#1SRI LANK OURISM AUTHORITY DEVELOP Growth Scenarios for Tourism to Sri Lanka: 2021-2025 A Time-Series Analysis Conducted by Sri Lanka Tourism Development Authority December 2021#2Growth Scenarios for Tourism to Sri Lanka: November 2021 Table of contents Introduction Recovery remains ambiguous Methodology. Growth scenarios for tourism to Sri Lanka, 2021 to 2025.... 3455 2#3Growth Scenarios for Tourism to Sri Lanka: November 2021 Introduction The impact of the COVID-19 pandemic is unprecedented and has almost brought the global travel and tourism industry to a halt. All parts of its value chain have been affected and consumer perceptions and travel patterns have shifted. The number of international tourist arrivals declined by 74 percent in 2020, compared with the previous year (Source: UNWTO Tourism Dashboard, 2021). A protracted recovery is anticipated and a consensus of tourism industry experts do not expect a return to pre-COVID arrival levels until 2024 or later. The low levels of vaccination in many countries, travel restrictions and protocols, vaccination hesitancy, emerging new variants of COVID-19, low traveller confidence and poor economic conditions could be the likely reasons contributing to the slow recovery (Source: UNCTAD, 2021). The growth scenarios for tourism to Sri Lanka are produced in this context. An increasing number of countries are in the process of reopening their borders for tourism when their own populations are vaccinated. Yet the vaccination rates in different regions remain asymmetrical. As of October 30, 54%, of the world population has received at least one dose of the COVID-19 vaccination (Source: Our World in Data). Currently in Sri Lanka, 560,345 confirmed cased have been recorded as of 26th November (Source: Health promotion Bureau, Sri Lanka). The future trend remains uncertain for Sri Lanka given the evolving nature of the pandemic and other corelated variables such as vaccination rates (currently 74%) and efforts in curtailing the pandemic. In addition to the direct impact of the pandemic, there could be other myriad variables that could affect inbound tourism into the country. Therefore, the following document provides growth scenarios based on two main perspectives, a conservative scenario and a more optimistic scenario from 2021 to 2025. The scenarios are meant to provide an updated overview of international inbound tourism arrivals to Sri Lanka on an annual basis. The data is meant to provide a viewpoint on how Sri Lanka's tourism recovery could unfold to support investment, marketing and product development decisions. 3#4Growth Scenarios for Tourism to Sri Lanka: November 2021 Recovery remains ambiguous Share of people vaccinated against COVID-19, Nov 24, 2021 Alternative definitions of a full vaccination, e.g. having been infected with SARS-CoV-2 and having 1 dose of a 2-dose protocol, are ignored to maximize comparability between countries. Share of people fully vaccinated against COVID-19 Share of people only partly vaccinated against COVID-19 Spain 80% Canada 76% France United Kingdom Germany United States 69% 68% 68% 58% 79% 7.4% 77% 6.8% 75% 70% 11% 69% India 30% Kazakhstan Russia Ukraine 0% 24% 10% 26% 56% 42% 46% 37% 7% 44% 6.1% 30% 20% 30% 40% 50% 60% Our World in Data 82% The recovery for tourism remains uncertain. While vaccination rates continue to be asymmetrical in the world due to various reasons, new variants have emerged making the pandemic a prolonged health, social and economic issue. The new highly mutated version of the virus, Omicron has sent ripples of panic through out North America, Africa and Europe. This has resulted in many countries imposing travel restrictions again to curtail the spread of the virus. In addition, increasing cases in Europe will further dampen consumer confidence which was gradually building after the devastating Delta variant. 