Informal Tourism Accommodation - requires Accountability and Regulation Urgently

http://www.sltda.lk/monthly-tourist-arrivals-reports-2019

The Sri Lanka Tourism Brand – Longer Term Enhancement

Aspects covered here. The informal tourism sector of lodging that provide at least 60% of room nights of foreign citizen tourists visiting Sri Lanka.

This will NOT cover Sri Lankan origin foreign nationals who are more likely to have researched their stays, and either stay with friends and family for part of their vacation and for the other part engage mainly formal tourist establishments, and Boutique Hotels, which may not be registered with Sri Lanka Tourism. Often they travel with locals and friends, and demand resident rates to maximize their tourism spend. This is a growing area with more and more expatriate arrivals and a significant contributor to the economy, but which grows organically with or without a marketing campaign by the various Government Bodies like SLTDA.

The Independent Traveler Planning a stay from a few nights to a few weeks

Here, we home in on the Independent Traveler, who we wish to attract as a first time visitor to the Island, who wishes to organize his or her itinerary, mostly by themselves, using the Internet and various booking sites.

Initially they need a good website to decide how and where to go, and there is NO comprehensive website that is of any use to this visitor, who is left to either buy a Travel Guide and follow some of the suggestions there, or just decide on a location and begin by booking accommodation.

Websites such as Booking.com and Air B&B are popular sites used by these travelers, some of whom just book one or two nights initially, and prefer to book future stays once they arrive and survey the scene, but still use the same medium to book the further stays. In my experience of Paradise Farm bookings, often bookings are made the day before arrival by a tourist already in the Island, when there is space availability. Advance pre bookings lately are only around 25% of room nights.

It is likely that the well healed Tourist will book locations in advance in high end resorts, and that does not matter if they are formal or informal as they would not even know if it is registered with the SLTDA, as that would be irrelevant to them, if the location is one that either has been recommended or has a high rating on sites such as Trip Advisor, where prior guest rankings and experiences are used in making the decision to reserve a room.

Let’s divide the strategy into a two pronged one to register, high and low end.

Registration of Unregistered Lodgings with the SLTDA

I presume the use of the world Informal Sector is because those lodging establishments are not registered. They fall into the whole spectrum of lodging at every pricing level.

In order to offer to good Tourism Product for visitors to Sri Lanka, it is important that all providers of lodging for tourists to Sri Lanka, who have little or no prior knowledge of the Country, are regulated, so as to ensure that minimum standards are adhered to, and not only that, in order to assist Tourists in making up their mind on reservation, have some kind of criteria with which to judge the lodging, that they could trust. There is no question that presently the Trip Advisor rankings are used as the best source of independent verification.

The Question one must ask first is whether we need to register them in the first place and why?

Of course the first answer is that we (SLTDA) needs to know how many beds are available in the Island for tourists, at each level, in order to determine what mix and how to spend the marketing dollars here in order to attract the mix to fill these rooms across the spectrum.

So we agree that the regulating body that promotes Tourism must know how many rooms are available, so they can work on the supply side to fill gaps in numbers, locations and quality of rooms. Currently they have NO CLUE!

Reason for non-Registration is Regulation and Fees

A struggling tourism sector does not want to pay a turnover based fee to the SLTDA, as many are barely making ends meet. Those who are paying fees by being registered are resentful that the informal sector gets away with loopholes.

How can this dilemma be solved. Simply put the playing field HAS TO BE level for all, and all turnover based fees MUST BE IMMEDIATELY REMOVED.

The fee must be simply an annual fee based on Star Class or Type of Establishment and number of beds offered, a double bed treated as 2 (5ft wide or more) This is in order to obtain registration only, and category of hotel or stars over 2 stars for which a certificate is required, another flat fee for the granting of a certificate to take account of the need of that establishment to get an official grading and the administration work required to annually inspect and award. All other establishments are registered and not rated, as they may possess individual characteristics that they may have that attract the visitor.

Annual bed charge for registration could be a system as follows

Homestay Accommodation @ Rs1000 per bed per annum, divided by two to be paid in two equal instalments 1^st January and 1^st July. It may sound too low, but this is the very establishment that is in need of the MOST REGULATION, and constant evaluation and un-announced site visits, as well as the training required for the owners, usually the Head of Household.

Small Hotels Rs4,000 per head up to 2 stars also payable in two instalments

3 Star @ 5,000, 4 Star @ 6,000 and 5 Star and above including Boutique Hotels charging in excess of US$100+ per night at Rs8,000.

My understanding is that there are presently 100,000 head in these establishments on the island. Simply put 100,000 people can be put up a night at a maximum in Sri Lanka and if they are all regulated, the income from this charge would be Rs250M p/annum. This should be sufficient just to regulate and staffing to inspect and advise on the actual maintenance of the standards, certification, training and assistance where needed. The informal sector will receive a disproportionate level of service as they are more in need to be regulated, due to their 100% lack of regulation at present.

