• November 2012

    Rising like a phoenix

    Country report | November 2012

    New tourism and MICE infrastructure is mushrooming across Colombo, the largest city in Sri Lanka

    Sri Lanka is relegating its civil war past to the pages of history, and catching up earnestly on lost time with vast tourism developments, reports Feizal Samath
    The Commonwealth Heads of Government Meeting scheduled for end-2013 would be icing on the cake for Sri Lanka’s MICE sector, bringing in more than 2,000 delegates and showing the world what the country is capable of a mere four years after the end of a 30-year-old civil war.

    Heads of state from 54 countries will attend the meeting, to be held in the southern port city of Hambantota – about 240km from Colombo and the Sri Lankan president’s hometown – which has been touted as the next conference and exhibition hub in the country.

    Speaking at a global tourism conference earlier this year, the former chairman of the Sri Lanka Tourism Development Authority, Nalaka Godahewa, who resigned on September 28, said the country had a highly diversified tourism product that could compete with any other destination in the world.

    He said: “It has beaches like the Maldives or Mauritius, ancient heritage sites like Egypt or Greece, rainforests like Congo or Amazon, art and culture like India or Thailand, waterfalls like Zambia or Canada, wildlife like Kenya or South Africa, natural beauty like Switzerland or Myanmar, gemstones like Madagascar or Burma, spices like India or Indonesia and festivals like China or Brazil.”

    Vipula Wanigasekera, director general, Sri Lanka Tourism Development Authority and general manager, Sri Lanka Convention Bureau (SLCB), agrees that Sri Lanka has a diversity of attractions that appeals to the incentive travel segment.

    However, he and other industry experts admit that the destination’s strength in the MICE sector lies in small- and medium-sized groups.

    “We are not competing with Singapore or Malaysia, which can cater to 6,000-7,000 participants. We don’t have such large conference facilities,” said Wanigasekera, adding that the country was lagging behind in conferences and exhibitions.

    But Sri Lanka is taking action to turn the tables, augmenting its supply of existing venues: Hambantota is constructing Sri Lanka’s second international airport and the largest convention centre after the Bandaranaike Memorial International Conference Hall (BMICH) in Colombo. These facilities are scheduled to begin operations by early next year.

    Latest infrastructure in Hambantota also includes an international harbour that opened last year.

    Another convention centre is also being built at Peliyagoda, just outside and north of Colombo.

    These will join Colombo’s purpose-built Sri Lanka Exhibition & Convention Centre, which is spread across approximately 3,716m2. It has hosted many exhibitions and musical concerts.

    With rising MICE potential on the horizons, BMICH has pumped in US$20 million to keep its facilities fresh and up-to-date.

    Bandula Ekayanake, director general of the venue, said the massive renovation would “enable us to hold all kinds of MICE activities”.

    BMICH, gifted and built by the Chinese government for the Non-Aligned Movement Summit in 1976, has never been refurnished until now.

    Development plans drawn for the country’s hotel landscape in the post-war period (after May 2009) are nothing short of ambitious either, with the country’s room stock set to doubled to 45,000 by 2016 from a current 23,000, aimed at catering to 2.5 million tourists, up from 800,000 annually.

    Some 150 hotels are being built in northern and eastern areas, just as roads are being widened to reduce travel time while seaplane and helicopter transfers are being progressively increased.

    But even before these future hotels come online, MICE planners can turn to several five-star hotels in Colombo, as most of them have conference facilities for 300-500 delegates.

    Wanigasekera believes that “new international brands such as Shangri-la (under construction in Colombo) would, on its own, attract the conference and meetings market”.

    Besides Shangri-la, Colombo will soon welcome Sheraton and two other international hotel brands soon.

    Wanigasekera hopes the infrastructure development will make Colombo “a happening place with music concerts etc”.

    While MICE-friendly hotels and convention and exhibition centres are being built, suitable dining experiences, which are just as important for corporate event planners, are lacking in destinations beyond Colombo.

    Vasantha Leelananda, executive vice president and destination management sector head at John Keells Holdings, feels that Sri Lanka’s infrastructure for MICE is woefully inadequate. While Sri Lanka has been known as an incentive destination for a long time and needs little promotion, Leelananda believes that more must be done to grow meetings, conferences and exhibitions.

    The trade is also calling for more to be done besides upgrading the country’s hardware. An international marketing and promotion campaign, planned since last year, has not gotten off the ground despite persistent appeals from the industry. The issue: a lack of funds from the government.

    Chaminda Dias, executive director, Luxe Asia, said that India being just an hour away would make a giant source market for MICE traffic to Sri Lanka, but warned that the imposed minimum room rate in Colombo could significantly limit growth potential.

    “Malaysia, Thailand and Dubai are all major MICE destinations, especially for Indian corporates, and they all offer more value as well as a more sophisticated product than Sri Lanka,” said Dias.

    Room rates are regulated by the government and have been raised to a minimum of US$180 from US$60-$80 about two years ago, an issue leisure travel consultants have constantly complained about.

    Competing destinations such as Thailand and Malaysia are far cheaper than Sri Lanka, according to Ahintha Amerasinghe, managing director of Worldlink Travel, who added that minimum rates restrict flexibility in offering the best package to overseas clients. “Recently we took a 270-pax incentive group for a five-day/four-night programme to Bangkok and paid approximately US$200 per pax for the entire stay including transfers, meals, conference facilities etc,” he said.

    “How do you match these rates (in Sri Lanka)?”

    Nevertheless, the market is growing and Sri Lanka continues to dream big. This year it is set to welcome at least 80 events, such as the ICC World T20 cricket tournament and the 58th Commonwealth Parliamentary Conference, with some 10,000 visitors altogether, according to SLCB. These exclude other smaller events and incentives organised by travel companies. Many of these events include regional medical meetings.

    Other major event wins include the 42nd SKÅL Asian Congress in June 2013 and the Asian Youth Games in 2017. The latter will be the biggest sporting event hosted by the country.

    Bandaranaike Memorial International Conference Hall is undergoing a US$20-million refurbishment