Sri Lanka’s tourism industry came to a screeching halt in early 2020, as the Covid-19 pandemic forced global borders to shut. The more than 400,000 people in Sri Lanka who work in the tourism industry were left in a lurch. Even after pandemic restrictions were lifted in late 2021, tourism, which contributed nearly 16% to the total foreign exchange earnings for Sri Lanka as recently as 2018, is still struggling to recover.
The collapse of the tourism sector has contributed to the island nation’s worst economic crisis since its independence in 1948. But the rise of a nascent tech sector, and the entrepreneurship around it, has helped many tourism employees and businesses stay afloat — and even thrive.
Virtual tourism combines technological concepts like augmented reality (AR), virtual reality (VR), and mixed reality (MR), to offer a travel experience without actually traveling to a place. The pandemic led to a virtual tourism surge, with companies like Airbnb allowing online experiences from across the world. People could see the northern lights in Iceland or join a cooking class in Jaipur from their homes. Tourism boards also launched virtual campaigns to keep future travelers interested in their destinations.
Dhanula Jayasinghe, a 32-year-old ranger at wildlife tour operator Leopard Trails, was out of work almost overnight when the pandemic started. He spent the first few weeks of lockdowns trying to figure out an alternative way of making a living close to Yala National Park, almost 300 kilometers south of Colombo. In May 2020, he started conducting virtual leopard safari tours on Airbnb for $14 a person or $100 for 10 people. “I had to talk about leopards and share their videos on Zoom, while also creating a safari-like background. It was a big challenge in the beginning, but I got used to it,” Jayasinghe, who has conducted nearly 600 online safaris so far, also told Rest of World.
In December 2021, Shenuka Hapugoda, a former IT consultant based in Colombo who was on a break when the pandemic hit, launched BA.LA.MU — a mobile app that offers audio guides and maps of popular attractions — to cash in on the virtual tourism uptick. Meanwhile, in May 2020, Foozoo Mantra, a bed and breakfast in Colombo, launched an online store to sell locally grown ingredients under the brand name Goodfolks, which is now available in the U.S. too.
The rise of such digital entrepreneurship is the result of years of gradual mainstreaming of technology, backed by public-private partnerships, venture capital investments, and private sector incubators, according to Nevindaree Premarathne, senior manager of startup ecosystem development at the government-run Information and Communication Technology Agency (ICTA).
“A crisis situation creates many opportunities, and we can see a lot of entrepreneurs coming up with new ideas to support the economic condition. Most young entrepreneurs now know how important it is to go global, and how it helps a country,” Premarathne told Rest of World. “Young people have realized that it’s easier to venture into this field [technology], as opposed to traditional businesses, as it provides scalability and the ability to be location-independent.”
Tech journalist Neville Lahiru says the country’s ongoing economic crisis may hinder the growth of the nascent tech industry there, as more and more professionals have started to migrate to foreign countries for better salaries and lifestyles. “Some of the bigger firms have tried to mitigate the situation by pegging salaries in foreign currencies, like USD or AUD. Unfortunately, not every tech firm can follow this approach, since a notable chunk of the sector operates almost exclusively locally,” Lahiru told Rest of World. In 2018, Sri Lanka had around 125,000 people employed in the information technology and business process management industry.
In 2021, there was an over 60% year-on-year increase in the total venture capital investment in Sri Lanka, which rose to $19.7 million, according to policy advisory and research firm Startup Genome. “There’s a rise in the number of startups launching in the last four years, especially among fresh graduates. The focus of startups in Sri Lanka has diversified significantly to newer avenues, such as clean tech, artificial intelligence, machine learning, gaming, and edtech,” Minuri Adasuriya, head of programs at Hatch, a leading local startup incubator, told Rest of World. Hatch has directly supported over tech 200 startups in the last three years, including the audio travel guide BA.LA.MU.
Tech entrepreneurship took its roots in Sri Lanka at the end of the country’s civil war in 2009, Premarathne said. For the following eight years, the island nation had only about 200 registered tech startups. In 2019, the government partnered with the private sector to launch Startup SL, a five-year program to boost startups. “Sri Lanka is a small country, where you would bump into someone you know at a meeting. But without credibility, it’s difficult for an aspiring entrepreneur to receive support or funding,” Premarathne said. “Through Startup SL, we connect entrepreneurs with one another and also with investors and accelerators, where they can receive guidance and funding for their projects.”
Nearly 400 startups were registered under this program in 2020, Premarathne said. Now, 712 tech startups have been registered under the program, and the goal is to have 1,000 startups covered by the program by 2024.
The trend is likely to continue, as Sri Lankans from more diverse backgrounds are now taking to entrepreneurship. In April, when ICTA invited applications for the latest edition of Spiralation, its six-month incubation program, they received interest from every province in the country. “We had fewer applications because of the current situation. Most people are frustrated and trying to find solutions for their day-to-day life. But we had applications from every province. We saw some new faces and innovative ideas that want to address the economic problems we have,” Premarathne said.
But as the current economic crisis unfolds, big companies have the luxury of setting up temporary offices in neighboring countries like India and Singapore, but small startups will find it difficult to operate. Lahiru fears that the situation could worsen over the coming months. “A continuously worsening economic crisis translates to rising scarcity in fuel, transportation, food, and connectivity problems, like electricity and internet. For the tech sector, this means even working from home or remote working — a move that many firms switched to during the pandemic — will become a near impossibility in the future,” he said.
Meanwhile, Jayasinghe is still talking about the elusive big cats on Airbnb. His company had a busy five-month period from December until early May, but it’s the off-season now, and Sri Lanka’s financial crisis is slowing tourist arrivals.
Since travel restrictions across the world eased, tourists are now leaning toward physical experiences, but virtual experiences are still popular as a team-building exercise for companies, Jayasinghe said. “More than the content, people expect friendly chit-chat, fun, and laugh,” he said. “My online leopard tour takes only about an hour, so I can fit it in during lunch hour or after work for additional income.”