69084 The World Bank Group Promoting Nature-Based Tourism for Management of Protected Areas and Elephant Conservation in Sri Lanka Table of Contents Chapter 1 Introduction and Context .......................................................................................................... 7 1 Introduction ........................................................................................................................................... 7 Chapter 2 Nature-Based Tourism: Prospects and Potential .................................................................... 10 2.1 Introduction ...................................................................................................................................... 10 2.2 Tourism in Sri Lanka ......................................................................................................................... 10 2.3 The Approach .................................................................................................................................... 14 2.4 The Economic Impacts of Tourism: Spending Patterns .................................................................... 16 2.5 Economic Impact of Nature Tourism ................................................................................................ 17 2.6 Increasing the Economic Impact of Nature Tourism........................................................................ 20 2.7 Opportunities for Financing National Parks and Forest Reserves .................................................... 24 2.8 Revenue Leakages ............................................................................................................................. 30 2.9 Conclusions ....................................................................................................................................... 31 Chapter 3 The Impediment to Elephant Conservation around Yala National Park—The Human-Elephant Conflict……………………………………………………………………………………………………………………………………………………33 3.1 Introduction: Tourism and Conservation .......................................................................................... 33 3.2 The Approach .................................................................................................................................... 34 3.3 The Anatomy of Households and Livelihood Activities..................................................................... 37 3.4 Human-Elephant Interactions ........................................................................................................... 43 3.5 Local Benefits of Tourism and Opportunities for Financing Conservation ....................................... 47 3.6 The Human-Elephant Conflict around Yala National Park, Sri Lanka: Conclusions .......................... 49 Chapter 4 Conclusion ............................................................................................................................... 52 4.1 Revenue Potential from Nature-Based Tourism ............................................................................... 52 4.2 The Impediment to Elephant Conservation—Human-Elephant Conflict.......................................... 53 References .............................................................................................................................................. 54 Boxes Box 2.1 Willingness to pay ......................................................................................................................................................... 25 Box 2.2 Development scenarios for the parks/reserves ............................................................................................... 27 Box 3.1 Survey Design ................................................................................................................................................................. 35 Box 3.2 Chena cultivation and optimal habitats for elephants ................................................................................... 40 2 Figures Figure 2. 1 International tourist arrivals to Sri Lanka, 1998-2008 .......................................................................... 11 Figure 2.2 Tourist arrivals by region, total ........................................................................................................................ 11 Figure 2.3 Tourist arrivals by region, percent.................................................................................................................. 12 Figure 2.4 Perceptions of park attributes............................................................................................................................ 22 Figure 2.5 Percentage of park visitors who would return to Sri Lanka ................................................................. 24 Figure 2.6 International park tourists’ willingness to pay park entrance fees ................................................... 25 Figure 2.7 International nonpark tourists’ willingness to pay park entrance fees ............................................ 26 Figure 2.8 Local park tourists’ willingness to pay park entrance fees .................................................................... 28 Figure 2.9 Local nonpark tourists’ willingness to pay park entrance fees ........................................................... 28 Figure 3.1 Tenure rights on land where chena occurs in areas adjoining YNP .................................................. 38 Figure 3.2 Tenure rights on other land where chena occurs ..................................................................................... 38 Figure 3.3 Chena land use ......................................................................................................................................................... 38 Figure 3.4 Percentage of farmers engaged in seasonal chena cultivation ............................................................. 39 Figure 3.5 Seasonality of elephant problems .................................................................................................................... 44 Tables Table 2.1 Visitation at major attractions ............................................................................................................................. 13 Table 2.2 Public sector revenue from tourism (in SL Rs millions) ........................................................................... 14 Table 2. 3 Distribution of tourists, by type and location ............................................................................................... 15 Table 2.4 Number of international tourists by country of residence and purpose of visit, 2007 .............. 16 Table 2.5 Tourist expenditures per person, excluding airfare ................................................................................... 17 Table 2.6 Breakdown of expenditures per person per trip ($) .................................................................................. 17 Table 2.7 Direct and indirect economic impact of nature-based tourists in 20071 ........................................... 18 Table 2.8 Economic impacts of nature-based tourism spending in 2007 .............................................................. 19 Table 2.9 Overall site satisfaction by park tourists, percent ....................................................................................... 21 Table 2.10 Current and potential fees from visitors to National Parks/ Forest Reserves ............................. 30 Table 3.1 Details of sample allocation and coverage ...................................................................................................... 35 3 Table 3.2 Characteristics of chena cultivation................................................................................................................... 39 Table 3. 3 Household characteristics ................................................................................................................................... 41 Table 3.4 Average income from different economic activities ................................................................................. 42 Table 3.5 Main issues facing chena cultivation ................................................................................................................. 42 Table 3.6 Attributes of elephant encounters...................................................................................................................... 43 Table 3.7 Determinants of the likelihood and frequency of elephant encounters ............................................. 44 Table 3.8 HEC-related mitigation expenditures undertaken by farmers (values in SL Rs and percentage of households with positive expenditures in brackets) ................................................................................................ 45 Table 3.9 Effectiveness of electric fences (all values in percent) .............................................................................. 46 Table 3.10 Determinants of HEC losses .............................................................................................................................. 47 Table 3.11 Tourism employment and income in the survey area 1 ......................................................................... 48 Table 3.12 Breakdown of expenditures per person (US$) ........................................................................................ 48 Table 3.13 Revenue generation potential in YNP ........................................................................................................ 49 Annexes Annex 1: A Stylized Model of HEC without Elephant Dynamics ........................................................................ 55 Annex 2: Table A2.1 Tourist arrivals by country of residence & purpose of visit - 2007........................ 57 Annex 3 Tourist survey design and methodology ................................................................................................... 59 Annex 4 Tourist survey, 2008 .......................................................................................................................................... 61 Annex 5 Perceptions of the HEC and tourism-related benefits .......................................................................... 72 4 SUMMARY The Government of Sri Lanka’s ten-year development framework aims at accelerating growth while ensuring a path of sustainable development and prioritizing conservation of the country’s natural heritage. In line with these priorities this study focuses on promoting nature-based tourism for enhancing protection of natural assets, in particular elephants which are a flagship species while promoting growth in the tourism industry. The study identifies development opportunities that increase tourism revenues and offers an assessment of the human elephant conflict which is the primary impediment to long term elephant conservation. Tourism has remained a resilient contributor to the economy of Sri Lanka. With improved promotion and niche markets that capitalize upon the country’s rich natural assets, tourism’s contribution to the economy could increase substantially. An assessment based on a tourism survey conducted in a small cluster of national parks in the Southern Province indicates potential for increased revenue from nature-based tourism in Sri Lanka which could contribute towards conservation of the protected areas and flagship species such as the elephant. The current pattern of tourism does not capitalize on the country’s potential and comparative advantage. Expenditure patterns that emerged from the survey indicate that travelers who visit the country are typically on a tour package and spend meager amounts compared to individual (non- package) traveler. The highest spending tourists are those who visit national parks and are non- package travelers. Of the surveyed international travelers, over 76 percent were on packaged tours, and among them, 96 percent of the packages were purchased outside Sri Lanka. These findings have policy implications for the country and suggest that incentives to promote individual travel, which could create high-value niche markets, raise revenue from the sector, and possibly decrease revenue leakages by reducing the number of foreign-purchased travel packages. Another simple method of increasing tourism revenue would be through increasing the average length of a tourist’s stay. With almost 70 percent of tourists identifying “pleasure� (e.g., recreation, sun-and- sand, cultural, natural, wildlife tours) as their main reason for travel, increasing a nature tourist’s duration in Sri Lanka could be accomplished through better marketing of its national parks. Currently the vast majority of tourists do not visit the parks, but the survey reveals a strong willingness to add a park visit to their trip. Along with better marketing, improved conditions of the national parks (e.g., less traffic congestion, improved infrastructure facilities, more shopping opportunities, and diverse activities) have the potential to increase tourism revenue. To assess the scope for raising additional revenue, the tourist survey was used to ask nature tourists their willingness to pay park entrance fees (1) to enjoy the national parks as they currently stand and (2) for specific improvements in the park. Results from the survey indicate that both international and local tourists are willing to pay higher than their current entrance fees, for park improvements as well as for the parks’ current conditions. The findings imply that simply imposing a 30 percent increase on park entrance fees would result in an increase in park revenues of more than $369,000 per year (in a subset of the surveyed parks). With improved park conditions and with a more proactive tourism initiative that encourages current nonpark tourists to visit, entrance fee revenues have the potential to increase to more than $6 million annually, representing over $55 million in 10 years. 5 Elephant Conservation and the Human-Elephant Conflict Tourists visit Sri Lanka’s parks mainly to view the charismatic and celebrated wild elephants that form the backbone of Sri Lanka’s nascent ecotourism industry. Currently Sri Lanka provides the best opportunities of viewing wild Asian elephants in the world. While there is vast scope to capitalize on this natural tourist asset, there are serious conservation challenges that need to be addressed for its full economic potential to be realized. Elephants have large home ranges that are not adequately provided for by protected areas and national parks, and they are edge species that prefer the vegetation found in degraded and secondary forest habits. Consequently, more than two-thirds of the wild elephant population is found outside of protected areas, grazing on agricultural lands and disturbing and threatening the livelihoods of local farmers, chena households in particular. This friction between humans and elephants, termed human-elephant conflict, presents a development challenge between supporting the livelihoods of those living in close proximity to national parks and conserving Sri Lanka’s flagship species, the wild elephant. Furthermore, this study finds that the local residents who suffer the consequences of living near elephants receive only a small share of the benefits accrued from the nature-based tourism industry that thrive on wild elephants. Policy makers are thus confronted with the challenge of developing strategies that link local benefits to the nature tourism industry. The study suggests there is great potential in devising strategies that build on development opportunities in nature tourism, particularly those that ensure the conservation of wild elephants and their habitats while alleviating the human-elephant conflict. Improving park management and locating fences along ecological rather than administrative boundaries can minimize human-elephant interactions. Healthy elephant herds can boost ecotourism opportunities, adding value to local parks; the increased revenue generated can be used to compensate farmers located near elephant habitats who inevitably experience losses. Results from a livelihood survey conducted among 800 households in the vicinity of Yala National Park indicate that the cost of mitigation measures (e.g., electric fences, firecrackers, shouting) used to defend crops against wild elephants are quite low, as are the realized crop losses. These findings suggest that a compensation scheme may be successful in facilitating a flow of benefits to local communities while also ensuring the conservation of wild elephants. In short the study indicates that elephants remain a considerable economic asset to Sri Lanka and there is much scope to increase their economic contribution through humane and judicious environmental stewardship, rather than environmental destruction. 6 Chapter 1 Introduction and Context 1 Introduction 1. Sri Lanka has a tradition of conservation dating back more than 2,000 years, to a time when edicts called for the preservation of wildlife in defined areas. Village communities systematically organized their landscape, locating irrigation tanks and cultivated areas in low-lying land and their settlements at higher levels. Catchments in hilly areas were left under forest cover. The value of the nation’s biodiversity has not gone unrecognized in recent times, as governments enacted laws aimed at the protection of biological resources. With the highest biodiversity per unit area in Asia, Sri Lanka is ranked as a global biodiversity hot spot.1 2. Despite its efforts, the country is currently confronted with serious degradation of its ecosystems and the biodiversity they host. According to a recent survey, 33 percent of Sri Lanka’s inland vertebrate fauna and 61 percent of its flora are threatened. Around 33 percent of the threatened biodiversity is endemic to Sri Lanka. Twenty-one species of endemic amphibians have not been recorded during the past 100 years, and these species could, for most purposes, be considered extinct. One in every 12 species of inland indigenous vertebrates of Sri Lanka is currently facing an immediate and extremely high risk of extinction in the wild.2 Experts suggest that this trend will continue unless more systematic and stringent corrective measures are taken. 3. The Government’s 10-year development framework aims at accelerating growth with an emphasis on equitable development. At the same time, it gives priority to a “land in harmony with nature.�3 The framework commits Sri Lanka to a path of sustainable development and identifies the country’s unique biodiversity as part of the country’s natural heritage and a high conservation priority. Protection of the environment is observed in Sri Lanka, although not as comprehensively as needed. Sri Lanka was the first country in Asia to prepare a national environmental action plan. The original 1992 plan was subsequently updated as the document “Caring for the Environment 2003–2007: The Path to Sustainable Development.� More than 80 legislative enactments related to environmental management are in place. The legislation led to the present system of protected areas that covers 14 percent of the country’s total land area. Though this is large by the standards of South Asia it is completely insufficient to ensure protection of the country’s natural heritage and provide the habitat needed for the protection of large iconic species such as Sri Lanka’s elephants and leopards. Sri Lanka also demonstrates a commitment to conservation in terms of administrative structure. The three government agencies directly responsible for environment and protected area (PA) management—the Department of Wildlife Conservation, Forest Department, and the Central Environmental Authority— have remained within the ministry in charge of environment, despite the commonplace fragmentation of other sectors and ministries, until the recent election in April 2010 saw the Department of Wildlife 1 Biodiversity Conservation in Sri Lanka—A Framework for Action, Ministry of Forestry and Environment, 1998. The concept of a biodiversity hotspot is due to the celebrated biologist Myers analysis and is now used globally to identify conservation areas at high risk. To qualify as a hotspot, a region must meet two strict criteria: it must contain at least 0.5 percent or 1,500 species of vascular plants as endemics, and it has to have lost at least 70 percent of its primary vegetation. Around the world, at least 25 areas qualify under this definition, with nine others possible candidates. These sites support nearly 60 percent of the world's plant, bird, mammal, reptile, and amphibian species, with a very high share of endemic species. 2 IUCN Sri Lanka and the Ministry of Environment and Natural Resources (2007), The 2007 Red List of Threatened Fauna and Flora of Sri Lanka, Colombo, Sri Lanka. 