a low hanging fruit, is also growing as many Indians prefer intra-south Asia travel amid coronavirus fears.

Sri Lanka Association of Inbound Tour Operators (SLAITO) and SriLankan Airlines are currently working jointly to offer promotional tour packages to Indians. 

Sri Lanka so far has reported only one confirmed coronavirus case.

Following the coronavirus outbreak, tourist arrivals from China declined 15 percent year-on-year (YoY) in the peak month of January, and over 90 percent YoY decline is forecasted for February.

Tour operators project around 100,000 declines of Chinese tourists to the country this year. China is Sri Lanka’s third largest source market with 265,965 arrivals in 2019 accounting for 9 percent of total arrivals in the year. 

The stagnant air traffic between key Chinese destinations and Colombo has also forced several airlines to suspend their flights altogether and others to cut down frequencies substantially.
China Southern and Air China have already scaled down their operations between Colombo and Chinese cities due to low demand. China Eastern has reduced its frequencies to one flight per week from eight flights earlier. 

Cathay Pacific also continues to operate one flight to Colombo and SriLankan Airlines operates only to Beijing and Shanghai twice a week subject to ad-hoc cancellations.

Further, Singapore Airlines has also cancelled many flights to Colombo. Airline representatives told Mirror Business that many of these flights are operating below 10 percent capacity at the moment. 

“If the spread of coronavirus is contained by April, the market will only rebound by June-July as people would still be afraid to transit to those places,” an airline representative stressed. 

Coronavirus has been spreading fast in East Asia including Japan and South Korea in recent days. Sri Lanka attracted over 40,000 tourists from the two countries in 2019.

Another airline representative said tourist arrivals from Sri Lanka’s fifth largest source market, Australia, could also slowdown this year. 

Amid the current challenging environment, airline representatives have requested the government to bring down charges at Bandaranaike International Airport (BIA) for a period of 3-6 month similar to the concessions package extended to the industry in the aftermath of Easter Sunday deadly attacks.  

They noted that this move would help Asian carriers to maintain connectivity with Colombo and to offer lower ticket prices. However, the government is yet to respond to the industry request. 

An airline representative also highlighted the failure of Tourism and Aviation Ministry in creating a common platform for industry stakeholders with the government entities to come up with proposals to face the virus challenge. 

“Despite both tourism and aviation subjects coming under one ministry, there is no interaction between stakeholders and the government as witnessed following Easter Sunday attacks. 

“Interaction is very important at this stage. We have to react fast to get things moving,” he stressed. 

Meanwhile, tour operators and hoteliers are yet to see a notable rise in new bookings from European travellers while few have cancelled their tour plans to the country. 

They said there is a 10-40 percent slowdown in new bookings for the upcoming months with many travellers on a wait-and-see mode.

According to Jetwing Hotels and Jetwing Travels Chairperson Shiromal Cooray, there is around 10 percent slowdown in new bookings with many tourists preferring to travel by direct flights avoiding transits.  

JKH Destination Management Sector Chief Operations Officer Nalaka Amartunga noted that there is a slowdown of about 30-40 percent in new bookings, although many are on wait-and-see mode. 

“Earlier, travellers made their reservations six months in advance. However, people now have a tendency to make reservations at the last moment due to recent developments globally.

They also anticipate any drops in prices or airfares. Therefore, the gap between the booking date and travel date has narrowed,” Aitken Spence Travels Managing Director Nalin Jayasundera said.  

Sri Lanka Association of Inbound Tour Operators (SLAITO) President Mahen Kariyawasam predicts that coronavirus impact is likely to postpone the recovery of Sri Lanka’s tourism sector for next year.

Sri Lanka Tourism Promotion Bureau (SLTPB) forecasts around 2.3 million tourist arrivals for this year.