Who spends most in Sri Lanka? European or Asian tourists?
27 Aug 2015 - {{hitsCtrl.values.hits}}
By Punartha Perera
Western Europe has been a key tourist market since the opening up of Sri Lanka to the world economy in 1978. Especially after the ending of the civil war in 2009, the strategic importance given to the tourism sector in the country has been rising. Together with the traditional European market, the visitors from India, Russia and China have also been important in the recent past.
Meanwhile, in 2011 the Sri Lanka government announced the “Tourism Development Strategy 2011-2016” having ambitious goals of attracting $ 3000 billion as foreign direct investment (FDI’s) to the economy by 2016 and planning to gain a foreign exchange revenue of $ 2.75 billion by the same year. This was done according to the previous government’s broad development policy. It is clearly mentioned in the tourism development strategy that Sri Lanka has a great scope promoting herself in the South Asia, Middle East and the Far-East regions. With regards to this fact, the tourism authorities, mainly the SLTPB (Sri Lanka Tourism Promotion Bureau), also turned to the new emerging markets of Russia, India and China for strategic promotions and tourism marketing. This was backed by the strong international relations that the government then had with these nations.
Since these countries are given prominence by Sri Lanka tourism, the budgetary allocations for the traditional European market have been shrinking. Traditionally people of Sri Lanka have the notion that the Europeans spend better than Asians. It is in this background that an extensive study was needed to determine whether this tourism strategy of tapping new markets is worthwhile by analyzing what nationalities tend to spend more in Sri Lanka than others.
The purpose of the study was to find out answers for a series of important questions. Do Asians and Europeans pay for a whole holiday package beforehand or do they pay items separately? Who would spend more on their holiday package or on separate items? If separately paying, who would spend the most on air ticket, hotel accommodations, entrance fees and transport portions? What sort of shopping items would Europeans and Asians would like to buy during their stay in Sri Lanka? Who would be the deep pocket shoppers in Sri Lanka? Who would be willing to spend more on dinner than others? How much would Europeans and Asians about tip during their vacation? Through these questions, the main query in concern was answered on what nationality spends highest in Sri Lanka and who spends the lowest.
The study was carried out in a manner where 20 clients each from top volume generating countries to Sri Lanka in Europe (France, the Netherlands and Germany) and Asia (Russia, India and China) who stayed either in a 4* or 5* hotel, were given a questionnaire to be filled in which totaled 120 clients from the selected sample. In addition to primary data, interviewer got additional information from several gem, woodcarving, batik and spice shops in Sri Lanka on their past sales data (nationality wise) on the respective countries for the past 3 years.
UK is a top arrival in Sri Lanka from Western Europe, but was not considered in this research, based on the fact that Sri Lanka tourism promotion Bureau (SLTPB) has an office in UK.
Results and Conclusions
The results of the study showed that all nationalities included hotel accommodations in the package price.
Most Chinese include entrance fees, internal transport and dinner in their package price within Sri Lanka. Most of the French and Dutch however included only entrance fees and internal transport to the beforehand paid package while opting to pay for dinners directly in Sri Lanka [packages booked were on Bed and Breakfast basis].
Most Germans however opted to pay for a package price with dinner included [HB basis] but the entrance fees and the internal transport were arranged most likely directly.
The research also revealed that the majority of the Asian nations heavily sought to buy the air ticket cheaply outside the package while Chinese preferred to pay higher for the air fare paying within package. Most Germans and French are buying an expensive air ticket within the package, but Dutch clients are heavily purchasing the ticket through cheaper, alternative modes outside package. Therefore, in conclusion it is said that the Germans have spent heavily on the ticket among Europeans and the Chinese have spent the highest amount out of Asians.
One of the most important conclusions was regarding how much the clients have paid on their package price internally for Sri Lanka, except for the air ticket. According to the results it was clearly shown that the French were the top spenders on package price internally while the Germans and the Chinese also being second and third respectively.
