The Global Economy in August

The highlight during the month of August was the growing tensions and uncertainty created by North Korea’s aggressive actions; threatening the US pacific territory of Guam, firing a missile over Japan and carrying out its sixth nuclear test – claimed to be a hydrogen bomb. Their actions were met by President Trump’s rhetoric when he threatened North Korea with “fire and fury”.

The rising tensions caused major stock markets to dip while there was increased demand for ‘Safe Haven’ assets like the Yen and Gold. However, markets as a whole have not moved dramatically. As some analysts put it, markets cannot price in an existential situation like a North Korea focused nuclear exchange.

According to the Institute of International Finance (IIF), emerging markets have seen a slowdown in capital flows during August with a $4bn drop from the previous month and the lowest since January. IIF earlier said that while EM investors continue to take on credit risk in search for yield, they appear to have turned slightly negative on EM currency risk despite recent U.S. dollar weakness. US dollar weakness has allowed most EM currencies to appreciate vis-à-vis the dollar.

The search for yield in fixed income assets has seen Tajikistan issuing its first ever international dollar bond with a yield of 7.125%, while the yield on Mongolia’s 2021 dollar bond dropped below 6%. This risk appetite continues even as certain bearish market commentators see EM trades as being crowded and due for a correction.

Markets also focused on the minutes of the US Federal Reserve meeting, which showed that there was disagreement on whether the weak inflation was transitory or not. While some officials claimed that the inflation numbers do not support further rate hikes, others, including the Chairperson, insisted on its transitory nature. September 6th saw the Fed Vice Chair, Stanley Fischer, resigning – effective from mid-October – due to ‘personal reasons’ and increasing the empty seats on the Board of Governors to four.

Brent crude oil prices stayed above the $50 a barrel mark during the month and was majorly affected by three factors. First, prices reduced early in the month as the July OPEC output reached record highs. Second, prices were helped up by supply disruptions in Libya and drops in US stockpiles. Finally, the end of the month saw Hurricane Harvey creating an interesting situation. Despite affecting US oil infrastructure in Texas, crude oil prices reduced due to the reduced demand for crude as refineries shutdown.

The Global Economy in July

July began with a scare of a potential selloff  in emerging market (EM) assets. This was triggered by talk of developed market Central Banks starting to end the era of monetary easing. Alongside the US Federal Reserve’s interest rate hikes and balance sheet unwinding, the Canadian central bank raised rates and the European Central Bank signaled willingness to consider changes to its bond buying program. However, the switch in market sentiment was short lived thanks to Fed Chairwoman Janet Yellen’s dovish statements in her testimony to the US Congress. The outflows reversed and the Institute of International Finance (IIF) reported $20 billion in portfolio inflows to EMs in July.

To some market commentators the episode of EM weakness signaled that international investors were ready to let go of their EM debt investments as soon as global markets wobble. This has prompted fund managers to be cautious of their investments especially in terms of market liquidity giving them space to exit. However, analysts saw the episode as a short period of time in which asset prices adjusted to reflect the hawkishness of developed market central banks.

While Emerging Markets were helped by a weakening US dollar, developed markets were helped by an improving Eurozone economy. In the IMF’s July World Economic Outlook report, it highlighted that global growth in 2017 was being driven by the EU alongside Japan and China. In the meantime it also downgraded US growth outlook slightly, citing the failure of the Trump administration to deliver on its promised fiscal stimulus. The IMF also indicated that the US dollar and British pound were overvalued, relative to fundamentals, while the euro, yen and yuan are seen as being in line with fundamentals.

Brent oil prices made gains in July and increased above the $50 mark reaching $52.65 on July 31st. This was largely driven by higher US demand and reductions in crude oil stockpiles in the US. It was also helped by outcomes of a meeting among major oil producers in St. Petersburg on the 24th, where Nigeria agreed to cap its output and Saudi indicated limits to their exports. But the gains were capped by high OPEC production, primarily due to Libyan and Nigerian output.

Snapshot of the Economy – July 2017

At Frontier, we love trying out new ways to help our audience make sense of the economy.

Here’s a quick look at how key economic indicators are performing so far in the year, with an easy-to-understand snapshot.

For this update we have chosen the variables we consider to be most important in understanding the health of the Sri Lankan economy.

*Please note this does not indicate our outlook on each of these variables, but provides our understanding of how it has been performing based on the latest available data.