70% 80% Source: Official data collated by Our World in Data. This data is only available for countries which report the breakdown of doses administered by first and second doses in absolute numbers. CC BY *240 4#5Growth Scenarios for Tourism to Sri Lanka: November 2021 Methodology The growth scenarios have been calculated primarily based on a time series analysis of actual arrivals to Sri Lanka. In addition, arrival fluctuations by month (peak & off peak), the Pacific Asia Travel Association's 2021 forecast scenarios, and the rate of growth of international arrivals to Sri Lanka from 2010 to2018 were analysed. Two main scenarios namely, a conservative scenario denoting an average level of growth and an optimistic scenario denoting an upper growth level are presented to provide a possible range of international tourist arrivals to Sri Lanka. The growth scenarios to 2023, were produced based on a time series analysis of the rate of growth of international tourist arrivals to Sri Lanka for ten months of 2021 (i.e., January through October). Arrival fluctuations in relation to each month were considered in producing the two scenarios. The conservative scenario for the years 2024 and 2025, was calculated using the average value of the Pacific Asia Travel Association's 2021 forecast scenarios and the time series analysis completed by SLTDA. The optimistic scenario for the years 2024 and 2025 was calculated using the lower value figure of the 2010 to 2018 arrivals growth trend. The data presented is current as of the time of publishing (i.e., November 30, 2021) and subject to change given market forces. SLTDA is planning on updating these growth scenarios on a quarterly basis. LO#6Growth Scenarios for Tourism to Sri Lanka: November 2021 Growth scenarios for tourism to Sri Lanka, 2021 to 2025 Conservative vs. Optimistic growth scenarios for each year based on SLTDA Research Team Analysis as of November 2021 2021 2022 2023 2024 2025 Month scenario scenario scenario scenario Conservative Optimistic Conservative Optimistic Conservative Optimistic Conservative Optimistic Conservative Optimistic scenario scenario scenario scenario scenario scenario January 1,682* 1,682* 45,606 79,764 82,671 93,323 183,148 289,131 235,785 325,599 February 3,366* 3,366 52,438 73,114 85,928 102,179 179,258 282,992 230,779 305,455 March 4,581* 4,581 50,976 76,454 89,181 111,290 175,870 277,642 226,416 290,099 April 4,168* 4,168 41,303 69,783 92,430 120,647 142,065 224,274 182,895 276,726 May 1,497* 1,497 30,517 63,104 105,675 130,242 110,446 174,358 142,188 186,805 June 1,614* 1,614 32,712 76,416 108,916 140,068 121,077 191,142 155,876 223,568 July 2,429* 2,429 51,397 89,720 112,154 150,119 166,542 262,915 214,406 315,641 August 5,040* 5,040 47,520 103,017 115,388 160,389 156,134 246,485 201,009 308,956 September 13,547* 13,547 35,743 86,308 118,619 170,873 124,692 196,848 160,529 249,254 October 22,771* 22,771 37,148 89,591 121,847 181,565 128,444 202,771 165,358 251,492 November 34,075 42,565 43,982 112,869 125,072 192,461 154,722 244,255 199,189 296,671 December 48,419 82,419 60,465 126,142 128,294 203,557 191,817 302,816 246,945 345,521 Total 143,189 185,679 529,808 1,046,282 1,286,185 1,756,712 1,834,215 2,895,630 2,361,376 3,375,787 Notes: 1. '*' denotes actual arrivals figures 2. Conservative & Optimistic scenarios: The Conservative scenario considers the average value obtained from the time series analysis of the first ten months of 2021 and arrival fluctuations (Peak/Off peak), while the Optimistic scenario considers the upper value obtained from the time series analysis of the first ten months of 2021 and arrival fluctuations. 3. The 2024 & 2025 Conservative growth scenario was calculated using the average value of the Pacific Asia Travel Association (PATA) 2021 Scenarios and the time series analysis of SLTDA.#7400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 Jan-21 Feb-21 (O Mar-21 O SRIOURISM PMENT AUT Growth Scenarios for Tourism to Sri Lanka: November 2021 Chart 1. Growth scenarios for tourism to Sri Lanka, 2021 to 2025 Apr-21 O May-21 O Jun-21 O Jul-21 (0) Aug-21 0 Sep-21 Oct-21 Nov-21 Dec-21 Jan-22 wwww Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Conservative Scenario Optimistic Scenario Mar-23 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Jan-24 Feb-24 Mar-24 Apr-24 May-24 Jun-24 Jul-24 Aug-24 Sep-24 Oct-24 Nov-24 Dec-24 Jan-25 Feb-25 Mar-25 Apr-25 May-25 Jun-25 Jul-25 Aug-25 Sep-25 Oct-25 Nov-25 Dec-25 Actual Arrival (Jan ~ Oct 2021) 7#8SRI LANK THORITY DEVEL www.sltda.gov.lk Research & International Relations Division 011 2426800 Ext. 151/155 [email protected]