Study on Incorporating the Expectations of Domestic Tourists into Sri Lankan Hotels with special reference to Ceylon Hotels Corporation

JKW Abarajithan, Management Trainee, People’s Bank
B Sarangan, Assistant Relationship Manager, DFCC Bank PLC
After the end of the thirty years long civil war, business sector is recovering and in particular tourism is developing at an accelerated rate. Sri Lanka has been a popular destination for tourism from the colonial time and tourism industry creates huge income to Sri Lanka. Though Sri Lanka has been successful in attracting foreign tourists and Sri Lankan hotels have accommodated the expectations of international tourists, performance of domestic tourism sector has been limited in Sri Lanka. Therefore main purpose of this study is to investigate why the Sri Lankan Hotels do not focus on catering to the expectations of local tourists. Hence findings of this study would be useful to the Sri Lankan hotel sector to develop policies to cater to the requirements of local tourists and thereby develop the domestic tourism. This research was limited to the tourists of Group Hotels of Ceylon Hotels Corporation PLC. Conceptual framework was developed taking four factors in to consideration; room rate, service quality, locations & environment and staff assistance which directly influence the expectations of tourists. Quantitative methodology was adopted and structured questionnaires were used for data collection. Questionnaires were distributed to 100 domestic tourists who visited group hotels of Ceylon Hotels Corporation PLC situated in the different regions of the country. Descriptive analysis was used for data analysis. Results showed that Sri Lankan tourists are mostly concerned about the affordability of room rates and quality of service. Finally it has been recommended to adopt cost leadership strategy to incorporate the expectations of local tourists thereby domestic tourism can be improved.
Key words: Room rate, service quality, locations & environment and staff assistance  
Leisure management and tourism industry is one of the major components which generate huge income to Sri Lankan economy for the last several decades even amidst of all unfavorable situations such as war and natural disasters. Thus from the time of gaining independence from the British in 1947, Sri Lanka continues to attract foreign tourists thereby Sri Lanka has a growing Tourism Industry. Several aspects such as ancient cities & historic places, natural sites, indigenous medicine and plantation sector etc play an important role in attracting tourists towards Sri Lanka. Meanwhile development of accommodation facilities is a primary requirement for the promotion of tourism. Thus Sri Lankan Hotels have been successful in providing accommodation up to internationally reputed standards. These included the Galle Face Hotel, Grand Oriental Hotel, the Mount Lavinia Hotel, Queens Hotel and Suisse Hotel in Kandy, Grand Hotel and St. Andrews Hotel in Nuwara Eliya, Bandarawela Hotel and New Oriental Hotel in Galle etc. These hotels are used as prime accommodation facilities for foreign visitors. Hence Sri Lankan hoteliers have been successful in accommodating the expectations and preferences of foreign tourists.
Meanwhile local tourism also plays a significant role in the economy. Need for the development of local tourism must be emphasized particularly after the end of 30 years long civil war since people can move freely to all parts of the country. But in Sri Lanka domestic tourism has not been developed up to the standard of foreign tourism. In addition Sri Lankan hotels have failed to incorporate the expectations of local tourists. Therefore finding accommodation for domestic tourists has become a major problem that significantly affects domestic tourism. Therefore this study analyses the problem of poor performance of Sri Lankan Hotels in catering to the expectations of local tourists.
Research Objectives
  1. To identify local tourists’ expectations on Sri Lankan hotels.
  2. To recommend the strategies to be adopted by the Sri Lankan hotels to incorporate the expectations of local tourists thereby increasing their satisfaction level.
Significance of the Research
Domestic tourism is considered to be important for any country for economic, political and social reasons. Meanwhile domestic tourism has been developing at a rapid rate after the end of 30 years long civil war in Sri Lanka. Therefore findings of this study would be useful to the Sri Lankan hotels to incorporate the expectations of local tourists; hence Sri Lankan hotels can attract local tourists and position their hotels among local tourists. Therefore, domestic tourism will be developed and ultimately it gives value addition the Sri Lankan economy. Furthermore these findings can indirectly enhance social benefits such as harmony among communities and recreation by promoting local tourism.
Conceptual Model
The following conceptual framework has been developed to study the expectations of domestic tourists.