3 The Government’s framework called the Mahinda Chintana (MC): Vision for a New Sri Lanka was presented at the Sri Lanka Development Forum in 2007. 7 Conservation (DWC) moved to the Ministry of Economic Development due to DWC’s potential for nature based tourism . Furthermore, all three institutions have recently undergone institutional reforms with a move toward decentralization and empowerment of field staff, market-based incentives, more accountability and transparency, and wider stakeholder participation in planning and decision making. 4. With undeveloped land becoming increasingly scarce, Sri Lanka’s natural forests and protected areas are under constant and unrelenting pressure. Despite reforms, conventional command-and- control approaches are becoming less and less effective in addressing these problems, since they do little to tackle the fundamental causes of environmental degradation. To address the root causes there is a need to create economic incentives for sustainability in ways that harmonize competing interests and create win-wins for conservation and poverty alleviation. 5. Experience in countries as diverse as Australia, New Zealand, Costa Rica, Tanzania, and Kenya has shown that if judiciously managed, nature-based tourism can play a crucial role in providing the resources and economic incentives needed for environmental stewardship. It presents an opportunity to go beyond simply mitigating the industry’s “footprint� by providing revenue for the management and conservation of natural assets. By generating local employment and growth, it can create additional constituencies in support of sustainability and harmonize potentially conflicting interests on the use of forests and biodiversity. 6. It is often argued that Sri Lanka is well endowed with natural assets and able to reposition itself as a more attractive tourist destination. The proximity and juxtaposition of national parks to cultural attractions and beaches presents an opportunity to forge new links of “nature, culture, and beaches� and lure a more lucrative segment of the tourist market. Unlike its regional competitors, Sri Lanka has a uniquely high density of natural and cultural assets. These include the renowned “cultural triangle�4 and a rich array of “charismatic� and celebrated species, such as elephants and leopards that can form the basis of a highly lucrative ecotourism industry. Sri Lanka has the highest density of elephants in Asia and provides the best opportunities of viewing wild Asian elephants in the world, and Yala National Park is reported to have the highest density of leopards per unit area in the world. Globally, nature-based tourism is displaying a rate of growth far in excess of the beach and sun product lines. And yet in Sri Lanka, less than 10 percent of foreign tourists ever visit any of the country’s national parks, which are considered to be among the best in Asia. 7. It is in this context that this policy note seeks to examine the scope for enhancing protection of Sri Lanka’s natural assets through nature based tourism as an instrument for conservation with a specific focus on elephant conservation. Nature based tourism is defined for the purposes of this study as tourism within the protected area network of the country. The study begins with a brief overview of the tourism sector and recent trends. It then reports on the results of a contingent valuation exercise that assesses the earning potential of the national parks sector as a tourism asset. This is followed by a more detailed analysis of human-elephant conflict and the scope for remedying the problem through revenues generated by tourism. A key objective is to explore two seemingly distinct , but in fact related issues - the extent of economic benefits that can be derived from conservation and determine ways of 4Sri Lanka’s Cultural triangle is situated in the centre of the island and covers an area which includes the World Heritage cultural sites of the Sacred City of Anuradhapura, the Ancient City of Polonnaruwa, the Ancient City of Sigiriya, the Ancient City of Dambulla and the Sacred City of Kandy. Due to the constructions and associated historical events, some of which are millennia old, these sites are of high universal value; they are visited by many pilgrims, both laymen and the clergy (prominently Buddhist), as well as by local and foreign tourists. 8 addressing one of the main perceived problems and costs of elephant conservation – the human elephant conflict. 9 Chapter 2 Nature-Based Tourism: Prospects and Potential 2.1 Introduction 8. Tourism is a significant contributor to the economy of Sri Lanka. It ranks fourth in the country in terms of foreign exchange earnings (US$384.4 million in 2007), employs more than 60,000 workers directly and perhaps as many as 300,000 indirectly, and accounts for more than 2.3 percent of gross domestic product (GDP). It is viewed as a growth sector whose contribution could substantially increase with improved promotion and the creation of niche markets that capitalize upon the country’s rich natural assets. The aim of this chapter is to explore the revenue potential and economic prospects of nature-based tourism in a small cluster of national parks in the Southern Province as an indicator of the potential for nature based tourism financing management of protected areas with a special emphasis on conservation of the Asian elephant which is a flagship species and the main attraction in protected areas. As in most developing countries, Sri Lanka too has limited funding for conservation of protected areas. However, if the natural asset base of the protected area network can be utilized to generate revenue through nature tourism towards management of the protected areas and the charismatic species living in the national parks, sustainable financing of conservation would not be a problem any longer. 9. The chapter begins with a brief overview of the industry and an analysis of the tourists who visit. It identifies visitor perceptions of the nature-tourism experience in these parks and explores ways to further promote tourism opportunities in the national park system. The assessment is based on a tourism survey undertaken between October 2008 and January 2009 in four national parks (Bundala, Minneriya, Uda Walawe, and Yala) and one forest reserve (Singharaja). Section 2.2 then identifies the opportunities and challenges the Government may face in raising further revenue from these parks. 10. Nature-based tourism has direct impacts on the economy through tourist spending in the immediate vicinity of the park, as well as indirect effects through the many linkages between the tourism sector and the rest of the economy. These are captured through an input-output (I-O) matrix that provides estimates of the impacts of tourist spending on gross value-added, wages, and tax revenue.5 11. The focus is largely on the most lucrative segment of the tourist market—international arrivals, which constitute the majority of revenues generated across a wide variety of activities and in numerous settings, including the national park system. Also included in the analysis are tourists who did not visit the parks. They represent the majority of tourist arrival to the country and are seen as an un-tapped source that could be harnessed in a first step of an overall tourism strategy for the country. 2.2 Tourism in Sri Lanka 12. Tourism in Sri Lanka has displayed considerable resilience to both conflict and natural disasters, such as the 2004 tsunami. The period between 2002 and 2004 was the high point for tourism, with arrivals reaching more than 500,000 per year by 2003. This trend began to reverse through 2005 and 2006 with the escalation of the civil war and the tsunami, which devastated the region. Still, numbers have not plunged to the lows of 1998 and 2001 (Figure 2.1). 5 Unfortunately, a similar matrix could not be constructed for employment. 10 Figure 2. 1 International tourist arrivals to Sri Lanka, 1998-2008 600,000 500,000 400,000 Tourist arrivals 300,000 200,000 100,000 - 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Source: Sri Lanka Tourism Development Authority (2004, 2005, 2006, 2007). 13. There is a gradual change in the geographic composition of tourist arrivals, with an ever- increasing number of visitors from South Asia. Figure 2.2 and Figure 2.3 present total arrivals by region. Significant and increasing shares are from Asia, while the numbers and portion of Western European arrivals have decreased; represented more than 60 percent in 1998 and a low of 40 percent by 2007. Fifty percent of the Asian arrivals are from India, and nearly half of the Western European arrivals are from the United Kingdom. This trend has been stable over time and is unlikely to change. Other significant arrivals appear from the Maldives and Germany. Many of the other regions experienced only modest growth in terms of arrivals. Figure 2.2 Tourist arrivals by region, total 600,000 500,000 Australasia 400,000 Asia Tourist arrivals Af rica Middle East 300,000 Eastern Europe Western Europe Latin America & Caribbean 200,000 North America 100,000 - 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Source: Sri Lanka Tourism Development Authority (2004, 2005, 2006, 2007). 11 Figure 2.3 Tourist arrivals by region, percent 100% 80% Australasia Asia Tourist arrivals 60% Af rica Middle East Eastern Europe Western Europe 40% Latin America & Caribbean North America 20% 0% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Source: Sri Lanka Tourism Development Authority (2004, 2005, 2006, 2007). 14. The main reason for travel, according to a resounding 67 percent of respondents, is “pleasure,� which includes recreation, sun-and-sand, spas, cultural, natural, ecotourism, and wildlife tours (Annex 2: Table A2.1). This is true even with the negative backdrop of the war. Recommendations by friends or family and package deals rounded off the top reasons for visiting Sri Lanka, which also provides evidence that prior experience is important and that tour operators feel confident in packaging Sri Lanka with other places of interest. The vast majority arrive on a package tour and spend 8 to 14 days, with the median visitor moving closer to the 14-day mark. Repeat visits are common too. Those who stayed for 1 to 3 nights in the past were staying a bit longer, and some were staying beyond three weeks. The data indicate that the “two-week rule� was even more pronounced, with more than half of the respondents claiming trips with an 8 to 14 day interval. 15. Beyond the beaches, the most visited sites are the zoological and botanical gardens. These are followed by trips to the Cultural Triangle, which include tours of ancient cities, tanks (man-made reservoirs), and spiritual sites (Table 2.1). The next most frequented sites, by locals and foreigners alike, are the wildlife parks on safari-like experiences featuring observation of elephants, leopards, exotic birds, reptiles, and marine biodiversity. Site preferences have remained fairly stable over time. Of the noticeable patterns, visitation to wildlife parks appears to have fallen since 2004, whereas visits to museums have risen dramatically. Conferences in the capital, Colombo, also provide important visitor activities, albeit primarily for the local population. 16. Increasing visitation is the first step in fostering greater income from the tourism sector; the next is increasing the expenditures of tourists. Table 2.2 summarizes visitor information in terms of the revenue generated from these tourism activities.6 The most striking observation is that the majority of public revenues are generated from international tourists, with levies and taxes comprising over half of 6 Note that, strictly speaking, the totals in the table should not include revenue from the local population— since spending by the local population is just a redistribution of wealth and not new money coming into the economy from abroad. 12 the annual revenue. Under the current pricing regime, foreign tourists are responsible for nearly 93 percent of the revenues generated by these tourist activities. Table 2.1 Visitation at major attractions Sites 2004 2005 2006 2007 % 2007 9 Cultural Triangle 779,101 811,341 614,005 650,364 12.3 Local 1 532,721 700,898 475,773 545,781 10.3 Foreign 2 246,380 110,443 138,232 104,583 2.0 Botanical Gardens 3 1,637,740 1,597,690 1,493,851 1,673,106 31.6 Local 1,399,051 1,487,321 1,343,713 1,559,347 29.5 Foreign 238,689 110,369 150,138 113,759 2.2 Zoological Gardens 4 1,911,570 1,887,250 1,489,327 1,970,592 37.3 Local 1,659,325 1,752,244 1,310,425 1,815,282 34.3 Foreign 252,245 135,006 178,902 155,310 2.9 Wild Life Parks 5 553,039 446,403 482,060 421,692 8.0 Local 464,006 388,962 397,862 363,436 6.9 Foreign 89,033 57,441 84,198 58,256 1.1 Museums 6 23,833 370,950 186,072 260,743 4.9 Local - 355,669 172,301 251,703 4.8 Foreign - 15,281 13,771 9,040 0.2 BMICH 7 434,060 504,455 919,405 310,725 5.9 Local 432,510 502,335 916,845 310,100 5.9 Foreign 1,550 2,120 2,560 625 0.0 Total 5,339,343 5,618,089 5,184,720 5,287,222 100.0 Local 4,487,613 8 5,187,429 4,616,919 4,535,549 85.8 Foreign 827,897 8 430,660 567,801 751,673 14.2 1 – Includes Alahana Museum, Jethavana Museum, Abeygiriya Museum, Dambulla (Museum). and Sigiriya. 2 – Includes Anuradhapura, Polonnaruva, Kandy, and Sigiriya, 3 – Includes Peradeniya, Hakgala, and Gampaha. 4 – Includes Dehiwala and Pinnawala. 5 – Includes national parks listed in Table A2.2 (Annex 2), with the exception of Singharaja Forest Reserve. 6 – Includes Colombo National Museum, National History Museum, Kandy National Museum, Ratnapura National Museum, Galle National Museum, Anuradhapura Folk Museum, and the Dutch Museum. 7 - Conferences held at Bandaranaike Memorial International Conference Hall (BMICH). 8 – Includes same proportion of Museum revenue as 2005 since local and foreign division was not available. 9 – Numbers may not add to 100 percent due to rounding. Source: Sri Lanka Tourism Development Authority (2004, 2005, 2006, 2007). 13 Table 2.2 Public sector revenue from tourism (in SL Rs millions) Source of Revenue 2004 2005 2006 2007 % 2007 9 Tourism Embarkation Levy 780.4 674.2 696.0 n/a n/a Tourism Development Levy 300.6 172.5 177.5 214.3 11.3 Tourist Board Income 30.9 39.0 36.7 35.2 1.9 Embarkation Tax on Foreign Tourists 849.3 823.9 839.4 741.1 39.1 Cultural Triangle 551.9 296.0 409.5 288.5 15.2 Local 1 8.8 11.3 8.5 8.7 0.5 Foreign 2 543.1 284.7 401.0 279.8 14.8 Botanical Gardens 3 94.0 56.8 67.4 103.4 5.5 Local 23.3 24.2 23.2 36.8 1.9 Foreign 70.7 32.6 44.2 66.6 3.5 Zoological Gardens 4 183.7 129.4 136.8 204.7 10.8 Local 64.2 68.0 54.2 71.6 3.8 Foreign 119.5 61.4 82.6 133.1 7.0 Wild Life Parks 5 123.6 70.9 191.7 159.9 8.4 Local 9.8 8.2 92.1 17.1 0.9 Foreign 113.8 62.7 99.6 142.8 7.5 Museums 6 1.5 7.6 9.2 4.5 0.2 Local - 3.7 2.7 0.3 0.0 Foreign - 3.9 6.5 4.2 0.2 BMICH 7 70.7 101.4 120.5 142.9 7.5 Total 2,986.6 2,371.7 2,684.7 1,894.5 100.0 Local 106.8 8 115.4 180.7 134.5 7.1 Foreign 2,879.8 8 2,256.3 2,504.0 1,760.0 92.9 1 – Includes Alahana Museum, Jethavana Museum, Abeygiriya Museum, Dambulla (Museum), and Sigiriya. 2 – Includes Anuradhapura, Polonnaruva, Kandy, and Sigiriya. 3 – Includes Peradeniya, Hakgala, and Gampaha. 4 – Includes Dehiwala and Pinnawala. 5 – Includes national parks listed in Table A2.2 (Annex 2), with the exception of Singharaja Forest Reserve. 6 – Includes Colombo National Museum, National History Museum, Kandy National Museum, Ratnapura National Museum, Galle National Museum, Anuradhapura Folk Museum, and the Dutch Museum. 7 - Conferences held at Bandaranaike Memorial International Conference Hall (BMICH). 8 – Includes same proportion of Museum revenue as 2005 since local and foreign division was not available. 9 – Numbers may not add to 100 percent due to rounding. Source: Sri Lanka Tourism Development Authority (2004, 2005, 2006, 2007). 17. The current trends in tourism emphasize the high volume and low value-added, sun-and-sand type of tourism. Although this is a lucrative segment of the market that has been captured, it is reasonable to ask whether there are other areas that could be further promoted to grow the sector. The national park system and cultural areas offer major attractions that appear to be underutilized. Strategic investments could be important in this area. To assess the revenue-generating potential of these assets, a tourism survey was conducted to determine tourists’ willingness to pay for the national park experience. 2.3 The Approach 14 18. A tourist survey was conducted across a sample of nearly 2,000 respondents, who were interviewed in hotels and lodges as well as at the park gates.7 The targeted population included resident and nonresident tourists staying in the hotels and lodges along the southwest coastline of Sri Lanka and near the parks (Bundala, Minneriya, Singharaja Forest Reserve, Uda Walawe, and Yala). The survey was designed to elicit information about the tourist profiles, trip characteristics, satisfaction levels, and the willingness to pay for park-related activities. The interviews were typically conducted following a respondent’s trip into the park to ensure an informed response. Annex 2 contains details of the sampling methodology used and the caveats that apply in generalizing the results. 19. Table 2.3 shows the final distribution of tourists in the sample by location. The largest shares were international tourists who did not visit the parks (“nonpark�) (50 percent), followed by local residents who did not visit the parks (30 percent). Park visitors, taken together, represented just less than 20 percent of the sample. The latter reflects the purposive sampling approach guided by the need to capture a sufficient number of visitors to the parks. Table 2. 3 Distribution of tourists, by type and location Tourist type Number of respondents Percent (%) International nonpark 998 50.0 (Hotels and lodges) Local nonpark 600 30.1 (Hotels and lodges) International park 198 9.9 Bundala National Park 43 Minneriya National Park 37 Singharaja Forest Reserve 42 Uda Walawe National Park 42 Yala National Park 33 Local park 200 10.0 Bundala National Park 40 Minneriya National Park 40 Singharaja Forest Reserve 40 Uda Walawe National Park 40 Yala National Park 40 Total 1,996 Source: World Bank Tourist Survey (2008). 20. Table 2.4 summarizes basic characteristics of the sampled population of tourists. Mirroring national trends, recreation and pleasure travel are the main reasons for visiting Sri Lanka. However, the arrival categories may not be mutually exclusive, and it is likely that the pleasure category includes religious and cultural trips. There would also likely be seasonal variation in other forms of tourism, such as conferences, which the survey was not able to capture. Low numbers in the nonrecreational categories could also reflect the consequences of the civil conflict at the time of the sampling. The bulk 7 The survey identified (1) the socioeconomic characteristics of the different types of tourists who frequent the island, )2) purpose of the visit, (3) duration of stay and number of sites visited, (4) perceptions of park quality, and (5) willingness to pay for visits to the national parks and for improvements in their conservation and management. The final number of completed questionnaires was 1,996. The survey was conducted over several months in the last quarter of 2008 and into January of 2009 (survey appended in Annex 2). 15 of tourists in the sample (about 60 percent) are from Western Europe, followed by Australasia (14 percent) and North America (10 percent). 21. The number of arrivals is one indicator of potential revenue generation. Length of stay is a second.. More than 42 percent of international tourists stay for 4 to 7 nights and more than 51 percent stay 8 to14 nights, with an average visit of 7.2 days. Table 2.4 Number of international tourists by country of residence and purpose of visit, 2007 Private & Convention Visiting Region Official & Friends & Total Pleasure Business Meetings Relations Percent 1 North America 117 100 4 11 2 9.9 Latin America & Caribbean - - - - - - Western Europe 713 668 14 20 11 60.1 Eastern Europe 115 107 2 5 1 9.7 Africa 9 4 - 5 - 0.8 Middle East 3 1 - 2 - 0.3 Asia 59 48 4 7 0 5.0 Australasia 170 162 4 4 0 14.3 Total 1186 1090 28 54 14 100.0 Percent 91.9 2.4 4.6 1.2 1 – Numbers may not add to 100 percent due to rounding. Source: World Bank Tourist Survey (2008). 