The Sri Lanka Tourism Development Authority (SLTDA) is gearing up to improve the tourism sector, including the much-required infrastructure development, based on a 10-year plan that is due to kick off next year. 

Speaking to The Sunday Morning, SLTDA Chairman Priantha Fernando stated that the authority would take one step at a time towards developing the industry and the master plan would be a prominent step. 

“There are 46,000 rooms in Sri Lanka, which is a good number. Apart from that, we are anticipating Foreign Direct Investments (FDIs) as well. We will not be able to increase the arrival figures overnight. Infrastructure development has to be kept up in line with tourism demand. Arrivals need to be seen to tap into infrastructure development,” Fernando noted. 

He stated that if the supply was not parallel to tourism demand – with infrastructure development being the supply and tourist arrivals the demand – the stakeholders might lose financially.

However, he stated that the authority welcomed and encouraged FDIs specially in construction of hotels. According to him, such projects take a couple of years to be completed. Further, investments are also welcomed in the fields of entertainment and recreation.   

Fernando noted that in terms of the required number of rooms, the authorities would be adopting a cautious approach. 

According to official data, as of 2018, the total room inventory was 36,133. Classified tourist hotels (one to five star) had the highest inventory of 12,828 rooms. Colombo and Galle Districts recorded the highest number of rooms (over 7,000 rooms). 

The lowest number of rooms was recorded in Monaragala, Ratnapura, Kegalle, and Kurunegala Districts (less than 500 rooms). Out of 1,192 respondents, 60% of tourists rated the accommodation facilities as excellent and very good. Only 9% of tourists rated the quality of rooms as poor or very poor. 

However, Fernando stood firm by the existing infrastructure and stated that it was not ‘that bad’. 

“Infrastructure is not bad. The issue is entrance tickets are being increased without prior notice. We have plans to increase visa fees as well. Recently authorities enabled visa on arrival for Taiwanese as they are not known for overstaying. On the other hand, another issue is that foreigners are doing business illegally and this deprives the livelihoods of locals.”

Tourism is one of Sri Lanka’s top three foreign exchange earnings methods, the other two being worker remittances and exports. The export industry has been performing exceptionally well despite many external and internal setbacks. 

According to the data provided by the Export Development Bank (EDB), monthly export earnings have been surpassing the $ 1 billion mark consecutively now. Worker remittances, on the other hand, have been reflecting the lost confidence in the economy, with them dropping by over 40% Year-on-Year (YoY). 

Policy decisions taken by the Central Bank of Sri Lanka (CBSL) last year too affected this drop. Hence, hope of emerging from the economic crisis has been pinned on tourism and exports now. Tourism is in dire need of development as the country possesses immense potential to make tourism receipts. 

Tourism Development Levy 

The Tourism Development Levy is a popular levy in the industry. The Ministry of Tourism in consultation with the Ministry of Finance introduced the levy in September 2003 for the development and promotion of Sri Lanka tourism.

Fernando stated that the levy was directly linked to the tourists who were coming into the country and the money they spent. The levy of 1% is collected from SLTDA-registered establishments. For institutions having an annual turnover not exceeding Rs. 12 million or a quarterly turnover not exceeding Rs. 3 million, the levy is 0.5% on the turnover of such institutions.

“The Tourism Development Levy has decreased from what it was in 2018 and 2019. As a result, we had to cut down our promotional programmes and expenditure. A percentage of the levy gets distributed to poor establishments and SLTDA gets only 14%. A bulk of the collected funds – about 70% – goes to Sri Lanka Tourism Promotion Bureau (SLTPB) for promotional campaigns,” Fernando stated. 

Struggling to survive

Meanwhile, The Hotels Association of Sri Lanka (THASL) President M. Shanthikumar told The Sunday Morning that at present Sri Lanka tourism was merely surviving. 

“Arrivals have been very poor. The tourism industry is not doing great at the moment. Our focus is on promoting and getting tourists. It is only once we get tourists that we can talk about infrastructure. Most of the funding has to be done for promotions. While 1% is collected from the levy, we are not in a position to spend rupees due to low collection and dollars due to non-availability. However, we can engage in digital marketing,” he stated.

Speaking to The Sunday Morning, LIRNEasia Chair Prof. Rohan Samarajiva stated that when developing infrastructure for tourism, one had to categorise different kinds of tourism – group tourism, which Sri Lanka used to get in the old days, and free, independent travellers, who are looking for authentic experiences, and so on. 

“If you really want to get tourists, you need big hotels and highways for guests to reach tourist destinations. Once they get to the hotel, there is an ecosystem around the hotel. If you go back and look at the original Bentota complex, it was created when the country’s infrastructure was not in place. They carved an area, ensured electricity, and water was uninterrupted. A higher level of law and order was maintained here than in the rest of the country. We graduated from the zone hotels and now we expect hotels around the country,” Samarajiva explained. 

He added that Sri Lanka’s connectivity had been good as bookings could be made through websites and intermediaries such as booking.com. However, he suggested improvements to be done to connectivity, development of transport, and guidance.

Tourism goals

According to Tourism Minister Harin Fernando, Sri Lanka aims to attract nearly 1.5 million tourists in 2023, with the main focus being on 2024.

Speaking at a press conference held in Colombo recently, Fernando was hopeful that Sri Lanka’s tourism sector would grow over the next few months, with several airlines scheduled to fly into the island.

Fernando noted, however, that the ministry’s primary objective was to achieve roughly three million tourist visits in 2024 with the implementation of several new services, including ferries and railways operating in Sri Lanka.