Keynote Address on the theme 'Tourism & Green Investments'
Celebrating World Tourism Day 2023
September 27, 2023
Hon. Mr. Harin Fernando, Minister of Tourism and Lands; Hon. Mrs. Diana Gamage, State Minister of Tourism; Mr. H.M.B.C. Herath, Secretary, Ministry of Tourism and Lands; Chairmen of Sri Lanka Tourism Development Authority, Sri Lanka Tourism Promotion Bureau, Sri Lanka Convention Bureau and Sri Lanka Institute of Tourism and Hotel Management; Private sector representatives; Ladies and gentlemen.
Good morning to you all!
I am honoured to be here with you in commemorating World Tourism Day 2023. The theme for this year, "Tourism and Green Investments," has been close to the heart of UNDP.
It’s a timely topic for the global community as well as Sri Lanka in the post-COVID era, which presents an opportunity to fully embrace and operationalize the sustainability agenda.
Here in Sri Lanka, as the country strives to recover rapidly from the recent economic crisis, tourism has been identified as a key growth sector. With US$ 4.3 billion in earnings and a 4.3% direct contribution to the country’s GDP before the pandemic, the tourism industry is currently the third-highest gross foreign exchange earner.
Despite the recent successive challenges faced by the industry, starting from the devastating Easter Sunday attacks, and the COVID-19 pandemic, to the economic crisis, there’s a promising future for the industry.
The latest statistics from the Central Bank show that for the first time since the pandemic, tourism earnings during the first eight months of 2023 crossed the $800 million mark. While the performance is still down by 43% compared to the same period in the benchmark year of 2018, this recovery is an indication of the resilience and potential of the industry.
The Forbes has recently ranked Sri Lanka among the top 23 travel destinations globally for the year 2023. I believe this is not surprising given the alignment between, what Sri Lanka offers, and the needs of the global community that is recovering from the years of pain. In their tourism experiences, people are now seeking well-being and responsibility, as opposed to pure entertainment. Undoubtedly, the sustainability agenda has gained even greater momentum.
Tourists, particularly the younger generations, are deeply conscious of the long-term choices of their actions and the adverse impacts of tourism on the environment. Latest statistics show, a significant portion of global travellers, about 30%, feel guilty about flying due to its environmental impact, and 22% say they actively research public transport and bike rental options when travelling. Additionally, 20% prefer trains over cars for long journeys, with only 11% opting for low-emissions car rentals. Over 70% of travellers now prioritize sustainability in their holiday choices, marking a 10% increase from 2021. This extends to destination selection, travel methods, accommodations, and experiences during their trips.
Consequently, eco-tourism primarily drives the global tourism market. In 2022, the sustainable tourism market was worth about USD 195.9 billion, and is expected to reach approximately USD 656.19 billion by 2032.
As the world embraces green thinking, at this time of economic recovery efforts, the objective of the tourism sector development cannot simply be about increasing the number of inbound tourists. We must take this opportunity to promote a responsible, eco-conscious paradigm for the sector and build a strong brand around the sustainability agenda.
Sri Lanka’s lush greenery, wildlife, cultural heritage, Ayurveda and wellness practices, and the diverse culinary culture provide a solid foundation for promoting experiences to position the country so well in view of these evolving global trends.
However, the data paints a picture that is riddled with challenges to overcome.
Tourism accounts for 10% of global GDP, 7% of exports, and one in 10 jobs worldwide. Unfortunately, according to the United Nations Environment Programme’s (UNEP) research, this growth has resulted in the increasing consumption of key resources – energy, water, land and materials (such as fossil fuels, minerals, metals and biomass). It is estimated that by 2050, energy consumption will surge by 154%, while greenhouse gas emissions will increase by 131%. Water usage would spike by 152%, and the burden of solid waste disposal would be around 251% increase.
The study further estimates that 1.3 billion tons of waste, between 4-8% of global waste, is produced annually by tourists. The waste generated by the tourism and hospitality sector globally consists of 37%-72% organic waste, 6%-40% paper and cardboard, 5%-15% plastic, and 3%-14% glass. This clearly shows that the pressure that the industry has placed on the planet has been significant. And this is all happening against the backdrop of climate emergency.
So, the question we need to reflect on and act on is how can we optimize the tourism potential while ensuring sustainability and protecting our nature
We believe it is possible if we understand that it is no longer about reducing the tradeoffs between growing the industry and protecting nature. We must see nature as assets and solutions to be harnessed to attain exponential growth for our future generations.
In fact, nature loss impacts economies locally, nationally, and globally. Half of global GDP is dependent on nature. The World Bank estimates that ecosystem service collapse could result in a decline in global GDP of $2.7 trillion annually by 2030. It is estimated that 50% of global GDP is at risk from land degradation and the loss of biodiversity and ecosystem services. Nature loss poses a serious risk to the world’s economic and financial systems.
And I know many of you in this room are already aware of this argument and therefore, pioneering nature-based tourism.
Speaking of nature assets, did you know that Sri Lanka is one of the 36 biodiversity hotspots in the world? A biodiversity hotspot signifies an area with a high concentration of biodiversity. It also means it has already lost more than 70% of its natural habitats. With its unique ecosystems and endemic flora and fauna, Sri Lanka’s strength lies in its biodiversity and should we lose it, we lose the value of an authentic Sri Lankan experience. And once it is lost, it is lost forever.
As our rich biodiversity offers us varied and exciting opportunities for tourism development, before too late, we must invest in biodiversity management and in turn, the return on investments will be exponential and long-lasting.
In Sri Lanka, most public sector investments in the biodiversity sector are allocated to four agencies that collectively receive approximately 70-80% of the total annual government budget for biodiversity management.