The key to understanding their performance:

    Improving

   Manageable

   Worsening

 

Gross Official Reserves: Stable at US$6.9bn levels in June following inflows from the sovereign issue

Trade deficit: Imports growing at a faster pace than exports in the Jan to May period

Foreign holdings: Consistent inflows slowly trickling in; Rs. 40 bn inflows from mid-Feb to end-June

Global situation: Positive for EMs and FMs

USD/LKR: Gradual depreciation

 

Credit to private sector: Rs.300 bn absolute growth during the first half of 2017, despite YOY slowdown

Inflation: Easing from record-highs despite sustained supply side pressures

 

If you want a look at the underlying numbers on each of these variables, please click here

Tourism Insights – Interview transcripts


Topic: Outlook for the Tourism Sector

Video Link – https://www.youtube.com/watch?v=mMnm0UbMasg

Speaker: Travis Gomez

Video length – 14:54 mins

0.30:      How was the tourism sectors performance in 2016?

  • Tourist arrivals close to 2.05 mn which was below government target
  • This was partly due to extraordinary events during the year such as flooding as well as slowdown in arrivals from Middle Eastern markets towards the 2H of the year
  • Nevertheless 2H2016 showed strong tourism growth of 12% YoY

1:30:      More Recent performance

  • A slowdown in arrivals was anticipated given the runway work taking place at the International airport
  • As a result growth in arrivals Slowdown in 3% in 1Q2017
  • But this was not as bad as was expected by hotel operators who expected a much greater slowdown

2:00 New developments in tourist arrivals

  • Composition of tourist arrivals shifting from traditional markets such as German, France towards Asian Markets
  • The Asian region accounts for 47% of tourist arrivals
  • India and China are the top two source markets for tourism to Sri Lanka
  • Shift in global spending power and the greater wiliness of tourists from China to travel further afield may account for this trend

4:00 Why are tourists spending less time in Colombo?

  • Foreign guest nights in Sri Lanka is 10 nights which has been fairly stable for 5 years
  • In contrast the foreign guest nights in Colombo is only 2.1 nights and has been slightly trending down over the same period
  • One possible reason is there is less of a need to spend time in Colombo for transit purposes (ie: getting to and from the airport) with the opening up of expressways to other parts of the Island
  • Another reason is that Colombo is not perceived as a tourist destination
  • This maybe due to a lack of awareness and a lack of marketing on the experiences and unique landmarks that can be visited and experienced in Colombo

6:20 How do we attract the high end tourists?

  • Tourism spending has grown from USD 89 per day 5-7 years ago to USD 160
  • This will naturally increase further due to the shift in the tourism mix to regional markets where tourists from these regions have a higher propensity to spend on things such as shopping
  • But In order to increase this even further, the focus should be on attracting more MICE tourists who typically have a higher spending power.
  • To attract more MICE tourists the general attractiveness of Colombo must be increased
  • In order to attract organizers of MICE events to pick Sri Lanka as a destination, there must be sufficient activities in Colombo to attract these tourists as they have limited time to spend in a country.

8:30 How to position Sri Lanka beyond a Sun & Sand destination?

  • The preferences of tourists are now shifting towards experiential/ adventure tourism
  • While the pristine beaches and natural beauty is a big draw for tourists, focusing exclusively on the resort aspect is not enough
  • If we want to tourists to spend a longer time in the country and encourage repeat visitors, we need to package Sri Lanka as having a multitude of attractions

9:45 Do we have enough capacity to accommodate higher tourist arrivals?

  • Don’t really see a problem on the supply side as many hotels and supplementary establishments are commencing operations
  • In Colombo alone around 1000 new rooms are going to be added in the next two years
  • It’s going to be a much more competitive environment as well with the entry of International hotel chains
  • Local hotel operators in Colombo would have to pa attention to these developments carefully as City Hotels have typically been the best performing category of hotels due to their ability to attract both foreign and domestic visitors.

Tourism Insights – Experiential tourisms – Part 2: Is it something worth worrying about?

In this second part of our review of the potential for experiential tourism in Sri Lanka, we investigate the tourism earnings from experiential tourism and ask the question as to whether promoting experiential tourism should be a focus for the tourism strategy of Sri Lanka.

