International Business Strategy

REBUILDING BUSINESS WITH EUROPEAN BUSINESS PARTNERS POST COVID – 19

FOR AITKEN SPENCE

Name | International Business | 14.10.2021

Contents
Introduction...............................................................................................................................................2
1. Tourism in Sri Lanka.............................................................................................................3
1.2 Inbound tourist arrivals from europe...........................................................................3
1.3 Implications on tourism over easter attack..................................................................4
1.4 Implications on tourism over Covid – 19......................................................................4
1.5 Sri lanka as a destination after COVID -19..................................................................5
1.5.1 PESTEL Analysis..........................................................................................................5
1.5.2 SWOT Analysis........................................................................................................7
2. Aitken Spence.........................................................................................................................9
2.1 Company overview..........................................................................................................9
2.2 Aitken Spence Business Model for Tourism.................................................................9
3. Action Plan............................................................................................................................11
Conclusion....................................................................................................................................17
References.....................................................................................................................................18

Introduction

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Outbreak of Covid – 19 pandemics coursed many negative implications over economies like Sri

Lanka that are dependent over tourism. First chapter discusses the tourism implications of Sri

Lanka with relevant to the challenges that were recently undergone. Next chapter discusses about

the role of Aitken Spence as a destination management company along with their business

models. Finally, an action plan is suggested to perform in collaboration for Aitken Spence

company and Sri Lankan government to uplift tourism in the country.

1.Tourism in Sri Lanka

Sri Lanka is an attractive tropical island surrounded by the Indian Ocean which is located

downwards to the Southern tip of India which is covered with hills, plains, historical archives,

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and beautiful beaches (Ranasinghe et al., 2019). Sri Lanka is offering a plethora of option for

tourists ranging from beaches, warm climate, cultural heritage, wildlife, and national parks (Lai,

2002). As per the World Tourism Organization, Sri Lanka is possessing an advantage of having

49 unique attraction sites, 91 rare attraction sites and 7 world heritage sites (The Island -

Features, 2019).

1.2 INBOUND TOURIST ARRIVALS FROM EUROPE

After the end of tragic Civil war, Sri Lanka continued to be a hot bed for the booming tourism

whereas 2018 recorded the highest tourist arrivals in the recorded history (E-tourism at a glance

Sri-Lanka, 2019). Europe has been the largest source of tourist traffic to Sri Lanka whereas they

showed a 55.4% share in the market by the end of 2020 (SLTDA | Sri Lanka Tourism

Development Authority, 2021).

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1.3 IMPLICATIONS ON TOURISM OVER EASTER ATTACK

The Sri Lankan tourism shocked deeply following the Easter bomb attack on 21 st April 2019 that

was targeted at several churches and luxury hotels in Colombo. International tourist arrival from

May 2019 was 37,802 whereas the following month June 2019 recorded a tourist arrival of

63,072. By the end of June over 1,008,449 visited Sri Lanka which is a decline of 13.4%

compared to the last year within the same period (SLTDA | Sri Lanka Tourism Development

Authority, 2020)

1.4 IMPLICATIONS ON TOURISM OVER COVID – 19

When the tourism was finally recovering from easter attack, it has resurfaced to the bottom with

the Covid – 19 outbreaks in the world. The pandemic has triggered an economic downturn

globally where the impact is severe for third world countries like Sri Lanka, whose income has a

larger proportion of reliance over tourism. The duration from 2020 – 2021 Sri Lanka did not see

any major tourist arrivals whereas from April 2020 to September 2021 tourist arrivals were only

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38,317 which is a drop of 92.5% compared to the previous years (SLTDA | Sri Lanka Tourism

Development Authority, 2021b)

The country was in Lockdown for most parts of this period and severity of the 3 rd wave

accustomed by the Delta variant led to red list Sri Lanka for several countries. Moreover,

quarantine requirements incorporated by heavier costs and durations, heavy air ticket charges,

closure of certain accommodations, new pandemic social norms and overall global economic

crisis that originated by the pandemic has become the major factors for decreasing the tourist

arrivals.

1.5 SRI LANKA AS A DESTINATION AFTER COVID -19

1.5.1 PESTEL Analysis

Political

Political environment is having a greater capacity to affect the tourism sector. Sri Lankan

government has engaged in uplifting infrastructure by the construction of roads, airports, hotels,

and ports. Also, Sri Lankan tourism board is conducting programs for marketing tourism in a

global level building effective strategic relationship. The diplomatic relationships that the

government is conducting with the other countries have a direct impact on tourism. The Sri

Lankan government also provides tax sanctions over the hotel establishments as an

encouragement for investors on tourism.