Interestingly, all four of these agencies generate income from tourism-driven activities related to the natural assets they manage. On average, these agencies derive a significant portion of their annual expenditures, ranging from 57% to 96%, from revenue generated through tourism-related activities alone. This indicates the potential for the tourism sector to explore new avenues while drifting away from the traditional sources of income.
In some years, the Department for Botanical Gardens has earned 2.5 times the annual government allocation for the department. So, biodiversity’s contribution can clearly be quantified and measured, and its significance to our economy is evident. In fact, as per the SLTDA reports, in 2018, out of the income earned by the public sector through tourism, more than 30% was earned through biodiversity.
Other nature-based assets that the Sri Lankan tourism must tap into more are traditional medicinal plants and the Ayurveda tradition. The latest data show that the global wellness tourism market is projected to reach USD 1,062.83 billion by the end of 2025, driven by increasing interest from tourists in areas like health, travel, and food.
According to the Global Wellness Institute, Sri Lanka gained recognition as a top wellness tourism destination, ranking fourth in the world in 2021. Wellness tourism in Sri Lanka could further be enhanced by leveraging the country's unique biodiversity and promoting its spice gardens, and herbs, to create awareness of authentic ayurveda treatments, healthy Sri Lankan cuisine and its associated health benefits. Profound spiritual traditions and landmarks can also be part of the holistic tourism experience.
These nature-based assets can shape and drive the re-branding of Sri Lankan tourism if they are coupled with progressive and innovative green investments. As travellers increasingly prioritize responsible and eco-conscious choices, destinations that embrace green investments are likely to benefit more. Rethinking our approach to renewable energy sources, sustainable transportation options, and green building practices is the way forward.
Investing in sustainable transportation options, such as electric buses, e-tuk-tuks, and efficient and reliable public transportation systems, can significantly reduce emissions and augment the experiences of tourists.
Eco-friendly and disaster-resilient hotels and resorts powered by solar and wind energy, not only reduce our carbon footprint but also empower local communities, protect natural and cultural assets, and enhance the overall travel experience.
The digital revolution will continue to play a significant role in reshaping the tourism industry. Sri Lanka must embrace this shift by investing in technologies such as virtual reality (VR) experiences, and artificial intelligence (AI) to provide personalized and immersive experiences for visitors while reducing or not leaving carbon footprints.
While these green investments are the future for the industry, there are several challenges that hinder the transition. Regulatory and policy challenges, such as inconsistent incentives and permitting procedures, can create uncertainty for investors. Further, limited access to affordable green financing options, can shy away investors. In the tourism sector specifically, there can be resistance to change from traditional practices, making it difficult to introduce sustainable initiatives. On the other hand, a lack of awareness and education about the long-term benefits of green investments may lead stakeholders to prioritize short-term gains over sustainability. We must continue to advocate that trade-offs are no longer an option.
Overcoming these impediments requires collaborative efforts among government, particularly the BOI, businesses, and international organizations to provide incentives, streamline regulations to attract the right investors and expertise, and raise awareness about the economic and environmental advantages of green investments. There must be an eco-system where green investments can be easily materialized without necessarily raising the costs of responsible actions.
Engaging youth and marginalized communities, including people living with disabilities, in tourism development, promoting responsible tourism practices, and supporting small and medium-sized enterprises will contribute to inclusive growth and ensure an equitable distribution of benefits.
Here at UNDP Sri Lanka, over the years, we have been working closely with the Ministry of Tourism and the Sri Lanka Tourism Development Authority (SLTDA) in uplifting and ensuring the sustainability of the tourism industry in Sri Lanka.
Our first involvement with the Sri Lankan tourism sector started back in 2018, providing technical support to initiate the National Sustainable Tourism Certification (NSTC) scheme under the Biodiversity Finance Initiative (BIOFIN), and to promote tourism sector investments in biodiversity conservation and sustainable development.
Under the certification scheme, 37 hotels have received certifications, with 200 SMEs to receive certification by the end of 2024. Also , nine destinations have been chosen from each province to be certified as sustainable destinations. Sigiriya has been selected as the inaugural destination to be developed as a 'sustainable tourism destination.
Destination and tour operation certification programmes, supported by BIOFIN, will enable tourists to select service providers with high levels of commitment towards sustainability. Since most tourist attractions in Sri Lanka offer a value proposition comprised of biodiversity and culture, destination certification will look at the effectiveness of managing the existing biodiversity while allowing contributions towards the sustainable management of tourism and biodiversity for the future. Sustainable destinations also provide a great road to mobilizing green investments for tourism in Sri Lanka.
On other strategic tourism interventions, UNDP provided technical support to draft the National Tourism Policy and conduct stakeholder consultations and validation workshops under the guidance of the Ministry of Tourism. It is our sincere hope that the policy will be fully adopted and implemented in the near future.
While we appreciate the fruits of the partnership, more can be done to make sustainability an integral part of the tourism industry in Sri Lanka in close collaboration with other partners.
As individuals, businesses, and governments, we have a shared responsibility to promote and support green investments in tourism. UNDP stands ready to continue to join hands with the Government of Sri Lanka and private sector partners to promote green investments in the tourism sector.
As we mark the halfway point to the deadline set for achieving the 2030 Agenda and the Sustainable Development Goals, World Tourism Day with this year’s timely theme is another reminder of the collective commitments that we have made for the people and the planet. Only nature-based human development with a systematic, inclusive, and rights-based approach to nature-based solutions can leverage the potential for the large-scale transformative change needed to achieve the SDGs.
Let me close by sincerely thanking the Ministry of Tourism and Lands, the Sri Lanka Tourism Development Authority, and the organizing committee for inviting me today.