What the Data has to say

Again, turning to the data provided by the SLTDA’s in its latest annual report, here are a couple of interesting insights we discovered from the data:

Earnings growth from Experiential Tourism negligible

The earnings growth from experiential tourism related activities has historically shown a tendency to lag the overall earnings from tourism. As a result, the contribution of experiential tourism to overall earnings has been on a declining trend and by 2015, its contribution was less than 1% of total earnings. However, in 2016 there was a significant jump in tourist arrivals for such activities which contributed towards a 78% growth in earnings from such activities. This led to an increase in its contribution to 1.2% of total tourist earnings.

 

Sigiriya outpaces other attractions in terms of its earning potential

As we observed earlier with tourist arrivals, where the lion share of arrivals was accounted for by a few sites (Sigiriya and Polonnaruwa in the case of Cultural sites and Yala, Horton Plains and Udawalawa in the case of wildlife parks), a similar trend can be observed with regard to foreign tourist earnings at these sites.

Hence, Sigiriya which accounts for the highest number of foreign tourist arrivals also brought in LKR 2.2 bn in earnings from the foreign tourists, outpacing most other attractions.

 

But Earnings per tourist is highest for Anurahapura historical sites

Considering the tourist earnings from a per visitor point of view also reveals some interesting insights in terms of the earnings trends of varied attractions.  With regard to attractions in the cultural triangle, it is Interesting to note that while Sigiriya attracts more visitors than Anuradhapura (in 2016 Sigiriya attracted 562 k visitors vs. 77k visitors to Anuradhapura) the per tourist earnings is higher for the latter and in 2015 & 2016 it was the highest when compared with all other attractions.

With regard to nature based attractions, the earnings per tourist at Pinnawala has been fairly unchanged while some of the Wildlife parks have witnessed a moderate improvement. The Colombo Museum too has witnessed some improved earnings though it remains at a much lower level compared to other attractions.

 

 

The role of pricing in earnings

This also brings up the question as to whether some of these attractions are priced optimally. A comparison of the significant attractions in Sri Lanka reveal that Sigiriya which is the most recognized and distinct site in Sri Lanka commands a premium which may partly account for it recording the highest tourist earnings. In contrast, the Colombo National Museum is amongst he most affordable attraction.

Source: Leisure Tours

 

Source: Leisure Tours, attraction websites

Key Question: Should we focus on promoting experiential tourism given the low returns?

Hotel Operators claim that for the vast majority of tourists to Sri Lanka, the main appeal is the Sandy Beaches and tropical climate. Some veterans in the hotel industry have therefore claimed that given this factor, tourism in Sri Lanka should be promoted in accordance with this and be geared towards attracting “Sun, Sand and Beach” tourists. Hence they raise the question of the return on investment in promoting attractions such as heritage, wildlife, nature reserves etc. that fall under the purview of experiential tourism, particularly given the low returns in terms of tourism earnings arising from such activities.

However, we would argue that while the pristine beaches of Sri Lanka maybe the main draw for visitors to the country, if the government is to achieve its objective of increasing the foreign guest nights and the daily tourism expenditure, there needs to be a greater focus on experiential tourism in order to encourage repeat visitors. A recent panel discussion organized by the Hotel association of Sri Lanka highlighted the fact that increasing the number of guest nights in Colombo by even a single day through the promotion of more activities/ points of interest in Colombo can have a significant impact on the earnings from tourism.

In addition, given that most of these sites such as Sigiriya, Yala, Pinnawala that draw many tourists are not contemporary attractions but rather ancient ruins or nature based resources, there is a much greater need to invest in the conservation of these resources. Hence part of the motive for enhancing the earnings potential of such sites should be to better conserve the sites thus ensuring its sustainability for future generations.

Looking at it from a global perspective, we have compared the entry fees of some of the Sri Lankan attractions which are classified as UNESCO World Heritage sites with other similar attractions found abroad and we have observed that the earning potential of these sites are far greater than the current earnings of the attractions in Sri Lanka which indicates that there is greater potential to increase the earnings from these experiences.

Source: Travel & Leisure website

The Bottom line: So what can be done about it?

Taking into account the data that was highlighted with respect to the tourist arrivals and earnings of experiential tourism in Sri Lanka, the key challenge therefore would be to increase the attractiveness and earnings potential of these attractions while avoiding the problems of overcrowding.