Source-Developed for this study
Conceptual framework shows that room rate, service quality, locations and environment and staff assistance are the customer expectations.
Research Methodology
Quantitative methodology was applied for this study. Thus survey method was applied.

Stratified random sampling method was employed for the selection of respondents. Thus 100 tourists were selected for the study and thus 10 tourists each from 10 different locations were comprised in this sample. The composition of hundred tourists is given below.
Hotel Suisse, Kandy                           - 10
Lihiniya Surf, Benthota                      - 10
Tissamaharama Resort                        -10
Queen’s Hotel, Kandy                                    - 10
Hotel Seruwa, Polonnarauwa             - 10
Kithulgala Rest House                        - 10
Grand Ella Motel                                - 10
Belihuloya Rest House                       - 10
Ambeypussa, Rest House                   - 10
Hotel Mihinthale                                 - 10
Data collection method
The questionnaire method was utilized for data collection. The questionnaire contained two main parts; Part 1-Expectations of customers and Part 2-Personal profile. Likert scale of 1-5 which ranges from “Strongly Disagree” to “Strongly Agree” was applied in the part I of the questionnaire to identify responses.
Data Analysis and data evaluation
Descriptive statistics were used for data analysis. Hence mean and standard deviation were derived for data analysis. Statistical package of SPSS 13.0 has been used for this purpose. Furthermore criteria shown in table 1 was adopted to evaluate mean values. This was established to determine the degree of customer expectations.
Table 1 Evaluation Criteria for Mean Values
1< X1 =< 2.33 2.34<X1=< 3.66
3.67< X1=<5
Low level
Moderate level
High level
Source-Developed for this study
Findings and discussion
Table 2 Mean and standard deviation values for tourist expectations
VariablesMeanStandard Deviation
Room rate3.250.33
Service quality3.400.25
Locations and environment4.010.45
Staff assistance3.910.44
Source- Survey Results
The above table presents that mean value of domestic tourists’ expectations for location and environment has taken a mean value of 4.01 whereas staff assistance to the domestic tourists has taken a mean value of 3.91. Hence these values fall in the category of high level satisfaction and it further shows that domestic tourists are highly satisfied on locations & environment and staff assistance. Therefore it can be derived that Sri Lankan hotels have incorporated domestic tourists’ expectations for location, environment and staff assistance successfully. Meanwhile tourists’ expectations for room rate and service quality have taken the mean values of 3.25 and 3.40 respectively. This reveals that both the mean values fall in the category of moderate level. Hence it shows that domestic tourists’ expectations for room rate and service quality were not met by the Sri Lankan hoteliers satisfactorily.
            It is learned that Sri Lankan hotels charge a fairly higher prices ranging from Rs.7500 upwards for rooms which can not be afforded by local tourists. Therefore Sri Lankan tourists refrain from accessing hotels and as a result Sri Lankan domestic tourism has been undeveloped for several decades. Furthermore service quality provided to local tourists also is less as compared to that of foreign tourists. Thus room space, facilities such as swimming pools and other entertainment facilities, soft operating equipments,  responsiveness and complaint handling method etc are applied not upto the standard expected by the Sri Lankan tourists. This also has contributed for less development of domestic tourism in Sri Lanka.

Conclusions and Recommendations
From the analysis, it has been proven that domestic tourist expectations relating to location & environment and staff assistance have been satisfactorily incorporated by Sri Lankan hotels whereas tourists were found to be moderately satisfied with regard to room rates and service quality. Therefore strategies have to be developed to provide rooms at an affordable price and to increase service quality to local tourists. Hence the following strategies have been suggested for this purpose.
            Sri Lankan hotels have to establish rooms and accommodation facilities targeting medium and low income range people. Thus Sri Lankan hotels have to launch separate segment for such income class people. Sri Lankan hotels can adopt cost leadership strategy where hotels can provide the same basic services or features at a least cost by increasing the operational efficiency (Johnson, Scholes & Whittington, 2008). In the meantime non value adding activities and services such as additional communication facilities, laundry facilities, etc can be dropped. Furthermore non value adding activities can be identified by undertaking separate surveys. By dropping non value adding activities, costs incurred on such activities can be controlled. Meanwhile threshold level of service quality also must be assured to ensure tourists’ expectations. Therefore hotels can manage in between less room charges and required service quality. Hence adaptation of cost leadership strategy can be recommended for the improvement of domestic tourism.
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