2.4 The Economic Impacts of Tourism: Spending Patterns 22. The questionnaire elicited information on expenditures for goods and services such as airfare, hotels, transport, food, shopping, and other activities, both inside and outside the country. An important distinction that emerges is in the spending patterns of package tourists and those who visit a park. Packages typically capitalize on volume pricing and other arrangements that make the overall cost of the trip less expensive, so it is no surprise that the package tourists spend significantly less than the nonpackage travelers.8 23. Expenditure patterns differ considerably by tourist type and also whether there has been a visit to a national park (Table 2.5). Those who travel on packages and do not visit a park spend the least. The typical package tourist who does not visit a park stays in Sri Lanka for about 10 days and spends on average a meager $34 per person per day. In contrast, the highest spenders are individual (nonpackage) travelers who visit a park. These stay in the country for slightly longer—about 12 days— and spend on average $73 per person per day. The policy implication of this finding is very clear: promoting individual travel provides a potentially more lucrative strategy for creating high-value niche markets and raising revenue from the sector. Of the surveyed international individuals, more than 76 percent were on packaged tours, 8 percent had some items packaged, and 15 percent purchased items separately (nonpackage). Among the package tourists, 96 percent were purchased outside Sri Lanka in their resident country, indicating the possibility of significant revenue leakages. 8One aspect about packages to note in the Sri Lankan context is that local residents quite often do not travel as part of any package. In fact, none were found during this survey. 16 Table 2.5 Tourist expenditures per person, excluding airfare Per person Average stay Per person per trip ($) (days) per day ($) International park, package 527 12.7 41 International park, nonpackage 796 12.2 73 International nonpark, package 296 10.3 34 International nonpark, nonpackage 448 8.0 90 Local park 75 2.2 35 Local nonpark 48 2.5 19 Source: World Bank Tourist Survey (2008). 24. A breakdown of spending patterns further reinforces this conclusion. Table 2.6 gives the per- person, per-trip average expenditures for each spending category. Each of these goods or services represents a sector in the economy. The nonpackage park tourists again represent the highest spenders in most categories (except transport). Table 2.6 Breakdown of expenditures per person per trip ($) International park International nonpark Category Package Nonpackage Package Nonpackage Hotels 185 484 197 177 Transportation 116 83 33 121 Food and beverages 76 120 38 95 Shopping 59 48 13 30 Other activities 62 61 14 23 Source: World Bank Tourist Survey (2008). 2.5 Economic Impact of Nature Tourism 25. Average expenditures provide the basic information required to calculate the economic impact of nature tourism. The average tourist spends from $296 (package variety) to $796 (nonpackage park visitor) on each trip in Sri Lanka, distributed across each of the sectors in Table 2.6.9 This information is combined with the 2000 input-output table for Sri Lanka to estimate the economy-wide impacts of nature tourism on gross value-added, wages, tax revenues, and imports.10 I-O models make the strong assumption that factor inputs are fixed in proportion, but they have the unique property of being able to trace sectoral inter-linkages in great detail. A full computable general equilibrium analysis that allows for factor substitution is clearly beyond the scope of this report. 26. The methodology employed is to “close� the I-O table to households. As an example, when a tourist spends, say, $484 on hotels and restaurants, this generates a certain amount of wage income 9“Other activities� was mapped to the sector “Tourist Shops and Travel Agents� in the I-O matrix. 10I-O tables are constructed around a matrix of intersectoral flows detailing how much of the intermediate demand for goods and services in a given production sector is met by other sectors in the economy. Information on value-added is broken down into wages, indirect taxes, and operating surplus complete the production accounting system. 17 and net surplus that accrues to households, who then spend this income by consuming goods and services. In addition, when the hotel and restaurant sector produces $484 worth of output, it must purchase inputs of food, beverages, water, electricity, communications, manufactures, and so on. These inputs to the sector are either imported or produced by other sectors in the Sri Lankan economy. When all transactions are added up it is possible to arrive at a total measure of the direct plus indirect production, value added, wages, tax revenues, and imports required to meet this demand. Impact on the economy 27. Table 2.8 displays the economic impact of each type of nature tourism spending in Sri Lanka. Consider first the high-spending international park tourist, with no package spending. With the average spending pattern of this type of tourist, $796 in overall spending generates a total of $909 worth of GDP (value-added) in the economy. The tourism multiplier in this case is 1.77: that is; $1.00 spent by the tourist generates an additional $1.77 in revenue for the economy. The benefits accrue in the form of an additional $387 in wages and $487 in operating surplus to businesses, $41 in tax revenue, and $153 worth of imported goods and services. Overall multiplier effects for each tourist type are summarized in Table 2.7. Table 2.7 Direct and indirect economic impact of nature-based tourists in 20071 Contribution to GDP Direct Total (direct + indirect) Multiplier impact impact International visitors to parks Package 452 765 1.69 Non-package 513 909 1.77 International visitors not visiting parks Package 180 319 1.78 Non-package 394 665 1.69 1 – Simulated using the expenditure by one tourist. Source: Author’s calculation. 28. The total number of international tourists who indicated they were in Sri Lanka for “pleasure� was more than 331,000 (Annex 2: Table A2.1), and more than 58,000 visitors were recorded at the park gates in 2007 (Table 2.1). The difference, 273,000, represents potential park visitors. If the 273,000 tourists were to visits parks and more generally follow this spending pattern (an average amount of $796), it would translate to more than $248 million, or 0.77 percent of GDP, to the Sri Lankan economy (Table 2.8). 29. This estimate is an annual figure. Were these revenue flows sustained for 10 years (using a 5 percent discount rate) the revenue streams would amount to a net present value (NPV) of $2.2 billion in a decade and $3.3 billion in 20 years. These figures are, of course, indicative of only an extreme hypothetical scenario that is unlikely to occur. But they do illustrate that even more modest measures that increase tourism spending could yield tremendous gains. This could be achieved either by measures that increase the time spent in the country or by improving the quality of (and hence willingness to pay for) the experience. 18 Table 2.8 Economic impacts of nature-based tourism spending in 2007 273,000 Tourist type One tourist nature tourists Percent ($) ($ millions) of GDP International park, package Local Intermediate Inputs 628 172 0.53 Imports 126 35 0.11 Value added (total) 768 210 0.65 Wages 294 80 0.25 Taxes on production 43 12 0.04 Operating surplus 435 119 0.37 Total impact on GDP (annual) 1 765 209 0.65 NPV (10 years) 6,671 1,821 NPV (15 years) 8,703 2,376 NPV (20 years) 10,296 2,811 International park, nonpackage Local Intermediate Inputs 954 260 0.81 Imports 153 42 0.13 Value added (total) 911 249 0.77 Wages 387 106 0.33 Taxes on production 41 11 0.03 Operating surplus 487 133 0.41 Total impact on GDP (annual) 1 909 248 0.77 NPV (10 years) 7,930 2,165 NPV (15 years) 10,347 2,825 NPV (20 years) 12,241 3,342 International nonpark, package Local Intermediate Inputs 361 98 0.30 Imports 56 15 0.05 Value added (total) 320 87 0.27 Wages 142 39 0.12 Taxes on production 12 3 0.01 Operating surplus 167 46 0.14 Total impact on GDP (annual) 1 319 87 0.27 NPV (10 years) 2,784 760 NPV (15 years) 3,633 992 NPV (20 years) 4,297 1,173 International nonpark, nonpackage Local Intermediate Inputs 562 154 0.47 Imports 117 32 0.10 Value added (total) 668 182 0.56 Wages 248 68 0.21 Taxes on production 32 9 0.03 Operating surplus 391 107 0.33 Total impact on GDP (annual) 1 665 182 0.56 19 273,000 Tourist type One tourist nature tourists Percent ($) ($ millions) of GDP NPV (10 years) 5,800 1,583 NPV (15 years) 7,567 2,066 NPV (20 years) 8,952 2,444 1 – The total annual impact is not the sum of value-added, indirect taxes, corporate taxes, wages and imports. It is the total impact on GDP. The separate line items are shown since they are major components of GDP and of interest to policymakers. Source: Author’s calculation. 2.6 Increasing the Economic Impact of Nature Tourism 30. One simple way to increase tourism revenue would be to increase the average length of stay. The average number of days tourists spend in Sri Lanka is around 8 to 13 days for international tourists, depending on whether they were traveling on a package or not (Table 2.5). To gain a sense of the magnitudes involved, a simple example can illustrate the potential earning capacity. If a low-spending international package tourist that did not visit a park spent an extra day in the country then (multiplying the expenditure figure by the potential 273,000 nature tourists) this would result in a potential annual increase of $9.3 million per day. The corresponding figure for the higher spending international nonpackage tourists who did visit a park is $19.9 million per day. Hypothetically if one were to extend the typical park trip by two days, this would of course double the contribution to nearly $40 million. With a tourism multiplier of 1.77, the overall impact could be as large as 0.22 percent of GDP or $70 million annually, with just this simple intervention. Over the span of 10 years this would represent a net present value of more than $614 million at a 5 percent discount rate. 31. Increasing a nature tourist’s duration of stay could be accomplished through better marketing of the national parks. Currently the vast majority of tourists do not visit the parks. Among the international tourists who did not go to a park and were on a package, only 48 percent said that park options were available. There appears to be a strong latent desire among these to visit the national parks. In the survey, nonpark tourists were asked if they were willing to pay to visit a park with the concomitant increase on transport and accommodation costs. The results were highly favorable, with 90 percent indicating that they would be willing to add a park visit to the trip. Needless to say, it is unlikely that all tourists who currently visit would extend their stay by one or two days, but the exercise is useful in indicating the likely contribution that such an intervention could make to the economy. Quality of the tourist experience 32. The absolute number of arrivals and the length of stay determine the quantity of tourism, but another important aspect is the quality of the experience. If the visitor is dissatisfied, repeat visits are unlikely. More importantly, with more than 12 percent of the sample arriving on the recommendation of friends, relatives, or evaluative books, there is an important reputational risk to the quality of the experience that the industry should be aware of. Although the Sri Lankan national park network is abundant with charismatic faunal species such as the elephant, leopard and sloth bear, the visitor experience needs significant improvement. 33. Table 2.9 presents the overall visitor satisfaction for the five sites in the sample. Uda Walawe is the lowest in terms of overall satisfaction, with only 58 percent of respondents describing their 20 experience as being “quite good� or “very good.� The highest was the Singharaja Forest Reserve with more than 90 percent of visitors rating it as “quite good� or “very good.� However, these broad averages conceal considerable variation in attitudes and satisfaction with service quality. Closer scrutiny unearthed a consistent pattern of visitor experiences. Table 2.9 Overall site satisfaction by park tourists, percent Site Quite good Very good Bundala National Park 30 41 Minneriya National Park 63 21 Singharaja Forest Reserve 62 28 Uda Walawe National Park 53 5 Yala National Park 20 46 Source: World Bank Tourist Survey (2008). 34. Figure 2.4 shows the perceptions across a wide variety of site attributes for each of the parks. There is remarkable consistency in the results. There is uniformly high satisfaction with the wildlife experience—the primary attraction to a nature reserve. But regrettably, this is where the positive perceptions end. There is concern and dissatisfaction with traffic congestion in the parks, suggesting that limits may have been reached. There is also dissatisfaction with organized excursions, accommodation, activities for children, availability of restaurants, diversity of activities, and shopping opportunities. In short, the lack of visitor services are a common problem, though there is appreciation of infrastructure facilities (for example, toilets) when these are available in some of the parks. Minneriya and Singharaja fair the worst on average, in most categories. When respondents were asked to assess their overall experience, individual attribute trends diminish greatly, especially for Minneriya and Singharaja, as the wildlife and nature attributes dominate perceptions of satisfaction (see “Overall experience,� the last graph in Figure 2.4). 21 Figure 2.4 Perceptions of park attributes Wildlife Congestion Yala Yala Uda Walaw e Very bad Uda Walaw e Very bad Not so bad Not so bad Singharaja Singharaja Neutral Neutral Minneriya Quite good Minneriya Quite good Very good Very good Bundala Bundala 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% Site and restroom cleanliness Visitor centre/ site info. Yala Yala Uda Walaw e Very bad Uda Walaw e Very bad Not so bad Not so bad Singharaja Singharaja Neutral Neutral Minneriya Quite good Minneriya Quite good Very good Very good Bundala Bundala 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% Know ledge of guide/ interpreter Organised excursions Yala Yala Uda Walaw e Very bad Uda Walaw e Very bad Not so bad Not so bad Singharaja Singharaja Neutral Neutral Minneriya Quite good Minneriya Quite good Very good Very good Bundala Bundala 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% Accom m odation Availability of food/ drinks (restaurants) Yala Yala Uda Walaw e Very bad Uda Walaw e Very bad Not so bad Not so bad Singharaja Singharaja Neutral Neutral Minneriya Quite good Minneriya Quite good Very good Very good Bundala Bundala 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% 22 Figure 2.4 Perceptions of park attributes (continued) Facilities for children Diversity of activities Yala Yala Uda Walaw e Very bad Uda Walaw e Very bad Not so bad Not so bad Singharaja Singharaja Neutral Neutral Minneriya Quite good Minneriya Quite good Very good Very good Bundala Bundala 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% Friendliness of staff Shopping opportunities Yala Yala Uda Walaw e Uda Walaw e Very bad Very bad Not so bad Not so bad Singharaja Singharaja Neutral Neutral Quite good Minneriya Quite good Minneriya Very good Very good Bundala Bundala 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% Value for m oney Transport experience to/ from park Yala Yala Uda Walaw e Very bad Uda Walaw e Very bad Not so bad Not so bad Singharaja Singharaja Neutral Neutral Minneriya Quite good Minneriya Quite good Very good Very good Bundala Bundala 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% Overall experience Yala Uda Walaw e Very bad Not so bad Singharaja Neutral Minneriya Quite good Very good Bundala 0% 20% 40% 60% 80% 100% 23 35. The impressions that tourists leave the country with can be highly influential in future vacation decisions. Although the impressive statistics above reveal a good overall trip experience, this does not necessarily imply that tourists would return in the future, since there may be other more attractive international destinations. To get an indication of a repeat visit, tourists were also asked whether they would visit Sri Lankan natural sites again in the future. As Figure 2.5 shows, over 95 percent who visited these parks would return. Figure 2.5 Percentage of park visitors who would return to Sri Lanka Yes No Don't know 3.3 95.5 1.3 Source: World Bank Tourist Survey (2008). 2.7 Opportunities for Financing National Parks and Forest Reserves 36. The tourist survey was also used to elicit the willingness to pay park entrance fees as another possible means of raising additional revenue (see Box 2.1) for conservation. A high willingness to pay would indicate high levels of consumer satisfaction and provide scope to raise entrance fees. Conversely a low willingness to pay would suggest the need for investments to improve the park experience. Nature tourists were asked a series of questions on their willingness to pay (1) to enjoy the national parks as they currently stand and (2) for specific improvements in the each of the parks. 24 Box 2.1 Willingness to pay Willingness-to-pay (WTP) studies are not as straightforward as they may seem, since they are essentially creating a hypothetical market for an environmental good, which may have some arbitrary price already associated with it (e.g. entrance fee). Since the good in question is likely to possess some nonmarket services, the description of the quantity and quality must be carefully thought out and presented to the respondent. Due to the hypothetical nature of WTP studies, there are certain sets of “rules� or guidelines that should be followed in order to elicit a reliable and consistent willingness to pay—and avoid a plethora of possible biases that could distort the value given by the tourist. The WTP section of the tourist survey used five out of six guidelines from the "Report on the NOAA Panel on Contingent Valuation" (Arrow et al 1993, Randall 1997). The survey used personal interviews, probability sampling, careful pretesting, and reminders of budget constraints and the availability of substitutes. A common criticism of contingent valuation (CV) analysis is that CV estimates are gross overestimates. Studies show that, under plausible conditions, when asked to value quasi-public goods where the effective trade-off is a quality change against a cost change, and public goods are to be provided by means of an increased tax, it is in the strategic interest of the respondents to truthfully reveal their WTP (Carson et al 1999). The survey in this study used a menu of multiple choices presented to the respondent in the form of a payment card. However, this question format is likely to bias WTP responses downward for three reasons (Carson 1997): (1) the optimal strategy for respondents whose WTP is less than the expected cost is to state a WTP of $0; (2) open-ended and payment card questions indicate uncertainty about future costs for the respondent and result in a lower WTP response; and (3) if the respondent believes that the government is capable of capturing part of any available surplus for unproductive purposes, the WTP reported would be lower. Thus, WTP reported in the survey may be lower than the actual WTP of the respondents and should be considered a lower bound. The survey took these principles into account along with other important considerations such as the following: (1) tourists were interviewed after they had enjoyed their trip to a national park, making the questions seem less hypothetical; 2) the scenarios used to elicit willingness to pay were described in precise terms, rooted in the experience the respondent has just had; and (3) the means of eliciting willingness to pay was through a payment card, giving the respondent a menu of potential amounts to pay for the experience just enjoyed (or enhancements to the experience). The questions were asked in terms of a maximum willingness to pay once reminded of the current entrance fee to the park. Willingness to pay by international visitors for national parks (or forest reserves) 37. Figures 2.6 to 2.9 summarize the results from the WTP survey, for each tourist type and development scenario. On average, the international tourists indicate that the entrance fee of $14 is close to what they are willing to pay for the current experience (with Minneriya and Singharaja being worth a little less, perhaps, because of some dissatisfaction with some specific site attributes as shown in Figure 2.4). The fiscal implication is also clear. In the absence of improvements in infrastructure and quality of interpretation services there is perhaps little scope to raise park entrance fees without substantially sacrificing visitor numbers. 