Business
A cut tree, a dead elephant, is a lost tourism dollar in the future

by Michel Nugawela and Pesala Karunaratna
(Continued From Last Week)
To increase occupancy rates and avoid economic losses during off-peak seasons, mass tourism suppliers also rely heavily on all-inclusive packages. By inviting tourists to leave their wallets at home and remain within the hotel (typically, the pool, bar and restaurant), they inhibit the dispersion of economic benefits to wider communities or the economically disadvantaged.
For example, mass tourists venturing out of their segregated enclaves to ‘do’ Sigiriya, Polonnaruwa, or Anuradhapura shuttle point-to-point between iconic sites and resorts in the round tour circuit. Individuals and businesses (such as the restaurants, shops, and local transportation services in the vicinity) that aren’t fortunate enough to be part of a package that grants access to this self-contained world receive zero to limited economic benefits. (Studies of all-inclusive packages internationally show that only about 10% of tourism spending directly benefits the local economy.)
Most – if not all – mass tourism suppliers in Sri Lanka also acquire the majority of their business through foreign operators, whose tactics of choice include pitting hotels and resorts against each other to secure the cheapest room rates. It’s much the same with destinations. For example, Lonely Planet’s ‘Best In Travel’ listing ranks its top destinations, regions and cities to visit each year. Sri Lanka took the top spot in 2019 – much to the sectors elation – and yet bear in mind that no single destination is featured in any two consecutive years. Countries are elevated one year, only to be tactically removed in the next. Foreign tour operators also promote destinations to prospective customers – once again, a different destination (or list of destinations) each year – ensuring bargaining power against suppliers/destinations remain stacked in their favour (and with it a high dependency on their global brands, markets, and channels).
Even as the tourism sector languishes through the Covid crisis – which, if anything, should motivate a meaningful search to curtail its own unhealthy overreliance on mass tourism markets – there is still no specific strategy or objective to address the non-differentiation of Sri Lanka’s tourism product. This is not entirely surprising; when footfall is high, the mass tourism sector replicates more of the same; when demand is low, it discounts prices instead of differentiating the product. In a crisis, it simply has no response to the need for better tourists, and a better distribution of tourist by season or location, for the destination.
The untapped potential of alternate tourism
The global tourism sector is expected to return to pre-pandemic tourism levels by 2024 – a slow and lengthy recovery period that has significantly impacted the mass tourism segment. Many consumers have lost wages or jobs, and since travelling will take a larger share of their disposable income, it is extremely unlikely that a rebound in visitor flows will equate with a recovery in visitor spending (expect more cheap all-inclusive packages to lure more cheap tourists). According to international research, the travel behaviour and preferences of the mass tourist will also look different in the future as they take fewer, more memorable trips, with a greater demand for experiences in the outdoors away from crowds.
Meanwhile, high value travellers – the segment Sri Lanka has consistently overlooked in its drive for ‘more’ (volume over value/quantity over quality) – will continue to travel in significant numbers as global mobility returns in 2021. Yet here too, their motivations and behaviours converge on the need for unique and meaningful experiences in nature and wildlife – again, where Sri Lanka has failed to develop and differentiate its product.
Many countries have used the pause this year to rethink their business as usual model and search for answers to important questions such as: will the post-Covid tourists be the kind of visitor we want? Will they improve seasonal spend, stay longer, and disperse economic benefits further into local communities? New Zealand, for example, is ‘reimagining tourism’, with key stakeholders arguing for a value over volume approach to managing tourism numbers while they await an industry recovery. Tourism is New Zealand’s biggest export industry, contributing 20.4% of total exports or 5.8 % of its GDP in 2019.
Meanwhile, Tourism Australia has identified a market opportunity of 80m high value travellers globally, of whom 32mn consider Australia as a destination to visit in the next four years. ‘Nature & Wildlife’ is the #1 driver of destination choice for this demographic from their 14 key inbound markets. This bears repeating: 72% Chinese, 73% Indians, 63% Indonesians, 76% Japanese, 66% Singaporeans, 67% South Koreans, 79% British, 63% US, 74% Germans, 68% Hong Kongers, 65% Malaysians, and 73% New Zealanders from the high value traveller segment visit Australia to experience its nature and wildlife assets.
Malaysia acknowledged the natural wealth of its country to drive revenue even earlier. In 1996, it published its National Ecotourism Plan to attract more visitors and increase visitor spend by developing competitiveness in its nature and wildlife assets. In 2002, nature and wildlife tourism established 10% of the country’s tourism sector; by 2019, this had tripled to 30.4%.
$11m is a wild elephant’s lifelong intrinsic value to tourism
We can no longer be blind to what we are most blessed with. Instead of playing to our strengths, we continue to run a race in a global tourism market where the ten major destinations attract 70% of the worldwide tourism market. It is now time to match our best assets – nature and wildlife – with the best tourists – the high value traveller. And this can be done. Our natural landscapes and attractions boast of the richest species concentration in Asia and one of the highest rates of biological endemism in the world, for both plants and animals.