It was revealed that France and Germany have been leading in purchasing Sri Lankan batik clothes while the French and Dutch have demanded more to buy Sri Lankan handicrafts, especially wood items. The most demand for the Sri Lankan spices comes from the Chinese who are the prominent buyers together with the French. Similarly, the Chinese have been the majority in the purchase of gems and jewelry. Indians also are high spenders on gold and have been the second on the list for jewelry.
In terms of spending power per person on shopping in Sri Lanka, the Chinese are the highest spenders among all the selected nationalities. French are top spending nation on shopping within Europe while the Netherlands becomes the third most important nation in this regard.
When talking about the modes of transportation, the Chinese were the highest spenders on internal transport among the Asians. Among the Europeans, it was mainly the Dutch who were spending a higher value on the transport portion within Sri Lanka.
The Chinese are paying exceptional high rates on their dinner consumption in Sri Lankan hotels which makes them highest spenders on evening meals among all nations. Germans are the highest spenders for dinner in Sri Lanka among the European rivals while French and Dutch tend to spend less on dinners among other European nations.
The results show that the Chinese are the highest tippers of all the 6 nations spending more than $ 2 PPPD on tips. The Dutch are the highest tippers among the Europeans while the Germans also closely follow behind.
According to the results of each of the areas in the study, the spending patterns of the nations were ranked in table below. The highest spending nation on each area received 10 points, the second best 8 points and the third best received 6 points.
Overall, China received 54 points and made her the highest spending nationality in Sri Lanka. Compared to the Chinese, the other European nations were low in expenditure where France became second with 34 points. The expenditure of the Dutch was ranked at the third place where the Netherlands received 30 points. The Germans were the 4th biggest spending nation in the island with 22 points.
Overall, it is clear as to who actually spends high in Sri Lanka. It is clearly concluded that the Chinese are the highest spenders in the island currently way higher than all European nations. This is a surprise and also a paradox considering the fact that traditionally it is thought the Europeans are spending higher in Sri Lanka. The pattern has changed and the Chinese have become the highest spender of all selected nations in the island.
When it comes to Europe, France is concluded to be the highest spending European nation while the Netherlands becomes second and Germany being the third. India and Russia could be ranked as the lowest spending nations in Sri Lanka with Russia being the lowest.
Recommendations
According to the results obtained by the study, the researcher recommends some plans to increase the emphasis of the high spending tourist markets to Sri Lanka by giving some creative suggestions SLTPB.
The government has taken the correct step to focus more on the Chinese market. Therefore more tourism promotional activities should be focused in China among Asian countries ,reducing marketing budgets of India and Russia
More Chinese and Dutch speaking guides should be trained in Sri Lanka to cater to the future volumes as there a dire need for these rare language speaking professionals.
SLTPB should expand her tourism network in China by initiating regional tourism offices in Shanghai, Guangzhou and Tianjin with local or Sri Lankan officials who speak the local languages.
In Europe, SLTPB is currently having a tourism promotional office in UK only. According to the research analysis, it is important that at least two tourism offices being initiated in Paris and in Berlin or Amsterdam or at least allocate tourism officials for each selected region.
A new SLTPB budget should be made focusing on France, the Netherlands and Germany aiming on bringing a high spending clientele to achieve revenue goals by end of 2016.
The website of Sri Lanka tourism should be translated to Dutch for the usage of the clients from the Netherlands and Belgium.
More regular, direct flights have to be arranged to more destinations in China, Germany and in France [except for Frankfurt, Paris, Kunming, Shanghai and Beijing] by Sri Lankan airlines.
Through the horizontal airline agreement which was signed in Brussels in 2011, Sri Lankan Airlines is recommended to fly to Amsterdam at least directly once a week.
Getting involved in the regional television and radio campaigns in the selected country in the local language. ex: By letting a prominent personality (ex: Prime minister of Sri Lanka) speak during a television advertisement to encourage high market tourists to come to the country.
By properly implementing these measures will help Sri Lanka tourism to achieve her revenue targets in due time by end 2016. It is clearly seen in this study that the effort of bringing in high end clientele is worthwhile from China and also from the selected European nations.
(The writer has worked in the managerial level in one of the largest destination management companies in Sri Lanka for more than 5 years, and currently pursuing his Master in tourism in Belgium. He can be contacted through [email protected])