38. If improvements are made to the parks, as suggested in the hypothetical scenarios (see Box 2.2), willingness to pay increases by about 28 percent or more per trip. In the case of international nonpark tourists, the differential between the current entrance fee and what they would be willing to pay to visit a park is even more striking. On average, international nonpark tourists were willing to pay about $18 for the current situation and up to $23 or 64 percent more for the improved conditions (Figure 2.7). Figure 2.6 International park tourists’ willingness to pay park entrance fees 25 International park tourist 25.00 20.00 18.9 18.5 17.5 18.0 17.0 14.6 14.6 14.7 15.00 14 14 14 14 14 13.4 13.5 10.00 5.00 0.00 Bundala NP Minneriya NP Singharaja FR Uda Walawe NP Yala NP Current No improvement With improvement Source: World Bank Tourist Survey (2008). Figure 2.7 International nonpark tourists’ willingness to pay park entrance fees International non-park tourist 25.00 23.7 23.6 22.8 22.9 22.0 20.00 18.6 18.6 18.3 18.3 17.6 15.00 14 14 14 14 14 10.00 5.00 0.00 Bundala NP Minneriya NP Singharaja FR Uda Walawe NP Yala NP Current No improvement With improvement 26 Box 2.2 Development scenarios for the parks/reserves Bundala National Park  Upgrade of the camping facilities inside the park  Provision of bungalows inside the park  Improvement of the quality and experience of visitation with better interpretation services provided by the Department of Wildlife Guides  Development of Wilmanna Sanctuary across the road to provide opportunities for viewing large herds of elephants  Provision of night safaris, and viewing platforms during moonlit nights near watering holes Minneriya National Park  Provision of camping facilities and bungalows inside the park  Limiting of traffic and the number of vehicles entering the park to reduce congestion  Improvement of the quality and experience of visitation with better interpretation services provided by the Department of Wildlife Guides  Provision of elephant safari’s inside the park  Provision of boating facilities in Minneriya Tank for elephant viewing  Provision of opportunities for night safaris, and viewing platforms during moonlit nights near watering holes Singharaja Forest Reserve  Provisions of visitor centers with exhibits, clean restrooms, restaurants, camping facilities inside the reserve, and bungalows in the buffer zones of the reserve  Provision of new visitor services such as elephant safaris and nature trails  Improvement in the quality and experience of visitation with better interpretation services provided by the Forest Department Guides Uda Walawe National Park  Upgrade of the camping facilities and better maintained bungalows inside the park  Limiting of traffic and the number of vehicles entering the park to reduce congestion  Improvement in the quality and experience of visitation with better interpretation services provided by the Department of Wildlife Guides  Provision of opportunities for night safaris, and viewing platforms during moonlit nights near watering holes Yala National Park  Provisions of visitor centers with exhibits, clean restrooms, restaurants, camping facilities, and better maintained bungalows inside the park  Provision of new visitor services such as elephant safaris, nature trails, visiting cultural sites/ruins, night safaris, and viewing platforms during moonlit nights near watering holes  Limiting of traffic and the number of vehicles entering the park to reduce congestion  Improvement in the quality and experience of visitation with better interpretation services provided by the Department of Wildlife Guides Source: World Bank Tourist Survey (2008). Willingness to pay by local visitors for National Parks (or Forest Reserves) 39. The willingness to pay by locals is similar, though the magnitudes differ. Comparing park and nonpark tourists in Figures 2.8 and 2.9, on average, local park tourists are willing to pay the current fee for the prevailing situation, just above $0.80 (or about SL Rs 93). However, the local park visitors have a higher willingness to pay for the improved development scenarios, especially in the case of Minneriya and Uda Walawe National Parks. Bundala National Park, a Ramsar Wetland site that is best known for 27 its bird life, is valued approximately the same by local park and nonpark visitors since Sri Lankans are not very keen birders. This is also reflected in the ratio of local to international visitors for the park (Table A2.2, Annex 2). Figure 2.8 Local park tourists’ willingness to pay park entrance fees Local park tourist 1.80 1.68 1.60 1.55 1.36 1.39 1.40 1.33 1.20 1.01 1.00 0.86 0.82 0.82 0.78 0.80 0.60 0.40 0.34 0.34 0.34 0.34 0.34 0.20 0.00 Bundala NP Minneriya NP Singharaja FR Uda Walawe NP Yala NP Current No improvement With improvement Source: World Bank Tourist Survey (2008). Figure 2.9 Local nonpark tourists’ willingness to pay park entrance fees Local non-park tourist 1.80 1.60 1.40 1.30 1.25 1.23 1.16 1.16 1.20 1.00 0.85 0.84 0.83 0.82 0.81 0.80 0.60 0.40 0.34 0.34 0.34 0.34 0.34 0.20 0.00 Bundala NP Minneriya NP Singharaja FR Uda Walawe NP Yala NP Current No improvement With improvement Source: World Bank Tourist Survey (2008). 28 Current revenue from park tourists 40. Consolidating the willingness to pay estimates and combining them with information on actual park visitation, Table 2.10 shows what these entrance fees would represent in terms of potential revenue generation.11 41. Summing across the five surveyed parks, revenues from international park tourists could raise an additional $19,000 per year, reflecting the current WTP value of the experience ($690,000 minus $671,000). If improvements were made to the parks according to the development scenarios, international tourists value these changes as an additional $198,000 (30 percent more) in potential entrance fee increases above the current fee structure ($869,000 minus $671,000). 42. Local visitors’ fee increases appear to be highly significant in the short run (assuming no impact on demand). Currently, local park tourists would be willing to pay an additional $92,000 ($152,000 minus $60,000) for the current experience in the parks and upward of $194,000 ($254,000 minus $60,000) more than they currently do for improvements to the parks. Potential revenue from nonpark tourists 43. These findings are for a subset of five sites and only for those who are currently visitors to the parks. Including the other sites listed in Table A2.2 (Annex 2) and imposing a similar park fee revenue increase of 30 percent would translate to more than $369,000 in additional park revenue per year (see bottom of Table 2.10).12 A more proactive park tourism initiative may also encourage current nonpark tourists to take a park trip. In this case, if the broader market were to be tapped, 273,000 tourists would represent $3,822,000 immediately at the current entrance fee price of $14 and potentially $6,279,000 with an $23 fee, if there were park improvements (see Figure 2.7). Again, these are annual figures and would represent more than $55 million in 10 years (at a 5 percent discount rate). 11 The magnitude of these fees is relevant in either the international or local case. In terms of total trip expenditures, entrance fees represent only around 2 percent, and even less if airfares are included. If so small, then what would be the demand response to a fee increase—fewer trips? Most studies of tourism demand in developing countries have found a price response (elasticity) of demand less than one, which means that for every 1 percent increase in the fee, demand for visitation decreases by less than 1 percent. In this study, since fees really represent only a small proportion of overall expenses, we assume an elasticity of near zero. 12 Calculated as total foreign revenue generated in 2007, converted to US$ (divided by 116), and then multiplied by 30 percent. 29 Table 2.10 Current and potential fees from visitors to National Parks/ Forest Reserves13 Revenue Local Intl. Number of Number of from Revenue from National Park/ Current v. fees fees local intl. locals Foreigners Forest Reserve WTP (US$) (US$) tourists tourists (US$) (US$) Bundala NP Current fee 0.34 14.00 6,214 4,319 2,143 60,466 No improvement 0.82 14.63 5,082 63,178 With improvement 1.36 18.93 8,477 81,766 Minneriya NP Current fee 0.34 14.00 22,334 6,005 7,701 84,070 No improvement 1.01 13.43 22,501 80,650 With improvement 1.68 17.55 37,541 105,387 Singharaja FR Current fee 0.34 14.00 27,364 4,829 9,436 67,606 No improvement 0.82 13.46 22,408 65,015 With improvement 1.39 17.01 38,006 82,157 Uda Walawe NP Current fee 0.34 14.00 55,362 12,896 19,090 180,544 No improvement 0.86 14.60 47,424 188,298 With improvement 1.55 17.95 85,779 231,527 Yala NP Current fee 0.34 14.00 64,020 19,914 22,076 278,796 No improvement 0.86 14.73 54,840 293,252 With improvement 1.33 18.50 84,897 368,491 Total Current fee 175,294 47,963 60,446 671,482 No improvement 152,255 690,393 With improvement 254,700 869,328 Other parks 1 369,000 Non-park tourists Current fee 14.00 273,000 3,822,000 With improvement 23.00 273,000 6,279,000 Sources: Sri Lanka Tourism Development Authority (2004, 2005, 2006, 2007); World Bank Tourist Survey (2008). 1 – Parks include those other than the 5 surveyed above (Table A2.2, Annex 2) 2.8 Revenue Leakages 44. A common concern within tourism is the amount of tourist expenditures actually staying within the country’s border and not in the hands of companies abroad. These so-called leakages can be important when attempting to measure the true impact of tourism on the local economy, and are potentially a problem when a significant proportion of these expenditures are incurred before entering the country. 45. As mentioned already, among the surveyed international individuals, more than 76 percent were on packaged tours, and of these, 96 percent were purchased outside Sri Lanka, in the resident country of the tourists. While this provides some compelling evidence of possible leakages, it is difficult to tell whether all of this revenue is actually retained outside the country or not. Some suggest that leakages in the sector may be as high as 50-70 percent – mostly from the sun-and-sand package tourism along the coast. Without specific information on the business arrangements between tour operators and countries, it remains open to debate what the exact figures may be. However, even if the implied leakage rate were upward to 73 percent (76 percent x 96 percent) this would not imply that Sri Lanka should not be in the tourism business. On the contrary, what this implies is that if Sri Lanka were to 13Note that in Table 2.9 we include only those who visited the parks. We discuss the implications of including nonpark tourists below. 30 make the necessary investments and develop multisite packages—for example, including sites in the Cultural Triangle and national parks—this could raise the rent capture by local operators. 2.9 Conclusions 46. In 2007, nearly 70 percent of all tourist arrivals stated “pleasure� as their purpose of visit to Sri Lanka according to the Tourism Development Authority, and more than 90 percent were found to be holiday tourists in a recent tourist demand survey in 2008. Tourism’s contribution to the economy 47. Average trip expenditures depend on whether the tourist is local or international, whether he or she had visited a park, and whether the tourist is traveling as part of a package tour. The average international park tourist, not on a package, is the highest-spending individual with an expenditure of more than $796 on a 12-day stay, not including airfare. More than 60 percent of this expenditure was on hotels and accommodation, 10 percent on transport, 15 percent on food and beverages, and 14 percent on shopping and other activities. The tourism multiplier was found to be approximately 1.77, implying that when the average international park tourist spends $796 in Sri Lanka, $909 of value- added is generated: $387 in wages, $487 in operating surplus to businesses, 41 in tax revenue (indirect and corporate taxes), and $153 in imports. The economic impact of 273,000 nature tourists each spending an average amount of $796 would translate to more than $248 million, or 0.77 percent of GDP, to the Sri Lankan economy annually. Over the course of 10 to 20 years this would represent between $2.2 and $3.3 billion, respectively. If even a portion of these funds were re-invested in the protected area network, Sri Lanka’s conservation of its natural assets will be sustainable, ensuring long term nature tourism potential. Increasing contributions through greater trip duration 48. The average length of stay by international tourists is 8 to 13 days, depending on whether or not they were on a package deal. If this stay were extended by a typical two-day trip to one of the parks, the additional revenue generated would be nearly $70 million or 0.22 percent of GDP once direct and indirect tourism effects are taken into account. Over 10 years, this would represent a net present value of more than $614 million, using a 5 percent discount rate. Financing parks through entrance fees 49. International nature tourists stated a willingness to pay 30 percent more than the current entrance fee for each of the national parks and Singharaja Forest Reserve in their current condition and up to 60 percent with improvements. Local tourists, who currently pay only a nominal fee, were willing to pay three and four times the current entrance fee for current and improved park conditions, respectively. In terms of revenue, these five sites generated more than $670,000 from international tourists who would be willing to pay an additional $198,000 for modest improvements. If nonpark tourists were to include a park trip to their stay, annual entrance fee revenue would be more than $6 million, or $55 million to $85 million in 10 to 20 years, simply from the imposition of a 30 percent increase in entrance fees in the five surveyed areas: Bundala, Minneriya, Uda Walawe, and Yala National Parks and the Singharaja Forest Reserve. 50. In short, there exists scope to increase tourism revenues from the national parks, but it will call for improvements in structure and service to capitalize on this potential. The Government of Sri Lanka 31 has already made a serious commitment to develop nature tourism in Sri Lanka and has been channeling at least 50% of the revenue into a dedicated fund for improving services and facilities in protected areas. Yet due to low visitation the protected area network is not able to yield the revenue potential as estimated above unless better services are provided. Improving visitor services in the protected areas should be given high priority by the Government so as to realize the potential for increase in tourism revenue, which in turn will advance the conservation goals of the country. For long term sustainability of nature tourism, Sri Lanka has to ensure much better management of the protected area network and conservation of its charismatic and flagship species such as the Asian elephant—a main attraction of visitors to national parks. 32 Chapter 3 The Impediment to Elephant Conservation around Yala National Park—The Human-Elephant Conflict 3.1 Introduction: Tourism and Conservation 51. Captivating and charismatic wild elephants are the flagship attraction of Sri Lanka’s national parks and are the backbone of its nascent ecotourism industry. Despite limited facilities and the country’s prolonged civil conflict, the national parks continue to draw the highest value international tourists to otherwise remote areas of the country, largely to see elephants because Sri Lanka provides the best opportunity of viewing wild Asian elephants in the world. The scope to capitalize on this natural tourist asset is enormous and current utilization is well below its full economic potential. At the same time there are daunting challenges to long term elephant conservation that need to be confronted if the full economic potential of this natural asset is to be realized. 52. Protected areas and national parks—the fortress of wildlife conservation efforts—are typically of insufficient size and inadequate quality to sustain the country’s elephant population. Not only do elephants have large home ranges, but they must be allowed to disperse among reserves to ensure genetic diversity. A further difficulty is that elephants are an edge species that prefer the concentrated growth of vegetation typically found in degraded and secondary forest habitats. Consequently, more than two-thirds of the wild elephant population can be found outside the protected area system.14 Estimates of the number of elephants in Sri Lanka vary from about 3,000 to 5,000. This imprecision is inevitable due to the extreme challenges of enumeration in dense vegetation. The forest range available for elephants is thought to cover approximately 15,000 km2 (Sukumar, 2006) implying a range of about 3 to 5 km2 for each elephant. To meet its nutritional needs an elephant must consume about 150kg of foliage each day (Sukumar 2006). For the forests to sustain a herd the size of Sri Lanka’s, the daily growth in forest biomass would need to equal the consumption needs of each wild elephant—an unlikely prospect.15 As a result, wild elephants are compelled to graze on agricultural lands to survive, resulting in a vicious spiral of conflict with agriculturalists. The problem is made worse by the rapid and escalating fragmentation of habitats. The proximate causes—unplanned development, a growing infrastructure footprint, gaps in legislation, poor law enforcement, and weak implementation of protected area management plans—are not unfamiliar. This has resulted in the human-elephant conflict which claims around 50-60 humans and 200 elephants annually and is the most serious threat to long term elephant conservation. 53. Long term elephant conservation is futile without addressing the main impediment to conservation. In an attempt to address the human-elephant conflict (HEC), over the last 50 years, there is an emphasis on moving and confining large herds to national parks managed by the Department of Wildlife Conservation (DWC). The two main methods of removing elephants from outside DWC’s protected areas have been “elephant drives� that remove elephant herds and capturing and transporting individual males to protected areas. The long-term risks and limitations of this approach are self-evident. Over-grazing and degradation of habitats would inevitably lead to a decline in the carrying capacity of reserves and an ultimate drop in elephant numbers. To ensure their long-term survival there is a need to provide habitat connectivity combined with incentives to turn wild elephants from economic liabilities and the foes of local farmers to wild, living assets. 14Center for Conservation and Research for the Department of Wildlife Conservation, 2007. 15The simple arithmetic indicates that each square kilometer of forest would need to “grow� 30–50 kg of biomass each day. 33 54. In short, the central problem of elephant conservation is also the overarching economic problem of creating incentives and regulations that maintain habitat size, forest productivity, and the full assemblage of ecological services generated by forests. The good news is that there still remain tracts of land capable of sustaining wild elephants as well as generating revenues through tourism such as elephant viewing. Although there is a perception that economic losses due to elephant depredation is very high, the actual losses from HEC are small even relative to farmers’ meager incomes, suggesting that economic solutions could be available to address the problem. The decline in elephant numbers and rising HEC are not just indicators of decaying environmental services; they also reflect lost economic benefits to society and in particular those rural communities that depend on natural capital for a large proportion of their income. 55. This chapter addresses these issues in detail. It investigates the extent of HEC in an area around Yala National Park, with a particular focus on the role of shifting cultivation, termed chena. It examines the nature of HEC and the effectiveness of different mitigation measures and explores the extent to which tourism benefits could flow to local residents who endure the costs of living with wild elephants but receive few of the economic benefits. 3.2 The Approach 56. What is the extent of damage inflicted by elephants? How do affected households respond? How effective are current damage-mitigation strategies? To answer these fundamental questions a livelihoods survey was conducted in 2008 among 800 households in the vicinity of Yala National Park. Box 3.1 provides details of the survey design. The purpose of the survey was to take stock of the economic activities that households participate in, explore the consequences of the human-elephant interactions, and suggest strategies to address conservation challenges in ways that could bring greater income and employment to affected communities. Ecotourism, and sustainable tourism in general, could become a vehicle that creates some of these potential win-win scenarios to reinvigorate local communities while preserving the environment. 