Promote more sites to reduce overcrowding at popular sites

It is clear that part of the reason for the overcrowding is that tourists tend to congregate in few locations leading to overcrowding. While from the tourist’s point of view it would be rational for them to focus on the “main attractions” given the limited time, overcrowding at these locations could result in diminishing the experience and attractiveness of a location.  Hence, there is a need to broad base the appeal of attractions that tend to get overlooked in order to reduce overcrowding and facilitate the development of other sites.

Limit number of visitors to enhance earnings

At the same time, in the case of attractions such as the Wildlife parks, Sigiriya rock where there would be stricter limits on the optimal carrying capacity of a location, tighter measures may have to be followed in order to ensure the long term sustainability of such locations. By the use of systems such as timed entry tickets, day/night time entry as well as having a cap on the maximum number of tourists that can visit the site during a day, you can better ensure that the resources of the site are not overtaxed while providing a more pleasant experience for the tourists that visit the site. This would also enable popular sites to possible charge higher entry rates and thus improve the earnings potential.

Improve the accessibility of attractions to limit overcrowding

Incremental investments can be made at selected attractions in order to improve the accessibility of certain sites to accommodate a larger volume and variety of tourists. For example, installing more ticket counters and restroom facilities can reduce the waiting times at attractions which is a key challenge at many locations. In addition, in the case of historical sites such as Anuradhapura and Pollonaruwa, low cost strategies such as having a designated route for tourists to take can greatly improve the flow of visitors and minimize overcrowding.

Create more activities at a given attraction

Incremental developments can be made at certain attractions in order to increase the variety of activities that can be found at the location in order to reduce overcrowding. For example, a lot of the overcrowding in Sigiriya happens at the Lion’s paws where everyone makes a beeline to climb the rock. Instead of restricting the experience of Sigiriya to simply climbing a rock, it can be broadened to include tours of the water gardens and the ancient town, an interactive museum. Walks through the nature reserves surrounding the rock which are filled with wildlife and birds and has the potential for bird watching activities. This would also help improve earnings of a given site as most comparable attractions abroad charge combined ticket prices which gives full access to varied sites in a given location.

 

Written by :Travis Gomez
For any queries and comments contact travis@frontiergroup.info
Disclaimer:
This information has been compiled from sources believed to be reliable but Frontier Research Private Limited does not warrant its completeness or accuracy. Opinions and estimates constitute our judgment as of the date of the material and are subject to change without notice.

Tourism Insights – Experiential Tourism – Part 1: too little or too much of a good thing?

The changing face of tourism in Sri Lanka

Sri Lanka has been experiencing double digit growth in tourist arrivals with over 2 mn tourists visiting the country in 2016. With a target of 2.5 mn arrivals for this year, and a target of over 4.5 mn arrivals by 2020 set by the government, the direction of the government as well as the private sector is that, more is better. At the same time, there has been growing concern with regard to the problem of overcrowding at certain popular tourist attractions in the Island. There have been reports of overcrowding in Sigiriya as well as traffic jams in Yala Wildlife park leading to even animals getting run over (Read More: Daily Mirror). While this has sparked a debate within the industry on what is the optimal balance of tourist arrivals, the overcrowding at some of these cultural and natural attractions indicates a growing interest in what can be termed as “Experiential tourism”

The rise of Experiential tourism

Since independence, the traditional markets of tourist arrivals to Sri Lanka were from Europe (including countries such as Germany, France and UK) where the main attraction of Sri Lanka; as veteran’s in the hospitality Industry would put it; is “Sun, Sand and Beach”. More recently, a shift in consumer preferences is noted with the change in economic circumstances which has led to a growth in arrivals from non-traditional markets led by tourists from India and China, along with growing awareness amongst visitors of the environmental impacts of tourism and the need for sustainability and conservation.  While “sun, sand and Beach” remains a core component of Sri Lanka’s offerings, the above reasons have led to a widening of Sri Lanka’s offerings to include more experiential and culturally rewarding tourist attractions. This could range from taking curated walks in a city’s historic centre, camping outdoors in a bird sanctuary, visiting museums, art galleries etc. to get a sense of the culture of the destination. The Sri Lanka Tourism Development Authority’s (SLTDA) annual report, classifies a number of tourism activities in Sri Lanka as Museums, Wildlife Parks, Zoological & Botanical gardens and the cultural triangle. For the purpose of this analysis, we have treated all of these activities as being part of “Experiential Tourism”.