Consider the wild elephant population: 70% roam outside the protected areas, offering the best viewing opportunities in Asia and representing a huge revenue stream for the tourism sector. We determine the tourism value of a single elephant, alive, to contribute $0.16mn per year. Since elephants live for up to 70 years, the total revenue that a single elephant can generate is immense – $11mn over its lifetime to our hotels, resorts, airlines, travel companies, and – potentially – local economies.
We say potentially, because the value per elephant is significantly diminished under the mass tourism model, where the asset is perceived as an irrelevant pest rather than an important generator of profits. (Conversely, these assets are precisely what high value travellers – who outspend mass tourists by 3-4 times – value most). As global demand rises, therefore, Sri Lanka’s supply diminishes: 350 elephants perished in 2019 – an estimated commercial loss of $3.9bn to the sector, which is the value the animals would have distributed among the recipients in the tourism sector had they lived their lives fully.
Deforestation also dismantles the very assets – animal or plant, elephant or forest – that are required for a product differentiation strategy. When ancient migratory corridors are disrupted, elephants will die. When forests are uprooted, we will no longer be ‘green’ – a fundamental driver of destination choice for high value travellers. When the damage is done – when our natural assets are stripped away – Sri Lanka will no longer be able to position itself as anything other than a cheap destination for sun-sea-sand tourism. The entry of international budget hotel chains over the past half-decade point to our destination relevance in the future.
Amid the increase in deforestation, the silence from the mass tourism sector is deafening, revealing, firstly, just how disconnected its suppliers are from the wider ecology within which they operate, and secondly, the poverty of their vision for the sector and country.
It should come as no surprise, then, that disruption to the mass tourism model has come from the market’s edges rather than any single operator within the mass tourism sector. Dilmah has brought its compelling vision and business strategy to compete against commoditization in the tea industry to the tourism sector. Its luxury offering can generate eight times more revenue per tourist than the mass tourism offering, indicating the potential Sri Lanka has to pivot from mass to class and drive revenue as a destination.
We would question whether it is even possible to carve out other profitable niches without building on Sri Lanka’s strengths in nature. Consider the wellness segment which reconnects consumers to nature through the restorative benefits of ayurvedic medicine and Hela Wedakama, the mindfulness meditation techniques of Buddhism, and yoga retreats. In a short span of time, the segment already accounts for $180mn export revenue (while the spices sector, which has existed for centuries, accounts just $300mn).
A reality check
Sri Lanka is weak or entirely lacking in the underlying enablers of export competitiveness. Without improved FDI flows, the government remains incapable of single-handedly investing in infrastructure and injecting working capital to promote export-driven businesses.
Allocating forest-land to export development (and as the twelve BOI export processing zones remain largely unutilized) dismantles the only competitive advantage Sri Lanka has to compete in international markets and become the primary source of foreign exchange for the country.
By stripping away our nature and wildlife assets, we are left with only our beaches and reputation for cheap sea-sun-sand tourism. The tourism sector is therefore not a fringe player in what happens next – it is right at the centre, because it is these very assets that enable its future competitiveness. We must now urgently commit to a diverse tourism portfolio targetting different tourism segments. A cut tree, a dead elephant, is a lost tourism dollar in the future.
Business
President AKD writes to President Trump over trade deficit concerns

In a bid to address mounting trade tensions, the Sri Lankan government has intensified efforts to reduce its significant trade deficit with the United States, Deputy Minister of Economic Development Dr. Anil Jayantha Fernando announced in parliament yesterday. He added that President Anura Kumara Dissanayake has despatched a formal letter to President Trump urging, among other things, a re-assessment of the recent enhanced tariff regime imposed on Sri Lanka.
The move follows reciprocal tariffs imposed by U.S. President Donald Trump, which Sri Lankan authorities say significantly affect key export sectors. The Deputy Minister indicated that the White House has acknowledged receipt of the Lankan President’s letter, signaling the launching of a potential bilateral dialogue.
Responding to a question raised by New Democratic Front (NDF) MP Ravi Karunanayake, Deputy Minister Fernando revealed that 88% of Sri Lanka’s trade deficit over the past five years stemmed from U.S. trade relations with apparel, rubber products, spices, other agricultural products and precious gems constituting 85% of total exports to the U.S. These exports, he noted, already face tariffs and paratariffs, but President Trump’s recent levies were calculated based on bilateral trade imbalances – a factor that has placed Sri Lanka’s economy under heightened pressure.
“The President’s intervention underscores our commitment to protecting Sri Lankan industries and fostering equitable trade terms, Fernando stated, defending the administration’s proactive and reactive measures to mitigate the US tariffs’ impact on local businesses.
Highlighting ongoing engagement, he added that another round of high-level discussions with the Office of the U.S. Trade Representative (USTR) was scheduled overnight. These talks aim to address structural trade imbalances and explore avenues for tariff relief, particularly for Sri Lanka’s apparel sector, which employs millions nationwide.