34 Box 3.1 Survey Design The livelihoods survey elicited responses from 800 households in 11 GN (Grama Niladhari) Divisions located next to Yala National Park (see Table 3.1 and Map 3.1). The sample was stratified among two groups of households in the Hambantota District. Households in the first layer were those adjoining the YNP boundary and the second group were located next to the first but with a significant number of families engaged in chena cultivation. The focus on chena farmers was determined largely by their close interaction with elephants—the flagship species of YNP. Sixty percent of the sample was allocated to the group adjacent to YNP and 40 percent to those in the second group with significant chena cultivation. A total of four focus group discussions were also held with each of the communities to gauge their opinions on elephant encounters and also how tourism might play a role in their future livelihoods. Transcripts of these discussions are also provided in Annex 3. Table 3.11 Details of sample allocation and coverage Number of Group GN Divisions (code) Households Adjoining Andaragasyaya (21) 90 YNP Kirinda (19) 100 Viharamahadevipura (18) 80 Rana Keliya (13) 50 Udaha Gandara (14) 70 Kawantissapura (42) 90 Sub-sample total 480 Significant Magama (20) 50 Chena Yodakandiya (15) 60 Mahasenpura (11) 70 Weerahela (44) 70 Julpallama (43) 70 Sub-sample total 320 Sample total 800 Source: World Bank Livelihoods Survey (2008). 35 Map 3.1 Map of the livelihoods survey area 36 3.3 The Anatomy of Households and Livelihood Activities 57. Shifting cultivation, or chena, a practice dating back centuries, remains an important part of village life throughout Sri Lanka’s Dry Zone. Individual families have customary rights to chena lands that include both the currently cultivated land and all fallow lands that have been cleared and are recovering after one to two years of cultivation. These patterns of cultivation have been sustained by social norms and customs that dictate recognition of pre-existing family rights. However, chena farmers have no formal tenure rights to land (see Figures 3.1 and 3.2). In most villages, the male family members spend much of the growing season in the chena lands, away from the village, due to problems of wild animal crop depredation. Elephants are perceived as particularly menacing by the chena farmers (see Box 3.2). Chena is also a practice that occurs in undisturbed areas—such as Forest Department land buffering national parks. Table 3.2 distinguishes between two geographical areas—chena lands that are adjoining Yala National Park (normally Forest Department lands) and those that are not. 58. Chena land is cultivated with limited agricultural technology and virtually no inputs. As a result, yields mirror the natural fertility of the soil. Cultivation is dominated by vegetables, nonrice grains (grams, lentils, and maize), and some fruits. Chena is also a seasonal activity, with only around 5 percent of households using the land residentially (Figure 3.3). Chena crops are mostly organic and rain-fed, and so must follow seasonal variations in precipitation. Most of the cultivation occurs during Maha (October-January), and in the fallow season the forests gradually return to the chena farms, creating ideal elephant habitat which in turn restores soil fertility (Figure 3.4).16 It is no coincidence that chena cultivation is more prevalent among households adjoining Yala National Park (YNP), where larger plots of forest land are available and the proximity to the protected area assures more rapid rejuvenation of soils (Table 3.2). In terms of land rotation, almost all lands are cultivated on a permanent basis with less than 5 percent in rotation (i.e., other than in the Yala— dry—season).17 16 This occurs through both elephant dung deposits and the natural recovery of nutrients through the fallow period. 17 In Sri Lanka, there are two main cultivation seasons—the Maha season (October-January), or the period with excessive rainfall, and the Yala season (April-August), the drier season. In Yala, farmers have a greater reliance on irrigation. 37 Figure 3.10 Tenure rights on land where chena occurs in areas adjoining YNP 1.5 1.0 No Chena lands 1.7 0.4 0.2 Encroached, ow ned by other state agency 8.5 Encroached, ow ned by FD Legally ow ned 9.0 Encroached, ow ned by DWLC Leased in Other 60.4 Taken on Ande 17.3 Shared ow nership Source: World Bank Livelihoods Survey (2008). Figure 3.11 Tenure rights on other land where chena occurs 2.5 1.3 No Chena lands 0.3 2.5 0.0 Encroached, ow ned by other state agency 4.4 Legally ow ned 6.6 Encroached, ow ned by FD Leased in 7.5 Encroached, ow ned by DWLC Other Shared ow nership Taken on Ande 75.0 Source: World Bank Livelihoods Survey (2008). Figure 3.12 Chena land use Adjoining YNP Not Adjoining YNP Seasonal crops Seasonal crops 8.2 5.7 Residence Perm anent crops 6.8 No use 5.7 Perm anent crops 4.8 Residence 5.7 No use 1.9 Other 1.1 Livestock rearing 80.5 1.1 77.8 0.5 Livestock rearing Other Source: World Bank Livelihoods Survey (2008). 38 Table 3.12 Characteristics of chena cultivation Chena cultivation Adjoining YNP Not adjoining Number of households with chena lands 185 82 Average chena land area (acres) 0.71 0.43 Average chena land extent cultivated (acres) 0.64 0.32 Average years chena farming 6.11 4.20 Percent of all land that remains in fallow 3.96 4.06 Total number of households 480 320 Source: World Bank Livelihoods Survey (2008). Figure 3.13 Percentage of farmers engaged in seasonal chena cultivation 100 90 80 70 60 Percent Adjoining YNP 50 Not adjoining 40 30 20 10 0 Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Month Source: World Bank Livelihoods Survey (2008). 39 Box 4.2 Chena cultivation and optimal habitats for elephants Chena, or slash-and-burn agriculture, is generally considered a practice detrimental to the environment and a cause of habitat degradation. However, studies in Sri Lanka have demonstrated that traditional chena agriculture actually creates optimal habitat for elephants. Slash-and-burn is a system of agriculture that is widespread throughout the world and usually is “shifting� in nature. A farmer will typically cut and clear an area of forest and set fire to it just before the onset of the rainy season. Grounds are then cultivated with crops of cereals and vegetables with the harvest completed soon after the rainy season. The remainder of the year, through the dry season, the land is left fallow. Again at the beginning of the wet season, it is cleared of the vegetation that has sprung up and cultivated. After about five years of this cultivation, the land becomes unproductive and a new patch is cleared. This is the reason why chena cultivation is “shifting� in nature. During the period that the chenas are cultivated, left over vegetation from the harvest provides a good source of food for elephants, which flock in great numbers to consume it as soon as the people leave. Then through the dry season, hardy natural plants keep growing in the chena fields, providing fodder for elephants. Therefore, even during the period chenas are cultivated, such areas provide dry season food for elephants. Once the chenas are abandoned due to decreased productivity, natural plants take over. Although the nutrients in the soil are insufficient to provide a good harvest for farmers, they are still more than sufficient for the natural “pioneer� vegetation, which springs up with a vengeance. In just a couple of years such fields have vegetation a couple of meters tall and growing profusely. Elephants prefer this vegetation as it provides them with a concentrated source of food. With time and through a process known as “succession,� different species of plants take over and the chena fields become secondary forests. Consequently, traditional chenas create ideal habitat for elephants. Due to the rapidly increasing human population, changes in the aspirations and outlook of people, and pressure from groups that consider chena as an undesirable practice, there is a strong movement to convert chena to permanent cultivation. However, most chena lands are not arable and can be cultivated only with rain water. Therefore, only one season of crops per year is possible, and such areas cannot support families throughout the year. In addition, the practice of chena has developed over thousands of years as a form of shifting cultivation because of the low nutrient value of the soil. Converting chena lands to permanent cultivation requires the adoption of practices such as mechanical tilling of soil and use of fertilizer. Consequently, the farmer has to bear a high cost of cultivation and needs to cultivate even larger areas to recover the investment. Since cultivation is rain dependant, droughts and dry spells result in the financial ruin of farmers. The conversion to permanent agriculture also prevents the growth of natural vegetation, slowly converts chena land to bare land, and eliminates their use by elephants and other wildlife. Thus converting traditional chena lands to permanent agriculture is of dubious benefit to the people and is detrimental to elephants. Source: Adapted from Fernando et al. (2005). Household characteristics in the area 59. Households in the survey area are relatively similar in terms of size, composition ,and educational attainment (Table 3.3). Chena households are slightly larger than others in total size and have a higher percentage of male occupants. Female-headed households are more common 40 among nonchena households and are characterized by slightly fewer children. Education attainment is also relatively consistent across chena and nonchena as well as across the gender of the household head. Table 3. 13 Household characteristics Chena Non-Chena Adjoining Not Adjoining Not YNP adjoining YNP adjoining Household size 4.51 4.83 4.02 3.90 % Male 0.53 0.57 0.49 0.50 % Female 0.47 0.43 0.51 0.50 % Male household head 0.86 0.86 0.78 0.77 Number of children 2.17 2.23 1.91 1.70 Years of education Head 6.38 5.93 6.60 6.66 Spouse 7.72 7.75 7.63 8.10 Children 6.75 6.92 5.63 6.75 Number of households 159 69 321 251 Source: World Bank Livelihoods Survey (2008). Sources of income 60. The overall picture that emerges from the survey data is one of communities with a high dependence on natural resources and in the case of chena farmers – on agriculture. Mean reported income varies from a low of between SL Rs 100,000 per year, for nonchena farmers located at a distance from YNP, to a high of SL Rs 142,000 for chena farmers located close to YNP. Households in the survey area derive their income from a wide variety of agriculture and nonagricultural activities (Table 3.4). Agricultural activities include chena, paddy, crop, and livestock production while nonagricultural activities include fishing, small-scale enterprises, forest products, tourism, and off-farm formal employment. For those engaged in chena farming, agriculture is the primary source of income (over 60 percent of total income), while nonchena households, on average, earn approximately 74 percent of their total income from nonagricultural activities such as small-scale enterprises.18 In addition, overall income is also higher for those who adjoin YNP and are not chena farmers. Chena is often recognized as subsistence farming and a livelihood of those with fewer income opportunities. Among chena farmers, income from agriculture is higher for those located closer to YNP, perhaps reflecting the resilience and regenerative capacity of lands located closer to better quality habitats. Very few in the sample derive income from formal sources of employment. 18Microenterprises that include selling of fish, fruits and other goods; handy work; carpentry; and transport are a major source of nonagricultural revenue. Specific activities, and the percentage engaged, included: vendor-seller (fish, fruits, books, paddy—34 percent), handy work (25 percent), carpenters/drivers/rice mill work/saloon work (13 percent), selling (9 percent), garments (6 percent), brick making (4 percent), food processing (3 percent), mechanics and household goods repair (2 percent), weaving/mat-work (1 percent), medicines (1 percent), and electricians (1 percent). 41 Table 3.14 Average income from different economic activities Chena Non-Chena Sources of income Adjoining YNP Not adjoining Adjoining YNP Not adjoining Mean Percent Mean Percent Mean Percent Mean Percent Agricultural income 84,364 93,043 21,362 38,380 Chena 59,648 70.7 44,643 48.0 - - - - Paddy 8,748 10.4 24,832 26.7 8,032 37.1 21,151 55.1 Other seasonal 806 1.0 422 0.5 2,219 10.3 2,245 5.8 highland crops Other permanent 3,805 4.5 10,286 11.1 3,450 15.9 3,627 9.4 highland crops Livestock 377 0.4 376 0.4 1,632 7.5 2,833 7.4 Agricultural labor income 10,979 13.0 12,483 13.4 6,299 29.1 8,525 22.2 Nonagricultural income 52,905 50,700 114,825 65,195 Fisheries 1,867 3.5 232 0.5 48,795 42.5 2,748 4.2 (inland and coastal) Micro-enterprises 24,145 45.6 25,144 49.6 40,307 35.1 27,552 42.3 Forest products 348 0.7 123 0.2 248 0.2 - - Tourism 7,064 13.4 2,609 5.1 1,308 1.1 6,478 9.9 Formal employment 3,890 7.4 4,858 9.6 4,421 3.9 4,907 7.5 Cash receipts 535 1.0 690 1.4 1,234 1.1 1,401 2.1 Nonagricultural 15,056 28.5 17,045 33.6 18,510 16.1 22,110 33.9 labor income Total income 137,269 143,743 136,456 103,575 Source: World Bank Livelihoods Survey (2008). The challenges of farming in the survey area 61. Given the wide variety of income-generating activities listed above, the livelihood challenges are certainly familiar and recognizable. However, the survey also revealed several other major issues to be significant to households. Although security and agricultural productivity issues were a concern, problems with other wild animals as well as elephants were cited as being the most problematic (Table 3.5). Irrespective of location, about 40 percent of respondents noted that wild animal depredations are a major concern in farming, followed by security issues and input cost inflation. Of particular concern for this study are the human-elephant interactions. Table 3.15 Main issues facing chena cultivation Chena cultivation Adjoining YNP Not adjoining Problems from other wild animals 23.9 23.5 Wild elephant problems 19.8 15.9 Security issues in Yala NP 14.3 13.9 High input cost 13.2 15.9 Problems in marketing 11.6 12.7 Other 7.5 6.4 Productivity loss over time 6.4 7.6 Restrictions from the Forest Dept 3.4 4.0 Restrictions from the Dept of Wildlife Conservation 0.0 0.0 Source: World Bank Livelihoods Survey (2008). 42 3.4 Human-Elephant Interactions 62. The pattern of elephant encounters is reflective of location and agricultural practice. Encounters were highest among those engaged in chena cultivation and in particular those located closer to the park (Table 3.6). The seasonality of encounters also closely follows that of the chena cultivation season, with the largest occurrences coming in the Maha season (compare Figure 3.4 to Figure 3.5). The frequency of attacks (i.e., the number of repeated attacks) was also higher among chena cultivators. These occurrences were also found to be statistically significant, where the likelihood of an elephant encounter is greater on chena lands that adjoin YNP and less likely among those who derive greater income from nonagricultural activities (second column in Table 3.7). In addition, repeated encounters on the same land (i.e., the frequency of encounters) are greater on chena lands (third column of Table 3.7). 63. The actual economic losses caused by elephant crop raiding are surprisingly low. The average loss of even the most vulnerable group—chena farmers adjoining YNP—is SL Rs 4,842 and accounts for less than 3.6 percent of annual income. Total HEC losses, across all sampled households, was only about SL Rs 226,000 or US$1,950, so damage compensation scheme requirements would actually be quite modest. On average, the perceptions of most households reflect this low level of impact, even though those with adjoining plots tend to have a higher frequency of encounters (i.e., average frequency of attacks). Compensation for HEC losses is also rarely sought since the only compensation available is for the loss of life. Table 3.16 Attributes of elephant encounters Chena Non-Chena Adjoining Not Adjoining Not YNP adjoining YNP adjoining Elephant problems (%) 39.0 29.0 9.3 6.0 Average frequency of attacks 2.9 1.9 1.5 1.7 Minimum 1 1 1 1 Maximum 25 4 4 3 Perceptions of economic impact of interaction (%) No impact 49.1 62.3 83.5 87.3 Yes, significantly 17.0 10.1 3.4 3.2 Yes, moderately 17.0 14.5 2.5 2.8 Not much impact 17.0 13.0 10.6 6.8 Average crop loss from HEC (SL Rs) 4,842 2,957 545 1,380 Number affected 36 11 5 12 Total losses (SL Rs) 174,317 32,522 2,726 16,561 HEC compensation (no.) 1 1 2 % of damage compensated (SL Rs) 0 0 Number of households 159 69 321 251 Source: World Bank Livelihoods Survey (2008). 1 – Compensators: Ceylinco Grameen, Government 43 Figure 3.14 Seasonality of elephant problems Chena - Adjoining YNP 60 Chena - Not adjoining Non-chena - Adjoining YNP Number of reported elephant problems 50 Non-chena - Not adjoining 40 30 20 10 0 Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Month Source: World Bank Livelihoods Survey (2008). Table 3.17 Determinants of the likelihood and frequency of elephant encounters Elephant encounter Frequency of attack (probit) (negative binomial) Determinants Coefficient Coefficient Chena cultivation 0.92 *** 2.21 *** Household size 0.05 0.02 Agricultural income 0.000000658 -0.000000725 Nonagricultural income -0.00000198 ** 0.000000282 Adjoining YNP 0.30 ** 0.32 Constant -1.68 *** -3.22 *** Alpha 9.38 LR test ~ χ2 (d.f.) 102.46 (5) 46.59 (5) LR test (α=0) ~ χ2 (d.f.) 258.89 (1) Number of observations 800 800 *** significant at the 1% level; ** significant at the 5% level; * significant at the 10% level HEC-related mitigation measures 64. The low value of losses at least partly reflects the success of damage-mitigation measures. The actions and expenditures taken by households to mitigate HEC-related problems are summarized in Table 3.8. Chena cultivators are more proactive as are those in boundary plots to YNP. This trend is also clearly reflected in mitigation expenditures—but even so the absolute amount is again remarkably low. The average amount spent by chena cultivators around Yala is SL 44 Rs 2,728; for chena farmers beyond Yala it is SL Rs 1,188; for nonchena farmers near Yala it is SL Rs 93; and nonchena farmers beyond Yala it is SL Rs 38. The amounts constitute only about 1 to 2 percent of average annual income—a nominal amount relative to expenditures on other agricultural inputs. Table 3.18 HEC-related mitigation expenditures undertaken by farmers (values in SL Rs and percentage of households with positive expenditures in brackets) Chena Non-Chena Adjoining YNP Not adjoining Adjoining YNP Not adjoining Chena cultivation 2,728 1,188 93 38 Electric fences 711 - - 16 (1.9) (-) (-) (0.8) Fences 1,574 944 64 4 (26.4) (17.4) (2.5) (0.4) Firecrackers 431 236 28 18 (36.5) (37.7) (5.3) (3.6) Fire - - - - (23.9) (20.3) (3.1) (2.0) Shouting - - - - (17.0) (10.1) (1.6) (1.2) Other 11 8 - - (3.1) (4.3) (0.3) (-) Paddy + other highland cultivation 534 270 61 425 Electric fences 409 - - 40 (0.6) (-) (-) (0.4) Fences 88 101 46 303 (2.5) (4.3) (2.2) (3.2) Firecrackers 37 168 15 82 (8.2) (7.2) (2.8) (6.0) Fire - - - - (5.7) (4.3) (2.2) (4.4) Shouting - - - - (1.9) (1.4) (1.6) (2.8) Other - - - - (-) (1.4) (0.3) (0.8) Total number of households in 159 69 321 251 each area Source: World Bank Livelihoods Survey (2008). Perceptions of mitigation measures 65. One of the largest mitigation expenditures is on electric fences—but what is the experience and perception of their use? Overall, the perception of electric fences as an effective mitigation measure is mixed, even among those whose crops are protected (Table 3.9). Farmers perceive the fences to be effective, despite the fact that elephants are still witnessed on either side of the fence and still cause crop damage on chena lands. Elephants are found on both sides of the fence since, currently, electric fences are placed along the administrative boundary of the national park and not the ecological boundary. Elephants then break through the fences in search of fodder, and when the fence is repaired elephants appear on both sides. Thus there is a compelling argument to be made for placing the fences along the ecological boundary, around villages and permanent agriculture 45 which would be minimizing the need for elephant migration and fence destruction. In terms of financing fences the survey revealed that among those who are already protected, the Government has supported most investments. Table 3.19 Effectiveness of electric fences (all values in percent) Chena Non-Chena Adjoining YNP Not adjoining Adjoining YNP Not adjoining Percentage of households protected by electric fences 67 55 40 33 Have the fences been effective in minimizing elephant problems? Yes 74 60 93 83 No 26 40 7 17 Are these elephants still on both sides of the fence? Yes 85 100 78 43 No 15 0 22 57 If yes, are they single males or herds? Single male 30 27 34 67 Herds 21 9 10 0 Both 49 64 55 33 Do the herds do damage to your crops? Yes 42 38 11 17 No 58 62 89 83 Has any institution supported the building of the electric fence? Yes 32 13 21 7 No 68 87 79 93 If yes, who? Government 74 60 85 67 Not known 26 40 15 33 Total number of households 159 69 321 251 Source: World Bank Livelihoods Survey (2008). The effectiveness of mitigation expenditures: HEC regressions 66. Perceptions can also diverge from reality. Regression analysis provides one way to examine whether or not electric fences and other mitigation expenditures have been effective (Table 3.10). The survey sample was reduced to include only those who incurred HEC crop losses, or spent money on HEC-related mitigation measures on their chena or paddy lands. Not surprisingly, the results clearly show a strong positive relationship between chena cultivation and HEC crop losses, but mitigation expenditures on electric fences decrease the amount of the loss and those with higher agricultural income are also associated with smaller losses. The results suggest some measure of success with HEC mitigation measures. In terms of impact, on average, investment an electric fence reduces HEC damages by about 39 percent. Other measures are much less effective. 