What the data has to say

Based on the data provided by the SLTDA, here are a couple of interesting insights we noted:

Faster growth in experiential tourists in 2016

The experiential tourist arrivals grew at a rate of 48% YoY in 2016, outpacing overall tourist arrivals growth which increased at a rate 14% over the same period. Visitors to the cultural triangle alone saw a 2.5x growth from 355 k tourists in 2015 to 905k in 2016.

 

But less than 50% of foreign tourists choose to go for experiential tourism.

While 2016 saw a strong growth in experiential tourism, in the context of total tourist arrivals which stood at 2.05 mn in 2016, the attractiveness of even popular locations is comparatively low. Sigiriya was the most popular attractions with a little over 1/4th of total tourist arrivals in Sri Lanka visiting the site while Yala was the most popular wildlife park attracting 13% of tourists.

 

Wildlife parks gaining popularity

The proportion of experiential tourists visiting popular wildlife parks such Yala, Horton Plains which are in a natural setting has increased while the number visiting places with “Built-in environments” such as the Pinnawala Elephant Orphanage, the Dehiwela Zoo and the Peradeniya and Hakgala Botanical gardens have witnessed a slower pace of growth and hence a decline in their relative share.

 

Few sites/activities account for the lion share of the tourist arrivals

In 2016, the two sites; Sigiriya and Polonnaruwa had accounted for nearly 90% of all visitors to the cultural triangle . With respect to Wildlife Parks, nearly 70% of arrivals were distributed among 3 parks while there are 23 locations throughout the island that have been identified by the SLTDA as Wildlife parks. This trend highlights the fact that tourism in Sri Lanka is not sufficiently broad based and to a certain extent explains the issue of overcrowding which takes place at certain popular locations.

Key Question: Is there already too many tourists?

It is clear from the above data that while experiential tourism is has not been as significant in the past, the trend is clearly that it is growing in importance and is expected to continue to do so in the future. Hence a question that can be raised is if given the overcrowding that is taking place at some of these attractions, should attempts be made to restrict tourist arrivals.

To provide some context to this question, we did a global comparison of the tourist arrivals numbers of some of Sri Lanka’s UNESCO world Heritage Sites with some other similar attractions found abroad and we observe that these sites are able to accommodate much larger volumes of annual tourist arrivals.

 

Source: Travel & Leisure website

 

Hence, we believe that with proper planning and by increasing accessibility it is possible to increase the popularity of experiential tourism attractions in Sri Lanka while limiting the negative impacts of overcrowding.

 

In part 2 we will explore the earnings contribution of experiential tourism and give our recommendations on what can be done to enhance experiential tourism in Sri Lanka

Click here to continue to Tourism-insights – experiential tourism Part 2    

 

Disclaimer:
This information has been compiled from sources believed to be reliable but Frontier Research Private Limited does not warrant its completeness or accuracy. Opinions and estimates constitute our judgment as of the date of the material and are subject to change without notice.

The Global Economy in June

The major highlights of the month of June were the events that unfolded around the isolation of Qatar by its Gulf neighbors, developments in the oil market and signs that major central banks were beginning to end monetary easing. Despite these developments, global markets continued the upward trend even as analysts continued to raise questions about its sustainability.

The US Federal Reserve hiked interest rates, as expected, on June 14th for the second time this year and signaled that it will start to unwind its massive balance sheet. However, doubts have been raised whether the Fed will go for a third rate hike this year amidst US economic data falling below expectations in the second quarter. Taking cues from the Fed, the European Central Bank (ECB) and the Bank of England have also signaled that they will begin to end the era of easy money. Emerging Market investors are watching this development closely to see how it affects risk appetite.

Emerging markets continued to see positive investor sentiment, as reflected by a seventh consecutive month of foreign portfolio inflows, up to June. According to the Institute of International Finance (IIF), June saw US$17.8 billion in inflows to EM debt and equities, the majority of which went to the Asian region. Volatility in commodity prices, especially oil, did not appear to trouble EM equities. Analysts have pointed to increasing weight of technology shares relative to commodities-based shares in the MSCI Emerging Markets Index as making this possible. However, some have pointed to robust demand for debt from Russia, Argentina and Ivory Coast as evidence of an investment bubble in high yielding EM assets.