Economical

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Currency rates, tax rates, employments rates, economic growth are major variables in the

economic environment. Currently, Sri Lanka is facing a currency exchange crisis with

implication of decline of tourism as well as heavy foreign debt repayments. On the tourism

perspective, depreciation of currencies can place Sri Lanka as a cheaper place to travel for the

foreigners whereas as it can be used as an advantage.

Social

Despite the attractive locations, the unique socio-cultural aspects of Sri Lanka are one of the

major reasons why foreigners are visiting the country. Sri Lanka is having a rich cultural heritage

that last longer than 2500 years whereas cultural uniqueness in terms of beliefs, behaviors,

traditions festivals and religions are significant.

The huge range of Sri Lankan meals alongside the spice culinary are popular in the world and

some tourists are visiting the country to experience this diverse food culture. In addition to that

clothing styles, religious places, various cultural events like Kandy Perahera, New Year, Vesak

and generic hospitality of Sri Lankans create a big advantage in terms of Socio-economic factors.

Technological

Technological advancement can be incorporated to tourism especially when it comes to tourisms.

Marketing campaigns can be conducted through social media which is the easiest platform to

reach the intended customer segments.

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1.5.2 SWOT Analysis
Strengths Weaknesses

 Proven resilience over crisis such as  High air ticket charges

Terrorist attacks, civil wars, and natural  Quarantine requirements

disasters.  Tourism demotivation due to new safety

 The boom in domestic tourism for certain protocols like social distancing,

destinations sanitization and wearing masks.

 The adoption capacity for pandemics  Risk of air travel and traveling as crowds

 High focus towards the promotion of  Perceptions of the residents towards the

Special Interest Tourism foreign travelers.

 Ability for small group clustering.  Sri Lanka being red listed for entry by

 Enhancement of responsible tourist several countries

behavior – Bio Bubble

 Government support for tourism

Opportunities Threats

 Diversification of tourism (nature trails,  Global Economic Recession

biodiversity, rural tourism, Ayurveda,  Employment loss of tourism for Tour

Meditation) guides, Hotels, and Event Planners.

 Focus towards promoting niche-markets  Lower disposable income of the people

 Innovations for conducting events such as due the economical implications

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 outdoor events.  Mutation of virus into new variants

 Social media platforms and online media  Travel restrictions

promotions

 Changes of perception of traveling within

the new generation in seek of experiences

and attractive photography.

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2.Aitken Spence

2.1 COMPANY OVERVIEW

Aitken Spence PLC is a leading conglomerate from Sri Lanka who is a key player in many

sectors such as Hotels, Travels, Logistics, Plantation, Maritime, Apparels, Printing and Power

generation. Aitken Spence Travels (Pvt) Ltd and Aitken Spence Hotels PLC are two subsidiaries

that are 100% owned by Aitken Spence PLC (Integrated Reporting & Financials, 2021).

2.2 AITKEN SPENCE BUSINESS MODEL FOR TOURISM

Aitken Spence Travels (Pvt) Ltd

Aitken Spence Travels acts as a destination management company that is providing opportunities

for experiencing the best in Sri Lanka is striving for best value propositions to partners. The

company is involved with planning and executing unique tours that are customized to the diverse

tour needs and requirements of the customer. They are following their principles along with the

motto ‘to go the extra mile’ (Tour Operators Sri Lanka | About Us | Aitken Spence Travels,

2020).

Aitken Spence Hotels PLC

Aitken Spence Hotels is operating 22 hotel and resorts in Sri Lanka, India, Maldives, and Oman

under the brands Heritance and Adaaran which are unique hotels that are careering the variance

needs of the customers. Heritance Hotels are the local chapters and located at key tourist

destinations. Their hotels like Heritance Kandalama, Ayurveda Mahagedara, and Tea Factory are
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renowned for distinctive interior, authentic experience and eco friendly nature (Resorts in Sri

Lanka l About Us l Aitken Spence Hotels Sri Lanka, 2020).