46 For instance, the coefficient for firecrackers is much smaller, suggesting a 10 percent reduction, and for nonelectric fences the reduction is a meager 4 percent. In sum, the mitigation actions, though imperfect, have been successful in providing a measure of protection against wildlife depredations. But what is perhaps surprising is that the monetary losses do not appear to be large and the perception of these losses far exceeds actual losses. Table 3.20 Determinants of HEC losses Dependent variable (1) (2) (3) Ln(HEC losses) Coefficient Coefficient Coefficient Chena cultivation 6.31 *** 6.03 *** 4.14 ** Ln(HEC expenditure on chena lands) -0.25 ** Ln(exp. on electric fences) -0.39 -0.42 * Ln(exp. on fences) -0.04 Ln(exp. on firecrackers) -0.10 Ln(HEC expenditure on Paddy lands) -0.03 Ln(exp. on electric fences) 0.82 ** 0.76 ** Ln(exp. on fences) 0.19 Ln(exp. on firecrackers) -0.02 Household size 0.36 0.53 -0.30 Ln(agricultural income) -0.26 *** *** -0.24 ** Ln(nonagricultural income) -0.02 -0.02 Adjoining YNP -2.02 -2.14 Constant -7.42 *** 0.02 -1.10 R2 0.089 0.122 0.091 Number of observations 162 162 162 *** significant at the 1% level; ** significant at the 5% level; * significant at the 10% level. 3.5 Local Benefits of Tourism and Opportunities for Financing Conservation Current engagement in tourism activities 67. At the heart of the HEC problem lies a familiar conservation dilemma—those who suffer the consequences of living with elephants gain little from the many benefits that could accrue from a thriving nature-based tourism industry. Currently, tourism is a relatively insignificant contributor to income in these areas. Only 14 out of the 800 individuals surveyed have any direct income from tourism-related activities, but the amounts are substantial for the fortunate few—SL Rs 3,013,200 or about US$25,976 across the fourteen individuals per year. The most lucrative positions are those associated with the provision of accommodation or food services (Table 3.11). 47 Table 3.121 Tourism employment and income in the survey area 1 Earnings (SL Earnings per person (SL Job type N Rs) Rs) Tourist guides 1 180,000 180,000 Safari jeep owner 3 432,000 144,000 Safari jeep driver 5 438,000 87,600 Selling food 2 744,000 372,000 Providing accommodation 2 780,000 390,000 Working in an accommodation 3 259,200 86,400 Other 1 180,000 180,000 Source: World Bank Livelihoods Survey (2008). 1 - A few individuals reported income from more than one job of type, hence there is some overlap. 68. This problem is not peculiar to Sri Lanka. As an “enclave industry,� tourism is capital intensive, draws relatively few inputs from the local economy, and exports its earnings outside the region. As a result, few of the direct benefits accrue to local residents and the rural economy. The challenge for the industry and policy makers is to devise strategies that link local community benefits to the primary tourist attraction of YNP—its elephants. Doing so would boost local development and simultaneously ensure more sustainable and inclusive regional development outcomes. Healthy elephant herds not only provide greater ecotourism opportunities that can add value to the parks, but the revenue generated can also be used to compensate farmers for the inevitable losses when farming in or near elephant habitats. Given the extremely modest losses, totaling about SL Rs 226,000 or US$1,950, the resources needed to ensure fair compensation will not be large (Table 3.6). Promoting greater tourism opportunities in Yala National Park 69. The benefits that flow to local communities could be quite substantial if parks were better promoted and visitation numbers were to increase. The tourism survey suggests that the average international tourist who visits a park spends around $796 and stays 12.2 days in the country—or about $73 per day. Of the $796 in total expenditure, 60 percent is spent on hotels, 10 percent on transport, and 15 percent on food and beverages (Table 3.12). Even in the absence of a tourism multiplier, these three expenditures represent about $56 per person per day in additional revenue. International visitation to Yala NP was around 19,000 in 2007, while occupancy rates in the area averaged only 30-40 percent (Sri Lanka Tourism Development Authority 2007). If better park promotion were to lead to increased occupancy rates, revenues could easily double to more than SL Rs 260 million or US$2.2 million annually (Table 3.13). If local benefit sharing arrangements, or employment opportunities, were structured so as to capture even 30 percent of these benefits it would represent an additional SL Rs 80 million or US$680,000 annually to the locals of YNP area. Similar arrangements in other parks would also yield substantial local benefits. Table 3.222 Breakdown of expenditures per person (US$) Category Expenditure % Per day Hotels 484 60.8 39.7 Transportation 83 10.4 6.8 Food and beverages 120 15.1 9.8 Shopping 48 6.0 3.9 Other activities 61 7.7 5.0 48 Source: World Bank Tourist Survey (2008). Table 3.233 Revenue generation potential in YNP Local Local Local Local benefits benefits benefits benefits Visitation, Occupancy Revenue Revenue 10% 20% 30% 30% 2007 rate (%) (SL Rs mil.) (US$ mil.) (SL Rs mil.) (SL Rs mil.) (SL Rs mil.) (US$ mil.) 19,914 39.4 130.08 1.12 13.01 26.02 39.02 0.34 25,272 50.0 165.08 1.42 16.51 33.02 49.52 0.43 30,326 60.0 198.09 1.71 19.81 39.62 59.43 0.51 35,380 70.0 231.11 1.99 23.11 46.22 69.33 0.60 40,435 80.0 264.12 2.28 26.41 52.82 79.24 0.68 Source: Author’s calculations. 70. Benefit-sharing arrangements tend to be highly localized and must be tailored to the individual socioeconomic and habitat condition. The particular needs of an area should be assessed. International experience has been mixed, but program evaluation has led to a number of recommended areas that are necessary for success. For instance, it was found that successful programs in African countries require four key components: long-term institutional support, appropriate identification of the target community and project type, transparency and accountability, and adequate funding (Archabald and Naughton-Treves 2001; Makamea and Boon 2008). Cash transfers have at times been used but are likely to be spent on nonproductive consumption. And while they may contribute to current poverty alleviation, if distributed broadly, they do not generally contribute to development. Thus, private cash distributions may not be optimal in all cases. Harder questions arise when public expenditures are not likely to be very productive either. In this case, one should think seriously about investing in governance capacity and creating the preconditions for more effective use of public expenditures. Historically, support and funding for Yala NP has been weak, and when coupled with the exploitative nature of local tour operators, the overall sustainability of the park is a concern (Buultjens et al. 2005). A meaningful strategy is urgently needed in the case of the park system as a whole. 71. Annex 1 provides a stylized model that yields workable closed form solutions that can be calibrated to determine location specific responses. The parameterization of this model (or extensions thereof) is left for future research. The important conclusion of this study is that few benefits flow to local people and the local development impacts of tourism are well below potential. Additionally, the monetary damage from HEC is surprisingly small. All of this suggests that opportunities abound to build on the development opportunities of nature-based tourism in ways that ensure the long term protection of elephants and their habitats. Sound park management with an integrated and inclusive approach to benefit sharing with the local population can make new inroads to the broader development agenda of rural poverty alleviation. 3.6 The Human-Elephant Conflict around Yala National Park, Sri Lanka: Conclusions 72. The human-elephant conflict represents a development challenge between supporting the livelihoods of those in close proximity to Yala National Park and conserving one of Sri Lanka’s most charismatic species—the wild elephant. Through population and other development pressure, elephants have been confined to the park areas as their last refuge—but this is not ecologically sustainable in the longer term. As elephant habitats shrink even further, the inevitable pattern is clear: increased encounters leading to distorted perceptions of elephants as a pest rather than an 49 asset. The human-elephant conflict is a development and conservation challenge that policy makers and the public must confront. New strategies must be developed that will foster more win- win scenarios. There is a need to move beyond the failed approach of attempting to restrict elephants to DWC protected areas if there is serious commitment to mitigate HEC and conserve elephants. DWC protected areas were only 30% of the elephant range and has been one of the main reasons for failing to restrict elephants to such small ranges. The new approach advocates removing elephants form developed areas, comprising about 20% of their current range and allowing them to range in DWC protected areas, Forest Department reserves and chena lands which are under the jurisdiction of the Forest Department. This will in effect mean that elephants are limited to about 80% of their current range and is a viable proposition. However, since elephants are expected to co-exist with the chena farmers during the cultivation season—a practice that has been going on for decades, despite attempts to restrict elephants to DWC protected areas— localized benefit-sharing programs offer a way forward—changing perceptions of elephants from a liability into an asset through the creation of economic incentives and mechanisms that will improve the livelihoods of those interacting with elephants and conserving their habitat. 73. To better understand the human-elephant interaction, a survey of 800 households was conducted in areas around Yala National Park, focusing particularly on shifting cultivators also known as chena farmers. Chena farming is an informal tenure practice that follows the wet and dry seasons of Maha (wet) and Yala (dry). The crop residual produced on chena lands is excellent grassland fodder for elephants, which often migrate to these areas in the search of scarce food. The ensuing encounters follow this pattern of seasonal production, where lands that adjoin YNP (i.e., Forest Department lands) have a higher probability and frequency of attacks. Farmers perceive these encounters as one of the main challenges to chena cultivation, followed by other wild animal attacks and high input costs. To defend crops, various mitigation measures have been undertaken—such as electric fences, firecrackers, lighting fires, and shouting, each with a varying degree of success. Empirical evidence lends support to the effectiveness of electric fences, with other measures being less effective in avoiding damage. However, actual expenditures on these measures are quite low as are the realized crop losses, with the highest losses being among chena plots adjoining YNP, where farmers spend an average of SL Rs 2,728 on mitigation and realize SL Rs 4,842 per year in crop losses. Overall losses among the sample were approximately SL Rs 226,000 or US$1,950, an encouraging result for any proposed compensation scheme. In addition to compensation, one further recommendation would be to locate fences along the ecological boundary and around villages and permanent agriculture rather than the administrative boundary of the park in order to minimize the interaction. Currently the search for further sustenance is resulting in elephants breaking through administratively bounded fences, with fodder on both sides of the fence. 74. Agricultural income is the mainstay of households around YNP. However, due to subsistence requirements, many people diversify to many nonagricultural activities such as microenterprises, fishing, tourism and other formal employment opportunities. Currently, tourism opportunities represent only about 3.2 percent of total nonagricultural income in the area, and even still this accrues to only a few individuals. A more robust and targeted ecotourism strategy to increase occupancy rates in YNP could potentially double the park’s revenues to SL Rs 260 million or US$2.2 million per year. If even 30 percent of these benefits were to flow to local communities in terms of employment, it would serve to lessen the burden to diversify their income across so many diverse activities, lower their dependence on chena, ameliorate the human-elephant contact, and support greater conservation measures. The greatest impediment to long term conservation of the Asian elephant in Sri Lanka is the human-elephant conflict. Unless meaningful steps are taken to address the conflict, the future of these charismatic giants is in jeopardy. Elephant viewing ranks very 50 highly among visitors to protected areas and the absence or low incidence of elephants in protected areas would most likely mean lower visitation—thus lower revenues from tourism and for conservation. Therefore, elephant conservation and ensuring the long term viewing of wild elephants in Sri Lanka begins with addressing the human elephant conflict. 51 Chapter 4 Conclusion 75. Ranked as a global biodiversity hot spot, Sri Lanka abounds in natural assets that should attract tourists from all over the world. However less than 10 percent of foreign tourists ever visit the country’s national parks; rather, the tourism industry focuses on the high-volume “sun, sea, and sand� segment of the market. Given the country’s unique biodiversity and high density of beautiful wild species such as elephants and leopards, Sri Lanka is well positioned to develop an ecotourism industry and become a more attractive tourist destination. However, fragmentation and poor management of diverse ecosystems, population and development pressures on protected areas, and short-sighted policies are leading to the degradation and irreversible loss of biodiversity in the country. 76. The Government’s ten-year development framework aims at accelerating growth while ensuring a path of sustainable development and prioritizing conservation of the country’s natural assets. In line with this framework, this study focuses on analyzing the options for the protection of natural assets through nature-based tourism with a specific focus on elephant conservation while promoting growth in the tourism industry. The study identifies development opportunities that increase tourism revenues and offer remedies to the human elephant conflict—the impediment to elephant conservation. 4.1 Revenue Potential from Nature-Based Tourism 77. Despite the devastation of the 2004 Tsunami and the escalation of the Civil War in recent years, tourism has remained a resilient contributor to the economy of Sri Lanka. With improved promotion and niche markets that capitalize upon the country’s rich natural assets, tourism’s contribution to the economy could increase substantially. An assessment based on a tourism survey conducted in a small cluster of national parks in the Southern Province indicates potential for increased revenue from nature-based tourism from the protected area network in Sri Lanka. 78. The expenditure patterns that emerged from the survey indicate that travelers who visit the country with a tour package spend on average less than half than an individual (nonpackage) traveler; of the surveyed international travelers, over 76 percent were on packaged tours, and among them, 96 percent of the packages were purchased outside Sri Lanka. These findings have policy implications for the country and incentive to promote individual travel, which could create high-value niche markets, raise revenue from the sector, and possibly decrease revenue leakages by reducing the number of foreign-purchased travel packages. 79. Another simple method of increasing tourism revenue would be through increasing the average length of a tourist’s stay. With almost 70 percent of tourists identifying “pleasure� (e.g., recreation, sun-and-sand, cultural, natural, wildlife tours) as their main reason for travel, increasing a nature tourist’s duration in Sri Lanka could be accomplished through better marketing of its national parks. Currently the vast majority of tourists do not visit the parks, but the survey reveals a strong willingness to add a park visit to their trip. 80. Along with better marketing, improved conditions of the national parks (e.g., less traffic congestion, improved infrastructure facilities, more shopping opportunities, and diverse activities) 52 have the potential to increase tourism revenue. To assess the scope for raising additional revenue, the tourist survey was used to ask nature tourists their willingness to pay park entrance fees (1) to enjoy the national parks as they currently stand and (2) for specific improvements in the park. Results from the survey indicate that both international and local tourists are willing to pay higher than their current entrance fees, for park improvements as well as for the parks’ current conditions. The findings imply that simply imposing a 30 percent increase on park entrance fees would result in an increase in park revenues of more than $369,000 per year. With improved park conditions and with a more proactive tourism initiative that encourages current nonpark tourists to visit, entrance fee revenues have the potential to increase to more than $6 million annually, representing over $55 million in 10 years. This demonstrates the potential revenue for investing in conservation and protection of the protected area network in Sri Lanka which has the highest biodiversity per unit area in Asia and conservation of one of the most charismatic species—the Asian elephant. 4.2 The Impediment to Elephant Conservation—Human-Elephant Conflict 81. The charismatic and celebrated wild elephants form the basis of Sri Lanka’s nascent ecotourism industry and are the flagship attraction of its national parks with the best opportunity of viewing wild Asian elephants in the world. While there is vast scope to capitalize on this natural tourist asset, there are serious conservation challenges that need to be addressed for its full economic potential to be realized. Elephants have large home ranges that are not adequately provided for by protected areas and national parks, and they are edge species that prefer the vegetation found in degraded and secondary forest habits. Consequently, more than two-thirds of the wild elephant population is found outside of protected areas, grazing on agricultural lands and disturbing and threatening the livelihoods of local farmers, chena households in particular. This friction between humans and elephants, termed human-elephant conflict, presents a development challenge between supporting the livelihoods of those living in close proximity to national parks and conserving Sri Lanka’s flagship species, the wild elephant. Furthermore, this study finds that the local residents who suffer the consequences of living near elephants receive only a small share of the benefits accrued from the nature-based tourism industry that thrive on wild elephants. Policy makers are thus confronted with the challenge of developing strategies that link local benefits to the nature tourism industry. 