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Outgoing Speech

President of Tourist Hotels Association of Sri Lanka steps down

Jun 24, 2010

Srilal Miththapala, a senior tourism personality, recently relinquished his duties as president of the Tourist Hotels Association of Sri Lanka (THASL), after serving his 2-year term. Since he was oversees during the Annual General Meeting (AGM), which was held at the Cinnamon Grand on June 23, 2010, his address as outgoing president, was electronically uploaded and broadcast during the AGM. The transcript of the speech is reproduced below.

Dear Friends,

Firstly I must offer all of you my profound apologies for being unable to be present at our Annual General Meeting this year, due to some very urgent and unforeseen personal commitments.

I wish to convey my heartiest congratulations to Mr. Anura Lokuhetty, the new incoming president of the Tourist Hotels Association of Sri Lanka for the forthcoming year, and his new team. It is indeed going to be a very exciting time for tourism.

Last year when I stood before you to commence my second year as president, just after the war was over, I said that we will look forward to better times for tourism. At that time I do not think anyone of us imagined the speed at which tourism would grow. We are today seeing some unprecedented growth arrival figures of almost 50 percent YOY. This is backed by strong yields as well. Tourism earnings for the first quarter of 2010 also increased by a hefty 70 percent to US$141 million, compared to the same period last year, of US$83 million. Clearly this indicates that we will generate close to US$450-500 million in earnings this year.

However, at the risk of being labeled a devil's advocate, I have been cautioning that the resurgence Sri Lanka Tourism [is] currently seeing, is due to pent-up demands. Right now, we are “the new kid on the block,” but the interest will soon fade unless we strategically position and market ourselves, improve our product offering, add value, and rapidly improve our infrastructure.

The private sector has already put down our thoughts about the way forward for Sri Lanka tourism in a white paper presented to the government, where the focus will primarily be on product and infrastructure developments. We have suggested that Colombo and its suburbs be transformed rapidly into an entertainment and convention hub, which should have large-scale convention facilities and high-end entertainment complexes. We have also recommended large-scale resort developments in selected areas, with stringent environment guidelines to rapidly bring into operation a large room stock. The logic is that we should contain such large-scale developments in specific areas, with strong regulations and guidelines, which will then minimize the socio-cultural and environmental impacts, providing for sustainable development.

On this basis, we envisage that we can achieve close upon 2.2 million tourists of a completely different market mix of business and short-stay, entertainment-seeking visitors, while at the same time sustaining and growing the leisure segment. We envisage the average stay per guest coming down to around 6 days and a higher year-round occupancy with less seasonality, which will then require around 26,000 rooms to service this influx. Annual tourism earnings should increase to about US$2.4 billion.

Hence, it is important that we work towards a strategic plan such as this. I am somewhat concerned about the very steep increases in room rates that we are demanding next winter. True, we have been under-selling and discounting in the past due to the war scenario, and certainly there is the need for post-war price revisions, but we must guard against trying to make a “quick buck.” I say this because I sometimes hear that we should make "hay while the sun shines," and maximize our returns in the short term. This is what we must guard against. Our way forward forecast certainly does indicate exponential increases in revenue, from the current US$85 per night, per guest spend, to almost US$170 per night, per guest. But this increase is on a systematic and strategic basis, which has to go hand-in-hand with infrastructure and product development. Without that, one cannot sustain this growth.

Another important area that we have failed to focus on so far is development of our human resources. Our once much-admired Hotel School is currently in a rather poor state, to say the least. According to our forecast, there will be a need for some 1.4 million staff, both in the direct and indirect sector, who will have to be trained and professionally developed. With tourism getting such exposure and limelight, there is bound to be increased interest in tourism as a profession, contrary to what we faced during the years of strife, where we attracted young people who did not have any other opportunity and for whom tourism was their last career option. We need a public sector-private sector partnership model in developing our Hotel School, so that it could be expanded and professionalized to cater to our needs, as well as perhaps the needs of the region.

The other challenge I see is environmental sustainability. We are an island nation with only 65,000 square kilometers of land area, rich with cultural heritage and diverse bio-diversity not found in too many places elsewhere in the world.