Business Partners

Source: (Our Partners, 2019)

Aitken Spence business model for Tourism is a combination of Aitken Spence Travels, Aitken

Spence Hotels, and strategic partners. The partners compromises of foreign travel agencies,

airlines, and hotel chains. The partnerships are mainly formulated on the base of commissions

and contractual obligations for delivering services. For examples, travel partners from Europe are

promoting the tours for their localities and direct them to Aitken Spence Travels where they are

paid a commission based upon the total tour cost per customers. Likewise, Hotels like RIU are

partnered with Aitken Spence as a mean of international expansions.

As explained Aitken Spence Travels facilitates the tours along with visa support, tour planning

and execution and all the tours are that happened through Aitken Spence Travels are

accommodated in Aitken Spence Hotels. Thereby, they have a chance to convert each Travels

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customer as the Hotels customers as well. In addition to that most other tourists seek the

accommodations in Aitken Spence Hotels.

3.Action Plan

The reported Covid-19 cases in Europe and Sri Lanka is showing a downwards trend indicating

that the countries will soon be returned to ordinary ways of living and Sri Lanka can open their

gates to European tourists.

Source: (Mathieu, 2020)

World will soon be a hot bed for tourism given that people were trapped inside houses and

borders for whole two years at a stretch. Even though, the gates are not opened in many countries

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it is high time to create awareness to increase the demand for tourism in Sri Lanka in a global

context where when the opportunity comes Sri Lanka will be a high priority tourist destination.

As a company Aitken Spence along will not be able to conduct this individually whereas it

should be a collective effort along with the support from the government.

Step 01 - Understanding the role of government in tourism development

 Ensuring safety and hygienic protocols within the country to limit the exposure to the

virus

 Development of the Bio-bubble concepts and ensuring that the protocols relevant the

concept are properly adhered.

 Visa on arrival

 Providing tax sanctions and low interest financing for tourism related projects

 Development of sustainable travel destinations

 Lifting of industry standards

 Enhancing the conservation, preservation, and management of natural and cultural assets

Step 02 - Understanding visitors

The company should first understand the types of visitors that are touring Sri Lanka and what are

their expectations in visits. Some might love to see the ancient monuments and embrace the

cultural aspects while some would require the relaxation or adventure. Therefore, it is necessary

that the customer need as wants are comprehensively identified and addressed.

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Thereby, government is having a responsibility to recognize these segments and increase

infrastructure facilities (access, sanitation, safety, security) and branding for those segments

enabling a comprehensive experience for the visitors. On the other hand, Aitken Spence Travels

is to customize their tour packages as per the requirements of the travelers as well as the Aitken

Hotels should be accustomed to providing experiential offerings like culinary, culture, Ayurveda

medics, entertainments and so on.

Step 03 - Marketing & Effective communication

Brand development

 Defining a clear brand for Sri Lankan tourism that provides meaning for values,

personalities, and target customer value propositions.

 Creating a brand that compromise of a logo, extensions, taglines, and guidelines.

 Development of brand identity through an outsourced agency.

Market Development

 Development of plans and strategies for the markets recognized above (current, mainstream,

and source markets).

 Formulation of strategies development plans for the niche markets.

 Development of sales channels given the global trend toward independent traveling with

lesser intermediaries.

Constructive advertising

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Launching an advertising campaign that is centered around the created brand identity in Europe

targeting the intended customer segments. The advertising to be done on TVs, radios, social

media and through posters, leaflets, and billboards.

Social media can be used as the easiest and most cost-effective platform for the advertising as

follows

 Content development on Instagram, Facebook, You Tube and other platforms for

enhancing brand awareness and promoting destinations and experiences.

 Establishing partnerships with the Travel content developers on YouTube enabling them

to publish Vlogs and reviews about their experiences in Sri Lanka. Those people are

having a huge global reach and people nowadays are taking liberty at watching such

content and deciding their tours. This will help

 Nowadays Tik Tok platform is more occupied by millennial and Gen-z age groups

whereas they are more likely to perform experiential traveling. In such a context adopting

novelty advertising tricks through creating short Tik Tok videos aimed at promoting

tourism can reach a massive, targeted customer segment.

Public Relations and Staging

The government should arrange diplomatic tours to European countries and come up with

agreements with their authorities to promote Sri Lanka as a tourist destination for their citizens.

Similarly, conducting cultural events, activities, exhibitions, and road shows in those countries

aimed at promoting tourism.