82. This study suggests there is great potential in devising strategies that build on development opportunities in nature tourism, particularly those that ensure the conservation of wild elephants and their habitats while alleviating the human-elephant conflict. Improving park management and locating fences along ecological rather than administrative boundaries can minimize human- elephant interactions. Healthy elephant herds can boost ecotourism opportunities, adding value to local parks; the increased revenue generated can be used to compensate farmers located near elephant habitats who inevitably experience losses. Results from a livelihood survey conducted among 800 households in the vicinity of Yala National Park indicate that the cost of mitigation measures (e.g., electric fences, firecrackers, shouting) used to defend crops against wild elephants are quite low, as are the realized crop losses. These findings suggest that a compensation scheme may be successful in facilitating a flow of benefits to local communities while also ensuring the conservation of wild elephants. 53 References Archabald, K. and L. Naughton-Treves. 2001. Tourism revenue-sharing around national parks in Western Uganda: early efforts to identify and reward local communities. Environmental Conservation 28 (2): 135–149. Buultjens, J., I. Ratnayake, A. Gnanapala, and M. Aslam. 2005. Tourism and its implications for management in Ruhuna National Park (Yala), Sri Lanka. Tourism Management 26: 733–742. Fernando, P., E. Wickramanayake, D. Weerakoon, L.K.A. Jayasinghe, M. Gunawardene and H.K. Janaka. 2005. Perceptions and patterns in human-elephant conflict in old and new settlements in Sri Lanka: insights for mitigation and management. Biodiversity and Conservation 14: 2465-2481. Makamea, M.K. and E. K. Boon. 2008. Sustainable tourism and benefit-sharing in Zanzibar: the case of Kiwengwa-Pongwe Forest Reserve. Journal of Human Ecology 24(2): 93-109. Sri Lanka Tourist Board. 2004. Annual Statistical Report of Sri Lankan Tourism - 2004. Colombo, Sri Lanka. Sri Lanka Tourist Board. 2005. Annual Statistical Report of Sri Lankan Tourism - 2005. Colombo, Sri Lanka. Sri Lanka Tourist Board. 2006. Annual Statistical Report of Sri Lankan Tourism - 2006. Colombo, Sri Lanka. Sri Lanka Tourism Development Authority. 2007. Annual Statistical Report of Sri Lankan Tourism - 2007. Colombo, Sri Lanka. Sukumar, R. 2006. Review of the Wild Elephas Maximus, International Zoo Year Book, New York. 54 Annex 1: A Stylized Model of HEC without Elephant Dynamics This is a simple model with functional forms crafted to yield reduced form solutions and where the structure is also guided by the data that is available from the survey. The representative household in the study area has two choices – to devote effort to agriculture (La) or some “outside� non-agricultural activity (Ln). Thus the labor constraint is: L* = La + Ln (1) where L* = total labor supply per household. Without loss of generality we normalize L* to unity. Let pnNLn = PnLn = Pn(1 - La) be the returns from the non-agricultural activity. Where pn is price, N is the marginal product of labor. For simplicity we assume CRS to all activities unless otherwise stated. Let ALaPa be the revenue from agriculture before an elephant attack; where A is the marginal product of labor (or per unit output from a unit of labor input) and Pa is the price of agriculture. A fraction E of the produce is consumed by elephants and the damage can be partially prevented by investing in mitigation measures (such as fencing) denoted F. The intervention is never completely effective so that the losses are given by: AEF�La, where � < 1. The costs of mitigation measures are cF. Net revenues from agriculture are thus given by: ( �) (2) The representative household maximizes: ( �) (3) The solutions are: )1/� (4) Observe that investment in mitigation measures is increasing in the returns from agriculture (PaA) and declining in the marginal returns to the opportunity cost of agriculture - the outside activity Pn. (5) Where � ( ) Similarly labor devoted to agriculture rises with the payoffs and declines with the opportunity cost, the extent of damage and the costs of fencing. These are standard results and intuitive. Now the model is extended to allow for insurance/ compensation and tourism or other elephant related activities. A fraction � of crop losses are recovered through insurance or some form of compensation mechanism. In addition there are employment opportunities for elephant related tourism denoted by the revenue function: Rt = PtE� (6) Where subscript t denotes tourism. Note that if labor is excluded this could be modeled as a simple PES scheme. The augmented maximization problem becomes 55 ( � � ) (7) Where e is the size of the elephant herd. Solutions are: � � (8) Z (9) Where � � ; ( ) As expected compensation (�) reduces the incentive to fence or protect crops and also increases the allocation of time devoted to agriculture. ( ) (10) Similarly elephant tourism increases with the marginal payoffs and declines with the opportunity cost of outside activities. Higher elephant numbers (e) are a clear bonus in this context. Suggested Simulations This framework can be used to ask and answer a number of policy questions. Which strategy is more cost effective? How much needs to be transferred and how? Equations (2) – (5) define the BAU (base case) with damage. Set E = 0, then this is the situation without elephants and defines the level of compensation needed to make the household at least as well off with elephants, as without them. This is the key to turning elephants from a liability to an economic asset for households who live with them. Eqns (7) – (10) define the rudimentary policy interventions. We can ask and answer the following questions: 1. How much extra revenue needs to be generated to ensure that the household is at least as well off with elephants, as without them. i.e. set E = 0 and then E at its empirical value from the survey. 2. Which policy instrument is more effective for each dollar spent? Note it is not straight forward anymore as household responses are endogenous. For instance, if we have insurance  less fencing and more agricultural effort and so more damage, ceteris paribus. 3. How should we compensate farmers? What mechanisms work and how much of a problem is moral hazard, etc. 56 Annex 2: Table A2.1 Tourist arrivals by country of residence & purpose of visit - 2007 Private & Visiting Nationality Official Convention & Friends & Religious & Total Business Meetings Relations Cultural Pleasure Other Percent North America 28,355 2,571 366 5,556 741 17,265 1,856 5.7 Canada 11,869 693 114 3,189 249 6,591 1,033 - U.S.A. 16,486 1,878 252 2,367 492 10,674 823 - Latin America & Caribbean 3,962 318 66 216 97 3,195 70 0.8 Western Europe 194,448 10,445 1,095 11,805 1,743 163,732 5,628 39.4 Austria 3,580 171 15 129 33 3,168 64 - Belgium 4,669 276 39 189 9 4,008 148 - Denmark 1,796 207 9 165 24 1,296 95 - Finland 497 51 6 39 6 381 14 - France 8,091 618 54 627 147 6,222 423 - Germany 35,042 2,073 147 1,485 273 30,198 866 - Italy 11,451 648 72 423 129 9,714 465 - Netherlands 17,526 621 48 927 81 15,492 357 - Norway 2,304 264 18 321 33 1,473 195 - Spain 2,484 216 18 108 9 2,008 125 - Sweden 4,851 468 60 528 54 3,567 174 - Switzerland 4,917 255 24 369 33 4,101 135 U.K. 94,060 4,332 537 6,474 909 79,263 2,545 - Others 3,180 245 48 21 3 2,841 22 - Eastern Europe 25,573 3,376 712 668 75 9,196 11,546 5.2 Russia 13,621 360 117 254 129 12,357 404 - Others 11,952 492 96 294 180 9,000 1,890 - Africa 2,712 501 174 210 663 894 270 0.5 Middle East 13,554 1,572 324 129 183 8,025 3,321 2.7 Asia 202,480 31,867 4,648 15,427 10,170 115,808 24,560 41.0 China (P.R.) 11,949 2,799 141 345 147 7,755 762 - Hong Kong, China 186 54 3 6 3 114 6 - India 106,067 18,351 2,883 7,716 7,269 58,083 11,765 - Indonesia 1,404 138 84 78 39 543 522 - Japan 14,274 2,547 159 810 138 10,134 486 - Korea (South) 4,870 1,044 69 360 57 3,021 319 - Malaysia 6,704 1,296 189 585 336 3,711 587 - Maldives 29,539 1,629 249 3,507 531 15,834 7,789 - Pakistan 10,204 1,167 477 963 1,173 5,424 1,000 - Philippines 2,162 351 57 237 54 906 557 - Singapore 5,688 1,269 183 555 180 3,303 198 - Thailand 2,467 216 27 108 201 1,629 286 Taiwan (P.C.) 2,553 348 12 129 15 1,830 219 - Others 4,413 658 115 28 27 3,521 64 - Australasia 22,924 1,466 235 6,957 230 13,123 913 4.6 Australia 20,241 1,332 204 6,152 189 11,544 820 - New Zealand 2,627 126 27 804 39 1,542 89 - Others 56 8 4 1 2 37 4 - Total 494,008 52,116 7,620 40,968 13,902 331,238 48,164 100.0 Percent 10.5 1.5 8.3 2.8 67.1 9.7 100.0 Source: Sri Lanka Tourism Development Authority (2007) 57 Table A2.2 Visitation rates and revenue generation from National Parks 2005 2006 2007 Local Foreign Total Local Foreign Total Local Foreign Total Bundala National Park Visitation 4,821 2,351 7,172 7,695 4,552 12,247 6,214 4,319 10,533 Revenue (Rs.) 104,491 1,607,910 1,712,401 2,266,698 3,140,880 5,407,578 281,834 5,880,311 6,162,145 Gal Oya National Park Visitation 181 3 184 189 2 191 653 22 675 Revenue (Rs.) 4,115 4,140 8,255 18,178 2,760 20,938 50,475 46,823 97,298 Horagolla National Park Visitation 1,242 3 1,245 2,128 4 2,132 1,352 2 1354 Revenue (Rs.) 20,153 2,070 22,223 82,165 2,760 84,925 55,058 3,629 58,687 Horton Plains National Park Visitation 183,413 11,272 194,685 174,392 15,144 189,536 171,949 9,395 181,344 Revenue (Rs.) 3,753,063 15,391,140 19,144,203 15,243,699 21,201,600 36,445,299 6,544,709 26,701,755 33,246,464 Kaudulla National Park Visitation 8,890 6,099 14,989 5,185 5,682 10,867 8,946 4,999 13,945 Revenue (Rs.) 199,382 4,170,570 4,369,952 2,258,298 3,920,580 6,178,878 407,187 6,789,437 7,196,624 Kumana National Park Visitation 1,295 112 1,407 899 119 1,018 - - - Revenue (Rs.) 29,780 75,920 105,705 1,614,772 82,110 1,696,882 - - - Lunugamvehera National Park Visitation 489 6 495 471 64 535 467 112 579 Revenue (Rs.) 11,247 4,140 15,387 47,746 64,160 111,906 23,662 159,913 183,575 Maduru Oya National Park Visitation - - - 62 - 62 9 2 11 Revenue (Rs.) - - 25,987 3,740 - 3,740 9,871 11,575 21,446 Minneriya National Park Visitation 24,914 6,964 31,878 20,048 8,382 28,430 22,334 6,005 28,339 Revenue (Rs.) 547,704 549,923 1,097,627 15,661,981 1,508,760 17,170,741 771,542 13,522,452 14,293,994 Singharaja Forest Reserve 1 Visitation - - - - - 29,179 27,364 4,829 32,193 Revenue (Rs.) - - - - - 3,462,761 - - 2,682,620 Uda Walawe National Park Visitation 55,507 11,912 67,419 64,788 16,796 81,584 55,362 12,896 68,258 Revenue (Rs.) 1,201,561 16,205,340 17,406,901 14,971,613 23,514,400 38,486,013 3,544,993 33,944,545 37,489,538 Wasgamuwa National Park Visitation - - - 33,033 485 33,518 32,130 590 32,720 Revenue (Rs.) - - 4,389,643 4,431,279 334,650 4,765,929 3,382,191 1,847,355 5,229,546 Wilpattu National Park Visitation 14,554 1,105 15,659 3,364 531 3,895 - - - Revenue (Rs.) 316,086 734,940 1,051,026 3,917,630 366,390 4,284,020 - - 790 Yala National Park Visitation 93,656 17,614 111,270 85,608 32,437 118,045 64,020 19,914 83,934 Revenue (Rs.) 2,057,235 23,945,760 26,002,995 31,612,372 45,411,800 77,024,172 3,154,673 50,024,572 53,179,245 Total Visitation 388,962 57,441 446,403 397,862 84,198 511,239 363,436 58,256 453,885 Revenue (Rs.) 8,244,817 62,691,853 75,352,305 92,130,171 99,550,850 238,037,782 17,060,380 142,781,592 159,841,972 Source: Sri Lanka Tourism Development Authority (2004, 2005, 2006, 2007); Notes: 1 – Singharja is a Forest Reserve, not a National Park 58 Annex 3 Tourist survey design and methodology Sample Stratification Tourists were stratified into several categories of tourist types, owing to the rather unique composition of the Sri Lankan tourism market. Special attention was made to try and represent the current structure by sampling according to the arrival statistics and based on the opinion of those knowledgeable in the industry.19 Since the majority of tourists are those who normally do not visit a park, the sample was deliberately over-weighted by this tourist-type. This sub-group however was still presented with the willingness to pay question, but obviously from a more hypothetical setting. The sample also included those who did visit a park, stratified across the five surveyed parks. A distinction was also made between local and international tourists as they may represent different preferences for park experiences (i.e. expenditures or willingness to pay). In addition, the local population was included since they constitute a significant proportion of visitation to the parks; as seen in Chapter 2. Sample Selection Although the overall sample stratification was pre-set to be representative of the current population of tourists, the selection of tourists within each category was based on a random interception procedure. In the case of hotels or lodges, permission was obtained from the hotel manager to solicit his/her guests and also to make them aware of the purpose of this survey. Enumerators would then interview every i th tourist out of a total number that would be required per day to achieve a representative sample for the location. In the case of interception at or near the parks, tourists were contacted after they had visited the park, normally at the park gate or in hotels lodges or even restaurants near the site. There were also instances where large groups on tour buses would arrive at the park. In this case, an agreement with the driver was made that upon exiting the park, respondents would be asked whether they would answer a few questions about their experience in the park.20 In other instances, respondents were traveling individually and not part of a group so interception was not an issue. One immediate question about any sample is whether it can be considered representative of the total population of visitors, which number in the hundreds of thousands per year in Sri Lanka. One quick measure that can be used is the confidence interval which represents the lower and upper bound for the mean. Interval estimates give an indication of how much uncertainty there is in the estimate of the true mean. The rule of thumb is the narrower the interval, the more precise is the estimate. Creating a 95% confidence interval means that if many samples of size N were taken from the population and the confidence interval is calculated, 95% of these intervals would contain the true mean. Table 3.22 95% Confidence interval for selected indicators 1 19 Approximately 80% of the tourist arrivals do not visit a park, and this was the most important criteria to replicate in the sample selection, along with a significant local resident representation. 20 Making arrangements with the hoteliers and the drivers of the tour group turned out to be essential for the success of tourist interception. Getting prior approval from hotel managers was just good sense if enumerators are hanging out in the lobbies, but in the case of the parks, tourists were often horded back onto buses and expedited away by the drivers. Thus a more effective strategy was developed during the pre- testing phase where talking to the drivers while they were waiting for the tourists to return from the park and an agreement was made to allow tourists to be asked questions after exiting the park. 59 N Mean Lower bound Upper bound Average expenditure per tourist trip 187 313 289 337 Number of days in Sri Lanka 187 12.7 12.3 13.0 Willingness to pay for Yala NP 33 14.73 14.68 14.77 Source: Sri Lanka Tourism Development Authority (2007) 1 – All figures are for an international park tourist on a packaged tour The table above gives an example of the 95% confidence interval for three key variables in the analysis. In this case, the average expenditure by an international park tourist, on a package tour is between $289 and $337. The average number of days spent in Sri Lanka by the same tourist is from 12.3 to 13 days. This tourist type is willing to pay between $14.68 and $14.77 to visit Yala National Park. The narrow range of these confidence intervals implies a high degree of reliability of the sample means as estimates of the true population mean. The ‘true’ number of tourists In order to determine the economic impact of tourism on the economy it is important to know what the total universe of tourists is for the analysis. Also, for the purposes of policy setting it would be important to distinguish between types of foreign arrivals so that the imposition of a revenue generating mechanism caters to that specific sub-group of tourist. For example, conservation taxes can be levied only on those considered to be ‘users’, or could be imposed on all those departing the country. Examples of these types of levies and taxes were presented in Table 2.49 in the form of embarkation taxes and levies, currently imposed on departures. Table 3.23 below shows the total number of arrivals by purpose of visit where the ‘Pleasure’ category is the one associated with tourism and is over 67% of arrivals. Thus there are, potentially, 331,238 tourists that could participate in nature-based or ecotourism activities. The total of 494,008 would be applicable in the case of imposing more broad financing mechanisms on air- or sea-port departures. Table 3.23 Tourist arrivals by country of residence & purpose of visit - 2007 Private & Visiting Official Convention & Friends & Religious & Total Pleasure Business Meetings Relations Cultural Other Total by purpose of visit 494,008 331,238 52,116 7,620 40,968 13,902 48,164 Percent 67.1 10.5 1.5 8.3 2.8 9.7 Source: Sri Lanka Tourism Development Authority (2007) 60 Annex 4 Tourist survey, 2008 (International Park Tourist) SRI LANKA VISITOR SURVEY FOR INTERNATIONAL PARK TOURISTS Interview No Area code Interviewer’s code ASK THE VISITOR IF HE/SHE HAS ALREADY BEEN INTERVIEWED AT ANOTHER SITE. IF YES, THEN WITHDRAW POLITELY; IF NO, THEN PROCEED Hello my name is………………………………………and I am a research assistant for a visitor survey conducted in collaboration with the Ministry of Tourism and Ministry of Environment and Natural Resources. We are undertaking a study of tourists to Sri Lanka on their activities and to get their opinion of how Sri Lanka can expand its ecotourism opportunities. All information gathered will only be used for statistical analysis, presented in the aggregate and individual responses will be kept strictly confidential. Would you be willing to answer a few questions? IF YES, THEN PROCEED; IF NO, THEN WITHDRAW POLITELY A. SOCIO-DEMOGRAPHIC INFORMATION First, I would like to ask you a few questions about yourself. 1. Gender? Male 1 Female 2 2. Can you indicate by looking at this card what is the age group that you belong to? 18-24 years 1 25-34 years 2 35-44 years 3 45-54 years 4 55-64 years 5 65-74 years 6 75 or more 7 3. What is your nationality and country of residence? Circle one only. Country 3.1 Nationality 3.2 Residence American (USA) 1 1 Australian 2 2 Belgian 3 3 British 4 4 Canadian 5 5 Chinese 6 6 Danish 7 7 Dutch (Netherlands) 8 8 61 French 9 9 German 10 10 Indian 11 11 Italian 12 12 Japanese 13 13 Korean 14 14 Malaysian 15 15 Maldivian 16 16 Pakistani 17 17 Russian 18 18 Singaporean 19 19 South African 20 20 Spanish 21 21 Swedish 22 22 Swiss 23 23 Thai 24 24 Other, please specify: ___________________ 4. Are you currently a member of any conservation, wildlife or environmental organisations? Yes 1 No 2 5. By looking at this card, which category would best describe the highest level of education you have attained until now? Circle one only. No formal education 1 Primary school (up to 11 years old) 2 Lower Secondary school (up to 15 years old) 3 Upper Secondary school (up to 18 years old) 4 Professional qualification or diploma 5 College degree 6 Higher degree (MSc or PhD) 7 6. By looking at this card, can you indicate which category would better describe your current work status? Circle one only. Self-employed 1 Employed full-time (30 hours plus per week) 2 Employed part-time (under 30 hours per week) 3 Student 4 Unemployed 5 Looking after the home full-time / housewife / husband 6 Retired 7 Do not work: private means 8 Unable to work due to sickness or disability 9 Unpaid voluntary work 10 Other work status, please specify: 7. By looking at this card can you indicate which category would better describe your INDIVIDUAL yearly gross (personal) income? 