The informal sector MUST feel that their being regulated is not one that will result in them being taxed in future, but is one they will definitely be able to use as a marketing tool in attracting visitors and one which the minimal cost of registration will be more than outweighed by the benefits of a regulation certificate they can display prominently in the establishment.

Why am I concentrating on this unregulated sector registration as being of utmost importance?

Today’s and the future’s tourist product is all experiential. That is, the visitor is looking for a unique experience in their holiday, something that they can remember the holiday by and perhaps have fond memories and photographs to share with friends back home, which we obviously hope will lead to their friends being attracted to do the same.

The object of a good Tourism Brand is for visitors who have experienced it to recommend to their friends and family and for them to be repeat visitors. This then reduces the need for exponential increases in advertising and promotion, and the future growth can be concentrated on improving product, so a higher per diem charge can be obtained. Many in the business want to jump the hurdle and say we should only concentrate on the high end.

While at first sight I may agree to that, in the Sri Lankan context we have some structural changes that are needed before we get there, as we first need to educate the various service providers on what it is that the tourist is looking for, in order to be able to increase the yield per day per visitor. We have not got there yet, and in fact we are doing our utmost to denigrate the experience with some of the actions of the players and stakeholders, and we must try and plug those most shameless exploitative practices that are common.

The Key to Homestay Tourism Concentration (an example)

In my opinion, the dollars spent by the tourist reaches the rural masses faster than any other sector in the Tourism Industry. In my experience and travels around the Island, I have seen some extremely beautiful sights, where for example if only a rural subsistence farmer had the wherewithal or the foresight to invest in a detached room, bathroom and a decent sized verandah all in one building, they could house a tourist couple for a longer stay in villages, the rural village experience in Sri Lanka is attractive to youth visitors under 30 who are more able to rough out in three wheelers and buses, but who need a quiet SAFE SECURE PLACE TO STAY.

Farmers who live hand to mouth could depending on the quality of accommodation they can provide, be able to get out of poverty and dependence on farming income if this sector is expanded and encouraged. The foreign investment component of construction and food is minimal and so most of the dollars spent, not only stays in the rural areas, but are also locally sourced, with minimal import. The Savvy traveler books one night on Booking.com homestay and then stays a week or two if the place is agreeable if they come not for a lightening trip to see sights but to experience a part of Sri Lanka outside of the Guide Books. This is the tourist who refuses to pay the charges to climb Sigiriya, many of whom I have met in my travels, but wish to experience how the people of Sri Lanka really live.

What is the role of the regulator here?

The regulators job is to encourage, show that one room is better than two as many try to achieve more than is practical and to provide blue prints on what the minimum standards of cleanliness, safety, food safety and precautions needed to keep the visitors safe. This is an area that visitors to areas not frequented by tourists are conscious of and local Police are unprepared to face consequences of crime against Tourists, a major deterrent to the success of this the most productive sector Tourism, as far as the economy is concerned. There is much scope for value addition and for children to learn about what is special about their own environment to be able to appreciate and show the visitor the unique features.

Conclusion

Don’t forget that today, with 60% + room nights in the informal and therefore unregulated sector, Tourists are on their own, with no protection. This is a disaster waiting to happen, if this sector is not regulated as soon as possible.

Due to the blinkered view of the Industry looking at the unregulated sector, as more of a pain in the rear end, they have not realized that it could be the last straw that breaks the camel’s back if a tourist gets raped in a house and this information goes viral. They don’t care if the excuse is it is unregulated or not, it is the Sri Lanka Tourism Brand that is at stake here.

The reason that happens is that the providers of this service, are unaware of the dangers lurking below the surface of our people who are not used to seeing half clothed tourists walking around. Some of the tourists too are unaware of the risks they take.

Regulations such the preference for a detached room to house a visitor instead of a room in the house for example, will mean that minimum precautions are made clear. Lockable rooms, and bathrooms being another. Food safety being another.

We in Sri Lanka cannot “wing it” as it were. That time has passed. We have to be aware of how the visitor is treated. Questionnaires could be provided at all establishments with post-paid envelopes, so letters come direct to the SLTDA as that will immediately alert the inert in these establishments to the real issues faced by tourists. Currently no sampling of this nature takes place. Replies can be anonymous or with detailed information, so those who wish to leave their contact details in their home countries can be immediately contacted and any negative connotations immediately neutralized.

This is the most invaluable tool in constantly updating the checklist of regulations and best practice to be abreast of the dangers in real time and make appropriate changes where necessary.

No matter what the Industry veterans in the Regulated and Registered sector think, it is the informal sector that has the greatest potential for increasing the accommodation in the short term and increase the multiplier effect of Tourism in the Economy of Sri Lanka, where this sector is the only one that can increase the foreign exchange contribution to the economy. I therefore cannot stress enough the urgency and the importance of the proposals I have made to improve the Tourism Product in Sri Lanka in order to attract the numbers of tourists to the Island. It is the improvement of the service standards that will then gradually flow into the high end once the Brand is established and high spenders come in droves.