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The new Tourism Act: Sri Lanka to follow global best practices  

19 Apr 2021

  • New Act similar to that of Singapore and Malaysia 

  • Merger was a proposal of 2020 Budget 

  The proposed new Tourism Act which would merge the main three tourism authorities in the country would be in line with global best practices, similar to Singapore and Malaysia, according to Sri Lanka Tourism Development Authority Chairperson Kimarli Fernando.  “The new act would be in line with the global best practices including Singapore which has one organisation which had 19.1 million tourist arrivals in 2019 and Malaysia which had 26.1 million tourist arrivals in 2019,” Fernando stated.  The Singapore Tourism Board (STB) incorporates a simple organisational structure segregated into six sections of management ranging from Marketing, Policy, and Planning Group, Corporate Group, Experience Development Board, International Board and Technology Group as opposed to the four segregated Sri Lankan Tourism institutions.  Tourism Malaysia also incorporates a simple organisational chart which is similar to the aforementioned organisational chart of STB, and Malaysia Tourism Quality Assurance (MyTQA) is the initiative of the Malaysian Ministry of Tourism and Culture to improve the quality of service and facilities for tourism products in Malaysia.  Fernando further stated that the new Tourism Act will incorporate an independent source of funding. The main income of tourism authorities is from the Embarkation Tax and Tourism Development Levy (TDL).  “Embarkation tax is paid by all arrivals including arrivals that came with booking on OTA’s,” Fernando noted.  Moreover, the source of independent funding for merged tourism institutes will be maintained by an industry consultative committee which SLTDA described to be the voice of the complete industry.  Fernando highlighted the pivotal need to merge the four segregated tourism institutions along with providing a rundown of the solutions that the new Tourism Act can provide.  “Merging the tourism institutions was in the National Budget in 2020 and the cabinet paper was thereafter approved,” added Fernando.  She further listed the aforementioned merge which is in line with the President’s manifesto to streamline and reengineer processes and make the public service efficient as a secondary factor that was motivated to establish the act.  “Currently we only have a working document for the new Act which needs to be studied internally first and thereafter we will share with the complete industry and seek their feedback, to ensure what is enacted is good for Sri Lanka and Tourism,” Fernando further added.  She also noted that the Tourism Ministry Secretary S. Hettiarachchi wrote to all stakeholders requesting their feedback in November 2020 and only a few associations responded.  Fernando further dove into the history of previous governments attempting to merge the institutions as well. It was stated that due to change in management such as constant changes in chairpersons by having five chairpersons in five years, implementation of the merger was stalled.  “Soon after the 2005 Tourism Act, in 2006, a detailed report was done to merge the institutions. Thereafter consecutive governments have attempted to merge the institutions for good reasons,” she stated.  On another note, the challenges of the current structure of the country’s tourism institutions were highlighted with the current 36 board members of four institutions only generated or influenced 2.3 million tourist arrivals.  “The question needs to be raised besides representing their 200-300 members and enjoying board seats, what have they really achieved for the country and our citizens,” Fernando further noted. Another challenge involves too many tourists coming into the country via OTA’s such as Airbnb, Booking.com, Expedia, and Agoda which are recognised as the unregistered SME segment of the country.  With only 2500 odd hotels registered in Sri Lanka for over 20-30 years, the SLTDA Chairperson revealed that there are 20,000-30,000 unregistered tourism providers who are not supported at all and the lack of a safety net for SMEs.  She further revealed that the existing structure has failed to develop domestic tourism, failed to use digital promotions, failed to position Sri Lanka, and failed to reach the consumer but focused on going on travel shows spending nearly Rs. 1 billion in 2019 instead.


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