62 If the respondent only remembers their household income, skip to QUESTION 8 For international tourist Income category Currency 10,000-20,000 1 20,001-40,000 2 40,001-60,000 3 60,001-80,000 4 80,001 and above 5 Currency Dollar = 1 Pound = 3 Euro =2 Rupee = 4 Other currency: Please specify ____________ 8. By looking at this card can you indicate which category would better describe your HOUSEHOLD yearly gross income? For international tourist Income category Currency 20,000-40,000 1 40,001-60,000 2 60,001-80,000 3 80,001-100,000 4 100,001 and above 5 Currency Dollar = 1 Pound = 3 Euro =2 Rupee = 4 Other currency: Please specify ____________ 9. We are interested in measuring the value of time of tourists. Typically we measure this as a fraction of the wage or salary a person would make while working. Approximately how much do you earn in one week (5 days)? Looking at this card, what would the approximate amount be? Amount Category Currency Under 100 1 101 – 200 2 201 – 300 3 301 – 500 4 501 – 750 5 751 – 1000 6 1001 – 1500 7 1501 – 2000 8 2001 – 3000 9 3001 – 4000 10 4001 – 5000 11 5001 and above 12 Any other amount (specify) 13 I do not know 14 Currency Dollar = 1 Pound = 3 Euro =2 Rupee = 4 Other currency: Please specify ____________ 63 10. How many members live with you in your household, including yourself? How many are children? 10.1 Household members _____ 10.2 Number of children _____ B. CURRENT TRIP INFORMATION 11. How many times in total have you visited Sri Lanka (including this trip) in the last ten years? Circle one only. 1 (it is my first time) 1 2 2 3-5 3 6-10 4 Over 10 5 12. What is the main reason you came to visit Sri Lanka? Circle all that apply. 12.1 I came for business reasons 1 12.2 I came for a conference 2 12.3 I wanted to visit a specific park/reserve or site 3 12.4 I came for a sun and sand trip only 4 12.5 I came to shop 5 12.6 I came for an adventure trip (rafting, boating) 6 12.7 I came for a cultural trip (heritage sites, villages) 7 12.8 I came for viewing and photographing wildlife 8 12.9 I wanted to visit friends or family 9 12.10 It was included in my packaged tour 10 12.11 It was recommended by friends/ relatives/ book 11 12.12 I had a really good experience during my previous trip 12 12.13 Other reason, please specify: 13. How many days in total are you spending in Sri Lanka during this trip? How many as a tourist? 13.1 Record total number of days in Sri Lanka 13.2 Record number of days spent as a tourist 14. How many people are in your travel party, including yourself? Number of people IF ANSWER IS 1 GO TO QUESTION 16 15. Who are you travelling with? Circle one only. 64 Family 1 Friends 2 Family and friends 3 Work colleagues 4 Other people, please specify: 16. Which of the following national parks/forest reserves in Sri Lanka have you visited during this trip? 1= visited, 0 = Not visited Site Response for current trip Bundala 16.1 Mineriya 16.2 Singharaja 16.3 Uda Walawe 16.4 Yala 16.5 Other (specify) 16.6 17. If your current trip includes a visit to only ONE park/reserve, why did you not consider going to more than one park/reserve? Circle one only. I do not know anything about the other parks/reserves or what there is to see 1 The tour operator only offered this park/reserve 2 I did not have enough money for multiple parks/reserves 3 I would rather spend my money on shopping 4 I would rather spend my money on something else 5 Other reason, please specify: 18. In regards to your current trip to the park/reserve, did you make independent tour arrangements or is your visit a: Circle one only. Package tour 1 Part of a package tour 2 Independent traveller 3 19. Was your current package tour purchased in Sri Lanka or in your resident country? Sri Lanka 1 Resident country 2 Not applicable 3 20. Did your packaged tour include options to visit national parks or forest reserves? Yes 1 No 2 65 Not applicable 3 21. When purchasing your package, would you have liked to see more details of different nature tourism opportunities? Yes 1 No 2 Not applicable 3 22. How long did it take to travel from your starting point to the park? ____hours ____minutes 23. Approximately how much did you spend in total for each of the trip expenses below? If you cannot recall any item what was the total cost and approximately the percentage of total cost? Package tourists Independen t traveler Item Included in Item cost Percentage of Item package total cost cost 23.1 International air fare 23.2 Hotels/accommodation 23.3 Transportation/transfers 23.4 Food and beverages 23.5 Park entrance fees 23.6 Other activities 23.7 Shopping 23.8 Total cost 23.9 Currency Currency Dollar = 1 Pound = 3 Euro =2 Rupee = 4 Other currency: Please specify ____________ 24. For how many people does this total cost cover? __________people 25. How many sites did this total cost cover? _______number of sites C. PERCEPTIONS OF NATIONAL PARKS/ FOREST RESERVES We would now like to ask for your opinion of the national parks/forest reserves. 26. There are many reasons why conservation of wildlife and natural landscapes in national parks/reserves might be regarded as important for society. Please choose the one you feel is most important to you personally. Circle only one. People who visit benefit directly (recreation, enjoyment, education, etc) 1 People who do not visit can benefit indirectly (documentaries, books, etc) 2 It ensures that we all have the option of visiting in the future 3 It is important for the sake of the animal and plant life, regardless of its current or future use 4 It is important for the local population (part of their culture and identity) 5 66 It is important for future generations 6 It contributes to the country’s economy through local livelihoods, employment, tourism, business, etc 7 Other reason, please specify: I am now going to read out a number of features of your visit to Sri Lankan natural sites. Please rank them using a scale that ranges from 1 = ‘very bad’ to 5 = ‘very good’. 1 – Very bad 2 – Not so bad 3 - Neutral 4 – Quite good 5 – Very good 99- Not applicable ��� � �� � ��� 27. Insert code from the scale above and for ONLY the parks/reserves visited. Site attributes Bundala Mineriya Singharaja Uda Walawe Yala Other 1. Wildlife: number and diversity of species 2. Congestion: number of people/vehicles on site 3. Site and restroom cleanliness 4. Visitor centre/ site information 5. Knowledge of guide/interpreter 6. Organised excursions 7. Accommodation 8. Availability of food/drinks (restaurants) 9. Facilities for children 10. Diversity of activities 11. Friendliness of staff 12. Shopping opportunities 13. Value for money 14. Transport experience to/from park 15. Overall experience 28. What features would you like to see improved or introduced at these, or any other, sites? You may use the attribute codes above in Question 27. Site visited Record improvement or introduction Bundala 28.1 Mineriya 28.2 67 Singharaja 28.3 Uda Walawe 28.4 Yala 28.5 Other 28.7 29. Do you plan to visit Sri Lankan natural sites again in the future? Circle one only. Yes 1 No 2 D. NATIONAL PARK/FOREST RESERVE VALUATION SECTION 30. Circle current park/reserve location and remind respondent of the current entrance fee. Site Entry fee/person/day Location Bundala National Park $14 USD 1 Minneriya National Park $14 USD 2 Sinharaja Forest Reserve $14 USD 3 Uda Walawe National Park $14 USD 4 Yala National Park $14 USD 5 31. Suppose while you were planning your trip to this park/reserve you learned that the entry fee had increased. What is the maximum fee you personally would be prepared to pay to visit this site? Please do not agree to pay an amount that you cannot afford, that you are unsure about, or that you feel would be better spent on other things (Show the payment card) Record the fee Currency 31.1 31.2 Currency Dollar = 1 Pound = 3 Euro =2 Rupee = 4 Other currency: Please specify ____________ IF THE AMOUNT INDICATED IS MORE THAN THE CURRENT FEE: GO TO QUESTION 33 32. What are the main reasons why you are NOT willing to pay any more than the current fee to visit this site? I think the current fee is appropriate 1 I think the fee is already too much 2 I think that any increase should be financed from other sources 3 Other reasons, please specify THEN GO TO SECTION E 68 33. The Government of Sri Lanka has proposed several improvements to the site such as (Please only read out the appropriate set of improvements for the current park visited): Bundala National Prak:  Upgrading the camping facilities inside the park  Provision of bungalows inside the park  Improving the quality and experience of visitation with better interpretation services provided by the Department of Wildlife Guides  Develop Wilmanna Santuary across the road to provide opportunities for viewing large herds of elephants  Provision of night safaris, and viewing platforms during moonlit nights near watering holes Minneriya National Park:  Provision of camping facilities and bungalows inside the park  Limiting traffic and the number of vehicles entering the park to reduce congestion  Improving the quality and experience of visitation with better interpretation services provided by the Department of Wildlife Guides  Provision of Elephant Safari’s inside the park  Provision of boating facilities in Minneriya Tank for elephant viewing  Provision of opportunities for night safaris, and viewing platforms during moonlit nights near watering holes Singharaja Forest Reserve:  Visitor centres with exhibits, clean restrooms, restaurants, introduction of camping facilities inside the reserve and bungalows in the buffer zones of the reserve  New visitor services such as elephant safaris and nature trails  Improving the quality and experience of visitation with better interpretation services provided by the Forest Department Guides Uda Walawe National Park:  Upgrading the camping facilities and better maintained bungalows inside the park  Limiting traffic and the number of vehicles entering the park to reduce congestion  Improving the quality and experience of visitation with better interpretation services provided by the Department of Wildlife Guides  Provision of opportunities for night safaris, and viewing platforms during moonlit nights near watering holes Yala National Park:  Visitor centres with exhibits, clean restrooms, restaurants, camping facilities and better maintained bungalows inside the park  New visitor services such as elephant safaris, nature trails, visiting cultural sites/ruins, night safaris, and viewing platforms during moonlit nights near watering holes  Limiting traffic and the number of vehicles entering the park to reduce congestion  Improving the quality and experience of visitation with better interpretation services provided by the Department of Wildlife Guides 33. Suppose that the entrance fee were to increase by 20% with these improvements. What is the maximum fee you personally would be prepared to pay to visit the site in this case? Please do not agree to pay an amount that you cannot afford, that you are unsure about, or that you feel would be better spent on other things (Show payment card) Record the fee Currency 69 33.1 33.2 Currency Dollar = 1 Pound = 3 Euro =2 Rupee = 4 Other currency: Please specify ____________ IF THE AMOUNT INDICATED IS MORE THAN THE CURRENT FEE: GO TO SECTION E 34. What are the main reasons why you are NOT willing to pay any more to visit this site if the changes described had been implemented? I do not think these improvements are worth more than my previous maximum 1 I do not think these improvements should be financed through entrance fees 2 I do not think these improvements are worth the increased fee 3 Other reasons, please specify E. MISCELLANEOUS QUESTIONS Finally, these are the last few questions. 35. What will you remember most vividly about your visit to this site? This might be a good or a bad thing! Record memory 36. Last of all, what did you think of this questionnaire? Circle all that apply Interesting 1 Too long 2 Difficult to understand 3 Educational 4 Unrealistic/ not credible 5 Other opinion, please specify This is the end of the interview! Thank you very much for your co-operation! F. INTERVIEWER DECLARATION 37. Time ended (24 hour clock): 38. Total time taken: _______minutes Date: This interview was conducted face to face with a respondent who is unknown to me Please print your name: Signature: 70 71 Annex 5 Perceptions of the HEC and tourism-related benefits Perceptions of the Department of Wildlife and Conservation (DWLC) The survey also elicited responses on the farmer’s perception of the primary agency responsible for elephant issues – the Department of Wildlife and Conservation (DWLC). A majority believe that progress has been made, but more could be done to mitigate human-elephant interactions (Table A3.1). The suggested options are approximately split between better maintenance of the electric fences and chasing away the elephants outside the fence. Table A3.1 Perceptions of the DWLC on wild elephant mitigation issues (all values in percent) Chena Non-Chena Adjoining Not Adjoining Not YNP adjoining YNP adjoining How do you perceive the intervention of the DWLC in wild elephant problems? Doing a good job 35 27 33 21 No significant intervention 49 48 45 45 No intervention at all 13 19 15 25 Negative perception 3 6 6 9 What could be the ways to reduce this problem? (%) (multiple answers possible) Properly maintain electric fences 40 33 40 37 Chase away elephants outside the fence 44 39 39 36 Provide villages with crackers 13 20 13 15 Other 3 8 8 11 Number of households 159 69 321 251 Source: World Bank Livelihoods Survey (2008) Focus group opinions on the HEC The HEC issue is contentious perhaps more so because of the fear induced by the presence of elephants and because at times it involves the loss of lives of both people and elephants. As a consequence there have been concentrated efforts to try and mitigate the HEC, including electric fences (Table A3.2). Again, there are mixed views on the effectiveness of mitigation measures (as also confirmed by the regression analysis). Table A3.2 Community opinions about the HEC during the focus group sessions 72 Assistance to mitigate wild elephant GN Division Wild elephant problems problems Kirinda  Households in the division have  Since Chena cultivation is practiced on (# Households: 924) faced many wild elephant problems unauthorized lands, there is not much before the electric fence around YNP assistance from the government was established in 2002 – 2003  There are occasions where compensation  Before the fence was established is provided for lost lives elephants were responsible for  When houses were damaged, around significant damage to stored paddy 25% of the cost of damage was covered and crops. Even fishermen were by compensation affected, being attacked on their  Farmers have not purchased any way to go fishing in the early insurance products so far morning  Farmers collectively working as a farmer  The number of wild elephant attacks organization have been able to get the has been reduced, thus electric relevant authorities to establish the fences were an effective mitigation electric fence, which they consider a strategy significant achievement in mitigating wild elephant problems Kawantissapura  Around 3 houses were damaged by  Compensation for lost damages to houses (# Households: 575) elephants over the last month. is provided to only those who have legal There is an increasing trend of the ownership to the land incidents of wild elephant attacks  Compensation for crop damages is  Establishment of the electric fence provided only if they have been insured around YNP has not made a (very few purchase insurance) significant difference to mitigate the  For property damages the maximum problem in this division amount paid was Rs. 10,000, whereas for  At present villagers use firecrackers lost lives, it is Rs. 50,000 (“ali wedi�) (people do not have much knowledge on how to use them), lighting up fire and shouting to chase away the elephants  Currently there is no community level mechanism to address the problem other than informing the DWLC Ranakeliya  There are areas which are not  So far, no compensation has been (# Households: 316) covered by the electric fence, received by those who were affected by especially along the roadside areas, wild elephant problems and a few elephants can be seen in those areas. In addition, maintenance of the electric fence is not conducted properly  The elephant problem is now aggravated and is causing damages to lives, livelihoods and properties. There has been one killing by wild elephants in the last three years  Chasing away the elephants is the only means at present to reduce this problem  Two to three households have established electric fences 73 Assistance to mitigate wild elephant GN Division Wild elephant problems problems Weerahela  The wild elephant problems are (# Households: 625) very prominent during the Yala season. A few elephants can be seen outside the electric fence, and there are significant impacts on cultivation in the Weerahela area. For other villages this is not a significant issue Source: World Bank Livelihoods Survey - Focus Group Discussions (2008) Opinions from local communities The focus group sessions also revealed several ideas and issues towards greater benefits sharing of tourism. The opinions during these group sessions echoed what was found above, that only relatively few derive any significant income from tourist-related activities (Table A3.3). Even still, the suggestions appear to be relatively modest in their potential impact and in some cases lack any real innovative appeal in meeting the challenge. Several suggestions revolve around the selling of handicrafts and/or products that can be derived from park resources. The potential revenue from these types of activities tends to be very low and not unique enough to attract tourists to road-side stands. However, these sorts of activities are not completely without merit if complemented with interventions that would capture the higher rungs of the value chain. For example, if one were to invest in building accommodation facilities, this could be complemented with specific supporting services around it, such as restaurants, handicraft shops and so forth. 74 Table A3.3 Community opinions during the focus group sessions Ways of improving Suggestions to improve GN Division Benefits from tourism activities economic benefits from YNP livelihood aspects of villagers Kirinda  4 households provide  Establishing marketing places to sell  Creating marketing facilities, especially (# Households: 924) accommodation handicrafts and food to tourists those around Yala junction to sell the handicrafts  3 - 4 individuals in the division who come to visit YNP made by the villagers was suggested. Around working as tourist guides  Creating opportunities to work as 30 individuals have received required  4 safari jeep owners laborers in maintaining YNP buildings training and are capable of carrying out a  A few households sell handicrafts and roads during the periods where it is successful business out of that knowledge made of sea shells, cadjan leaves and closed for tourists (August – September)  In order to retain the tourists in the village, it beeralu is necessary to have accommodation facilities. Investing on construction of tourist hotels in the area is appropriate. This would create more employment opportunities with the division  The villagers highlight the need to create linkages between the tourists and the villagers. However there are mixed perceptions towards the development community tourism among the villagers Kawantissapura  There are few individuals working  It seems that villagers do not have an (# Households: 575) in safari jeeps and about 7 idea on the possible benefits that could households providing be reaped through improved tourism. accommodation facilities for Few people suggested that building pilgrims accommodation facilities near the lake as a good option Ranakeliya  Around 6 individuals in the division  The main road to YNP passes through the (# Households: 316) work in the tourist hotels owned by division. If tourism is promoted, the outsiders villagers can benefit by means of selling handicrafts to tourists (a place to sell products has to be established), working as guides and hiring out safari jeeps. Weerahela  At present none of the villagers are  Villagers suggest that they can benefit if  Villagers expect that developments in (# Households: 625) benefiting from tourism and there accommodation facilities for pilgrims are tourism in YNP and tourism facilities in the are no tourism facilities in the developed. In addition, establishing a division would be important in providing division either marketing center to sell the handicrafts employment opportunities and retain the 75 Ways of improving Suggestions to improve GN Division Benefits from tourism activities economic benefits from YNP livelihood aspects of villagers to tourists would serve as a good income out-migration of youth for employment source, especially for women Source: World Bank Livelihoods Survey - Focus Group Discussions (2008) 76