China’s A-shares were finally able to gain entry to the MSCI Emerging Markets Index, from next year. China also opened up its US$9 trillion debt market to foreign fund managers through its new ‘Bond Connect’ service through Hong Kong. Meanwhile, India finally put into force its new Goods and Services Tax (GST) on the 30th of June, promising to simplify the country’s tax regime.

In Europe, Brexit negotiations got underway, while Prime Minister May managed to come to an official agreement with the coalition partner from Northern Ireland. The coalition gives her government a slim majority in parliament. Despite some stability in the parliament, the British economy showed signs of trouble as consumer spending dipped considerably for the first time since Brexit. The Sterling pound also continued to remain weak.

Brent oil prices were rather volatile in June, seeing a drop to the mid-US$40s on fears of a rising supply glut amidst increased OPEC output in May. Despite an OPEC agreement to limit production, the countries excused from it – mainly Nigeria and Libya – have continued to increase output. However, as of the first week of July, prices saw seven consecutive days of gains, rising to near US$50 due to a slowdown in the growth of the US shale oil sector, reduction in US crude oil reserves.  But analysts do not see any support from fundamentals for a sustained rise, reflected in the sharp drop seen on July 5th to US$47.79 a barrel.

The situation over Qatar’s isolation by its Arab neighbors did not have a major impact on oil prices. While the risks of the escalation seem to have reduced, analysts say the crisis is likely to be protracted in its current form. The Saudi-led coalition sent a list of 13-demands, which included ending relations with Iran and shutting down Al Jazeera. Despite Qatar’s rejection of these demands, the Saudi-led coalition have not yet taken any retaliatory measures, raising hopes of the tensions gradually easing out.

The Global Economy in May

The month of May was characterized by political risks affecting markets. Scandals over Russian involvement in the Presidential election and the removal of the FBI director affected the Trump administration, with some politicians even invoking calls for impeachment of President Trump. However, major US equity benchmarks continued their upward movement with only minor impact from the political scandals. Some argue that this is because the ‘Trump Trade’ has been replaced by a liquidity trade fueled by rising inequality and higher profits for firms.

Amidst its usual political uncertainty, emerging markets continued their positive run so far this year, raking in over $20 billion in non-resident portfolio inflows for a third consecutive month in May according data from the Institute for International Finance (IIF). Data from IIF and Dealogic point to over $100 billion in such inflows so far in 2017, driven by nearly $100 billion in sovereign debt issuance by EM countries in the period. EMs were, however, affected by Moody’s downgrading of China’s sovereign credit rating and the fresh political scandals affecting Brazil’s President Temer. Analysts have begun to throw into doubt the sustainability of the EM’s bullish run, citing high valuations of equities and the upcoming US interest rate hikes. In the meantime, Frontier Markets seem to have gained investor interest in the first few months of the year, with increased fund inflows, fueled by political uncertainties elsewhere.

In Europe, markets did celebrate the victory of Emmanuel Macron over the populist Marine Le pen, but now the question remains how he will use a probable parliamentary majority to push through his ambitious reform promises. It is a question well highlighted by the delays facing President Trump’s reform agenda, despite having a republican majority. However, Europe continued to face a number of uncertainties, including the continuation of the European Central Bank’s debt buying program, overcoming Italy’s banking sector problems and finding a suitable compromise with the Greek government on its debt repayments.

But after the June 8th general elections, the future of the Brexit negotiations in the context of a hung parliament in Britain is going to be a major uncertainty. The Conservative Party’s coalition partner, the Democratic Unionist Party (DUP) from Northern Ireland, is likely to push for a ‘softer’ Brexit. The situation is also likely to make the Sterling Pound volatile, after losing  its gains over the last two months on election night.

Oil prices reduced from its mid-$50s height to below $50 during the month due to doubt over the OPEC’s production limitation agreement. Prices did rise as the agreement’s extension to March 2018 came to being, but the market was not impressed by it. Analysts were concerned that oil markets are headed for a supply glut despite the OPEC agreement. Prices have dipped below the $50 mark by early June, helped by the isolation of Qatar by Gulf states led by Saudi Arabia, which could unravel the OPEC agreement.

The Frontier Fitness Week

It’s been just over a year since we started our Fitness Initiative (which you can read about here). How did we do so far?

Well, in a word, meh.