The President’s letter marks a strategic move in Sri Lanka’s diplomatic outreach, reflecting the government’s urgency to stabilise an economy still recovering from recent crises while in the middle of an IMF programme.
Sri Lankan industry leaders have cautiously welcomed the government’s efforts but emphasise the need for swift, tangible outcomes.
At present, all eyes remain on Washington’s response to President Dissanayake’s appeal – a potential turning point for Sri Lanka’s trade future, observers noted.
By Sanath Nanayakkare
Business
Inclusive and sustainable apparel for SDGs

The European Chamber of Commerce of Sri Lanka (ECCSL), in collaboration with the Strengthening Social Cohesion and Peace in Sri Lanka (SCOPE) programme, recently hosted its third industry-focused event, bringing together apparel-sector stakeholders to exchange experiences and practical insights on embedding inclusivity and sustainability into business operations.
Building on the success of ECCSL’s earlier events focused on tourism and food and agriculture, this apparel-focused gathering convened government representatives, industry leaders, business practitioners and the academia to discuss practical strategies for embedding inclusivity and sustainability into business operations.
While many businesses already recognize the importance of these principles, the event emphasized practical implementation, shifting the conversation from the “why” to the “how” of inclusive and sustainable practices.
Chamindry Saparamadu, Director General of the Sustainable Development Council of Sri Lanka, discussed how the Government of Sri Lanka is supporting businesses to create social and environmental impact through its Inclusive and Sustainable Business (ISB) Strategy. Ms. Saparamadu outlined how this strategy aims to create a resilient, equitable, and sustainable economy by building an ecosystem in which inclusive and sustainable businesses can thrive, driving transformative change across industries.
The event also featured engaging presentations from leading apparel businesses—Omega Line, Hirdaramani, and Compreli Consulting—each showcasing real-world examples of how inclusivity and sustainability can be embedded into business operations.
Omega Line, represented by Saman Jayasinghe (Chief HR Officer, Group – Administration) and Charman Dep (Assistant General Manager – Production Planning), presented its multifaceted sustainability approach, spotlighting its Vavuniya factory as a successful model for combining environmental stewardship with social impact.
Hirdaramani’s Manindri Bandaranayake (Chief Brand & Sustainability Officer for Sri Lanka, Bangladesh, Ethiopia, and Vietnam) showcased the company’s holistic sustainability framework, including its Wonders of Wellbeing (WOW) program, policies supporting differently-abled individuals, and deep community engagement.
Finally, Compreli Consulting co-founders Ramesh De Silva and Shehan Olegasageram showcased their innovative garment repair-as-a-service model—a circular, scalable solution that reduces waste and carbon emissions, while aligning with evolving global sustainability regulations.
Participants then had the opportunity to share their own knowledge in a group discussion, exchanging experiences and reflecting on the challenges and opportunities encountered in their sustainability journeys.
The event underscored the collective benefit of building Sri Lanka’s reputation as a global leader in inclusive and sustainable business. By fostering collaboration between businesses, the academic community and government stakeholders, the session aimed to accelerate broader industry adoption of these principles and contribute to Sri Lanka’s sustainable economic growth.
The discussions were facilitated by the Project Lead of ECCSL’s Inclusive Business Practices project, William Baxter.
Business
Union Assurance records Rs. 5.2 Billion PBT, fortifying its financial position by delivering best-in-class value

Union Assurance PLC, Sri Lanka’s longest-standing private Life Insurer, has recorded a strong financial performance with growth across key metrics for the year ending December 31, 2024. The Company achieved a 15% growth in gross written premium, totalling Rs. 21.6 billion driven by double-digit growth in both regular new business premiums and renewal premiums and paid Rs. 7.7 billion worth of claims and benefits to its customers during the year. In addition, for the year ending December 2024, the Company also declared an industry-leading universal life policyholder dividend rate of 12%, underscoring its continued commitment to deliver exceptional value to its customers.
Net investment income recorded a 9% year-on-year growth to reach Rs. 11.8 billion aided by an effective asset allocation strategy. The gains from the trading investment portfolio increased by 123% to reach Rs. 2.9 billion driven by the strong performance of the Colombo Stock Exchange during the latter part of the year.
Union Assurance distributed Rs. 3 billion as surplus from the policyholder fund and reported a profit after tax of Rs. 3.7 billion for 2024. The Company declared a final shareholder dividend of Rs. 5.00 per share amounting to a total payout of Rs. 2.9 billion.
A key milestone for Union Assurance in 2024 was the surpassing of Rs. 100 billion in total assets for the first time in its history, ending the year with Rs. 109.5 billion. This underscores the Company’s solid financial foundation and growth trajectory.
The Company’s assets under management grew by 15% during the year, reaching Rs. 95.6 billion driven by market valuation gains and cash generation from business operations. Furthermore, Union Assurance’s capital adequacy ratio stood at a healthy 264% at the end of 2024, well above the regulatory minimum of 120%.
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