Tourism has grown to become one of the key pillars in the nation’s post war economic development, but to stay ahead of the game Sri Lanka has to play to its strengths, asserted the Chief of the UK’s top long-haul tour operator.
The Daily FT recently met up with Kuoni Managing Director UK Derek Jones during his recent visit to Colombo, where he shared insights on the flow of travellers to Sri Lanka, demand for the destination, room for improvement and other key areas.
Following are the excerpts of the interview:
By Shabiya Ali Ahlam
Q: Could you tell us about Kuoni?
A: Kuoni is the UK’s leading long-haul tour operator. We were founded in Switzerland in 1906 and started trading in the UK in 1966. In Switzerland we have about 80 stores and in addition to that we have franchises in France, Italy and other regions in Europe.
Recently about five years ago we started to open retail travel stores and we have now 35 stores throughout the UK and we continue to expand about five stores per year. We have all of those store managers out in Sri Lanka for a conference. It is the first time we have taken that many number of staff to one region. We wanted to take them to a destination that is growing and presents new opportunities, and Sri Lanka fitted into that definition really well.
Q: How about your presence in Asia?
A: In Asia we operate out of Hong Kong, we have a very successful model there. We have stores in India as well.
Q: What are the services offered by Kuoni?
A: In the UK we are a premium long-haul tour operator with retail capacity. We offer holidays to 88 countries where the package range from traditional beach holidays, honeymoon, to escorted tours and for many years we prided ourselves in being the leader in tailor made holiday package.
However, this is just the UK model. We have different models in different parts of the world. In Hong Kong it is similar to what we do in the UK; we position our self as a luxury tour operator. In Switzerland it is more of a mainstream travel agency. In Scandinavia we have a brand called ‘Apollo’, a charter tour operation. The model very much depends on the market we operate in. It is customised to suit the local market.
Q: How has the performance of Kuoni’s global operations been?
A: From a European perspective we have seen strong demand coming through in the UK. During the recession we went through a tough trading period. We are now seeing a recovery so currently we are seeing a strong demand for certain destinations. For Sri Lanka we are seeing a growing demand. Overall it is looking very positive.
Q: What is your partnership in Sri Lanka?
A: As a European tour operator we work very closely with Whittall Boustead, which is part of John Keells Holdings (JKH). We have a relationship that goes back 21 years. I must say that we are very happy with our partnership with them and we have no plan on changing that.
Q: When looking at the Asian region, what is the demand for Sri Lanka versus its regional peers?
A: It has been really interesting. Part of the reason we brought our store managers here is that we are seeing a significant revival and interest in Sri Lanka. We have seen a growth in demand for Sri Lanka from all of our stores in the last two years. There is immense improvement in not only the physical infrastructure, but also in the standard of the hotels. Sri Lanka is an important destination for us. There were difficult periods during the war, there had been times when the numbers had fallen very low, but we never left. Now the relationships we have with Sri Lanka have proven to be very reliable. That is where the growth is coming from.
Q: Could you elaborate on the trend?
A: We have seen significant YOY growth in our stores for the last five years. Taking the growth specifically from 2009 we have been witnessing a double digit growth rates. From a Kuoni perspective as a main tour operator we bring an average of 5,000 bookings per year.
Q: What further improvements are required to put Sri Lanka out there as a tourism destination?
A: From an infrastructure perspective the improvements we see are massive. I was last here four years ago and the most obvious differentiator is the Katunayake Highway. It is a completely different experience coming from the airport down into Colombo. The time taken to transfer our customers to Bentota has reduced to about an hour. That is important in terms of the whole experience. It is great to see the overall infrastructure being invested in.
From a tourism perspective it has been really exciting not only to see new hotel developments that have taken place over the last five years, including refurbishment, but also to see what the future investment looks like. There is massive development in tourism infrastructure, which can only be good. I think there is a general improvement in the quality of standards overall. A known thing about Sri Lanka, which is easy to say, is the friendliness of the people and the warm welcome. The quality of accommodation in the beach resorts have improved drastically. This was not there before, and for us that represents more opportunities.
Q: In terms of pricing where does Sri Lanka stand?
A: Sri Lanka is unique in that regard. The country offers a complete range of options, from really good three-star entry level accommodation to improved quality five star hotels. The entry level accommodation that is price friendly allows us to bring in new travellers into the market place.
There is such as diverse culture in such a relatively small island. Within a week one can enjoy and experience so many different places. Individual touring is an area where we can see huge opportunity and the fact that we can do that on a budget basis stay and a premium basis stay is exceptional.
An area that is beginning to grow is the boutique, smaller residences type of accommodation where people on the ground are seeking out new opportunities. There are some really nice places out there in this category. It is not branded hotel chains but family residences where people can go stay and tour in between. That is small now but there is big opportunity in the future.
Q: What are the areas Sri Lanka should focus more on?
A: I think Sri Lanka is doing a good job already. There is lots of planning that has gone into development and it is well-coordinated.
First is to have good quality premium beach hotel accommodation. We do a lot of that in the Maldives and twinning Sri Lanka with that is a great opportunity for us but we need to be able to match that standard. So having the right standard of accommodation particularly for honeymooners and those who travel for special occasions is essential. There has to be consistency in standard and delivery throughout. I think Sri Lanka is moving very quickly in the right direction and we are seeing development that is satisfying and healthy.
Q: Is Sri Lanka promoting itself well enough as a tourism destination?
A: We met with the Tourism Board and it was a positive discussion. We shared plans on advertising at the London underground and use branded taxies. That is part of the reinvestment and re-energising of the whole landscape. We would love to work more closely with Sri Lanka as we feel there is more opportunity for us to partner with the Tourist Board. It is not just about selling the destination but it is a course of action that is necessary. Hopefully we can do more of that.
In London it is a crowded space. From this side it is one tourist board and from the receiving end there are many. Sri Lanka has to invest if they have to cut through in that space. I was excited to see what the plans were and I think in the next six months there is a lot planned in terms of promotion in the UK.
Sri Lanka needs to play to its strengths. For leisure travel it is in a competitive market. We sell 88 destinations around the world so there is a lot of choice for outbound customers. In my view each destination has to find its own unique selling point.
Sri Lanka is ahead of many of the destinations because of the variety of opportunity here and has almost whatever type of holiday you want. There is so much to do in one island. There is so much variation. However, there are few destinations like this that have a concentrated collection of many different opportunities in a single visit. You need to find a way to communicate that, embrace that and engage.
Sri Lanka is certainly in a competitive space and it is in a very good position to capitalise on its opportunities.