Wait, let us explain…

Initially, team members were encouraged to start activities that contributed to their fitness and they did! Several team members joined gyms, took up yoga or just started walking more.

Day 2: We went Cycling/Running

But we believe that no one likes to be forced to do something they don’t want to do and when they are the results are, generally, not great.

So, we put it to the team. We asked each team member if they’d like to “opt-in” for our fitness initiative and this worked out better than expected – only one team member opted out.

 

Working together vs. working alone

Things were moving (get it?), just not enough – and we think we figured out why.

Yes, all team members were encouraged to start some fitness activity individually, but that takes a lot of motivation and effort. We decided to try out group activities, where the team could share each other’s motivation and get moving! (A little bit of friendly competition didn’t hurt either!)

Day 3: More Badminton!

We started small, scheduling weekly walks/runs (again, attendance was voluntary). While motivation was lacking, we figured what you won’t do for yourself, you will do for others. In that light, we asked the team to use our weekly walks as “training” for an upcoming charity run.

This worked out initially, but attendance waned after the charity run passed. We realized that walking wasn’t the kind of exciting “sport” that had people raring to go each week. So, we decided to get a few more options by calling for suggestions from the team. After too many a few anonymous internal surveys, we had a list of activities that the team would like – ranging from badminton and football to cycling and Zumba.

 

Day 4: Because no one wanted to take pictures at Zumba

Enter the Frontier Fitness week.

We decided to try a few of these activities, over the course of a week, during the holiday period in April. As an incentive, we decided to treat all qualifying team members to an unhealthy pizza extravaganza a dinner at the Hilton and with a walk around the Colombo Fort area. How do you qualify? Well, here were the rules:

  1. There will be 5 core activities. Team members need to attend at least 2 of these to qualify.
  2. If at least 3 team members attend all 5 (only one of us did), they would get another treat.
  3. Team members are free to organize their own activities as well.
  4. Each activity needs a minimum of 3 team members to qualify.

Overall, the fitness week was a success!

We played badminton on two days, went cycling, took yet another walk and even tried Zumba! Badminton took the cake, in terms of attendance, but cycling and Zumba were rather popular as well.

Day 5: Rounding it out with a jog!

The fitness week gave us a better understanding of the types of activities the team prefers and has really helped us plan out our future fitness activities (we’ve sprinkled in a few Badminton games amidst all the walking now – #progress).

 

Health is more than just exercise!

We also broadened our vision from just fitness/exercise to overall health. In that respect, we partnered up with Hemas. In case you haven’t heard, Hemas recently released an online “Wellness” platform – offering everything from medical checkups to activity tracking on one platform, with a monthly subscription. We’ve been using the said platform for a few months now and, while the activity tracking hasn’t kicked off with us, we recently concluded our first medical checkup through the platform and came away rather satisfied.

 

That’s it for now. Stay tuned for our next update on the Frontier Fitness Initiative!

 

The Global Economy in April

April was characterized by geopolitical tension triggered by tensions between the US and North Korea as well as in the Middle East. Following the chemical weapons attack which killed dozens of people in Syria, the US launched an airstrike on the country in early April. This put a strain on Russian-American relations as Russia denounced President Trump’s decision to use force in Syria. The following week the US dropped its most powerful non-nuclear bomb targeting an ISIS controlled area in Afghanistan.

Tensions between the US and North Korea escalated during the month with the latter launching ballistic missiles twice. Even though both missile launches failed, it was viewed as a “provocative action” by the country. This led the US to retaliate by taking steps to increase its military presence in the region including staging large military drills with South Korea and Japan. These military interactions in the region caused tensions to rise between China and South Korea as well with China objecting to the deployment of an anti-missile system in South Korea by the US.

Concerns over global trade arose after the Trump administration announced the draft of an executive order withdrawing the US from NAFTA (North Amercian Free Trade Agreement) and after President Trump threatened to renegotiate or terminate the free trade deal with South Korea. However, the administration backed down on its decision to withdraw from NAFTA and later announced that it would look to renegotiate the deal.

In the UK, Prime Minister Theresa May announced an early general election to be held in June this year – 3 years before it is due. Analysts point out that this is a step taken by the PM to ensure strong parliamentary support in the Brexit negotiation process.

The geopolitical tensions in the Middle East buoyed oil prices in the first half of the month. However, increasing US oil production and doubts over an extension of OPEC production cuts weighed on prices in the second half.