Even though our forests have diminished by some 40 percent over the past century, Sri Lanka still remains relatively a green country. We were ranked no. 36 in the "Living Green" rankings of the Readers Digest Magazine a few years ago, and no. 22 in the 2009 Happy Planet index published by the New Economics Foundation. Sri Lanka is a carbon sink, where the carbon emissions absorbed by our forests exceeds our emissions, which are very low at 0.6 metric tons per person. Compare this with some of the larger more developed countries such as [the] USA where the emission per person is about 20 metric tons per year!

Sri Lanka should not exceed its carrying capacity of tourists, and we should carefully manage the enhanced throughput. Entry to archaeological sites must be regulated to prevent over visitation, mega developments must be confined to selected areas only with strict environment rules, and a better transportation network with more environmental friendly modes of transport should be implemented. We must, at all costs, protect and nurture our valuable natural assets we have inherited over the years.

As I step down from the presidency of THASL after two years, it is with some nostalgia that I do so, primarily because it was 25 years ago that I began my involvement with Sri Lanka Tourism. In 1985 when I joined Riverina Hotel as the general manager, I remember very clearly that the chairman of Confifi Management, Prof. Furkhan, and I mutually agreed that my appointment will be specifically on a contract for 3 years. Since I had just returned from the Middle East, I wanted a "temporary parking slot," while I decided what to do with my future career. That "temporary parking slot" became a 25-year involvement. I am proud that I came into the industry as a complete outsider and rose to head the most important private sector tourism organization in the country.

As regards my 2-year tenure as president, I look back with mixed feelings. The first year was a continued struggle for survival, with many challenges, trials, and tribulations in seeking redress and help for the hotels from the government. The second year saw the light at the end of the tunnel, but in its wake, it brought about a different set of challenges. Suddenly all eyes were on tourism, and everyone seemed want to have a piece of the cake, with "experts" cropping up [a] dime a dozen. We had to put up with several ministerial appointments and many changes in the hierarchy in the tourism boards. It was also frustrating that the legacy of the Pradeshiya Saba/municipality problems that I inherited could not be resolved. Although the new Pradeshiya Saba amendments shed a ray of hope, government bureaucracy stalled it. Once again electricity surcharges have been imposed, exclusively for the hotel sector, singling us once again for "special attention."

On the positive side, I was happy to see the private sector-public sector partnership in tourism beginning to work through the implementation of the new Tourism Act. It has really been a success story that even the visiting World Bank team has commented on favorably and granted some aid for tourism development on the strength of this. We must guard against the efforts of a few disgruntled elements within the tourism establishment who wish to see this changed and shut the private sector out from the consultative process that is now in place. I consider the period that I interacted with Minister Milinda Moragoda, the former minister of tourism, one of the high points of my tenure. A truly decent politician... indeed a very rare breed today!

I also feel if we managed to make THASL a visible, respected, and accepted organization, as is evident from the many interactions we had and presentations we made, to the following organizations.:

• HCIMA - Central Bank
• AMCHAM - University of Moratuwa
• OPA - Ceylon Chamber of Commerce
• Open University - University of Uva-Wellassa
• Institute of Certified Management Accountants
• All leading Ambassadors and Embassies
• Numerous Rotary Clubs

The media also played an important role in this, and I thank all the journalists who interacted with me and helped publicize the affairs of THASL, some of whom have become good friends now.

May I take this opportunity to thank my colleagues and the members of the executive committee, vice presidents, senior past presidents, and friends in the industry, who helped and supported me during these two years. My thanks are also due to Alikie and her team at the Chamber of Commerce.

After 25 years at the crease, with the last two years as captain, it is time now for me to move to the side lines, and step out of the limelight. It has been a long inning, and I think it was a reasonable and relevant and steady one.

And above all, it was played with a straight bat.

Thank you
Srilal Miththapala Bsc(Eng); C.Eng; FIEE; MIH; MIMgt
Out-going president
Tourist Hotel Association of Sri Lanka

President of Tourist Hotels Association of Sri Lanka steps down
Srilal Miththapala

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