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On the other hand, for Aitken Spence, the company can renew their arrangements with the

existing partners offering more incentives and acquire new sustainable partners with the support

of the government. They can also introduce new package offers, discounts, loyalty programs and

other relevant incentives for the Aitken Spence Hotels customers if travelled through Aitken

Spence Travels.

Step 04 – Time Frame

November December January February

Discussion with government

Understanding the visitors
Brand definition
Creating of logo and taglines
Outsourcing for brand identitty creation

Planning for market development

Srategic development for niche markets
Identification of sales chanels

Advertising on mainstream medias

Initiating parnerneships with content creatros
Creation of trends

Diplomatic meetings with the authorities

Partnership meetings
Cultural exhibitions and promotional events
Introduction of travel packages
0 5 10 15 20 25 30 35
Days of the Month

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Conclusion

Tourism in Sri Lanka was largely challenged due to the Easter attack and Covid – 19 outbreaks.

This has negative implications over destination management companies like Aitken Spence. The

report recognized an action plan to increase the tourism in the country within next 4 months as a

collaboration of the company as well as the government.

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References
1. Ranasinghe, R., Kumudulali, U., & Kaumadi Ranaweera, A. (2019). The role of park

attributes in visitor satisfaction: evidence from Minneriya National Park in sri lanka. Journal

of Sustainable Tourism and Entrepreneurship, 1(2). https://doi.org/10.35912/joste.v1i2.218

2. Fernando, I. N. (2020). Tourism Competitiveness by Shift-Share Analysis to way-forward

Destination Management: A case study for sri lanka. Journal of Tourism and Services,

11(21), 88–102. https://doi.org/10.29036/jots.v11i21.139

3. Strategic Location – Investment Opportunities – Board of Investment of Sri Lanka. (2011,

July 31). https://investsrilanka.com/strategiclocation/#:%7E:text=Sri%20Lanka%20is

%20situated%20strategically,shipping%20lines%20and%20airfreight%20services.

4. Lai, T.-W. (n.d.). Chapter Twenty-four Promoting Sustainable Tourism in Sri Lanka.

http://www.parasnis.net/update181004/e_publi/gplinkeco/26chapter24.pdf

5. The Island - Features. (2019). Island.lk. http://www.island.lk/2000/06/13/islfetrs.html

6. E-tourism at a glance….. Sri-Lanka. (2019). Retrieved October 13, 2021, from

https://agrilife.org/ertr/files/2012/09/SriLanka_2.pdf

7. SLTDA | Sri Lanka Tourism Development Authority. (2021, February 3). SLTDA.

https://www.sltda.gov.lk/en/tourism-industry-report

8. SLTDA | Sri Lanka Tourism Development Authority. (2020, December 31). SLTDA.

https://www.sltda.gov.lk/en/tourism-industry-report

9. Wikipedia contributors. (2021, October 7). Tourism in Sri Lanka. Wikipedia.

https://en.wikipedia.org/wiki/Tourism_in_Sri_Lanka#cite_note-12

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10. Nishla, M. N. F., & Rinosa, K. (2019). Safety and security in tourism: a strategic approach

for tourism industry of Sri Lanka to recover from Easter Sunday attack.

11. SLTDA | Sri Lanka Tourism Development Authority. (2021b, September 30). SLTDA.

https://sltda.gov.lk/en/monthly-tourist-arrivals-reports-2021

12. Integrated Reporting & Financials. (2021, June 5). Aitken Spence.

https://aitkenspence.com/corporate-governance/integrated-reporting-financials

13. Tour Operators Sri Lanka | About Us | Aitken Spence Travels. (2020, December 15). Aitken

Spence Travels. https://www.aitkenspencetravels.com/about-us.html

14. Resorts in Sri Lanka l About Us l Aitken Spence Hotels Sri Lanka. (2020, May 15).

AitkenspenceHotels. https://www.aitkenspencehotels.com/about-us.html

15. Our Partners. (2019, August 12). Aitken Spence. https://aitkenspence.com/about-us/our-

partners

16. Mathieu, E. (2020, March 1). COVID-19 Data Explorer. Our World in Data.

https://ourworldindata.org/explorers/coronavirus-data-explorer?

zoomToSelection=true&time=2020-03-01..2021-06-

16&facet=none&pickerSort=asc&pickerMetric=location&Metric=Confirmed+cases&Interva

l=7-day+rolling+average&Relative+to+Population=true&Align+outbreaks=false&country=

%7EEurope

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