Tourism has long been presented as one of Sri Lanka’s economic pillars. It brings in foreign exchange, sustains livelihoods, and supports thousands of small businesses. But alongside its benefits, there is a set of problems that authorities have been slow to confront, despite years of complaints from local communities.
In several well-known tourist hotspots, a number of concerns keep resurfacing. These include tourists overstaying visas, foreign nationals operating businesses without proper approvals, and transactions conducted in foreign currencies in clear breach of regulations. Even more troubling are reports that Sri Lankans themselves are sometimes discouraged or denied access to certain establishments.
These are not minor irritations. They are issues of legality, fairness, and national dignity.
The standard response to visa overstays is familiar. Cases are referred to the Department of Immigration and Emigration. If an overstay is confirmed, the individual is fined or deported. Technically, the law has been enforced. Yet many locals see this as an inadequate response, particularly when the same individuals may also be running unregistered businesses or engaging in activities that violate multiple Sri Lankan laws.
A fine or deportation may address immigration violations. It does not necessarily address illegal commercial activity.
Sri Lanka’s economic reality complicates matters. The country is under constant pressure to earn foreign exchange, and tourism is one of the few sectors capable of delivering it quickly. In that context, authorities are often perceived as handling errant foreign visitors with unusual caution. The impression, rightly or wrongly, is that economic desperation has encouraged a degree of leniency.
There is also the issue of unfair competition. Sri Lankan entrepreneurs are required to obtain licences, register businesses, comply with tax obligations, and meet regulatory standards. When unapproved foreign-run operations function alongside them without similar burdens, the playing field is clearly uneven. Legitimate local businesses suffer.
Then there is the matter of foreign currency transactions. The Central Bank has repeatedly warned that conducting domestic transactions in foreign currencies outside permitted channels is illegal. These rules are in place to protect monetary stability and financial transparency.
None of this suggests that Sri Lanka should become hostile to tourists. On the contrary, tourism is vital. Visitors who respect local laws, culture, and communities are not the problem. The problem is the failure to act decisively when rules are broken.
Against this backdrop, the Ministry of Tourism’s announcement of sweeping reforms through a proposed new Tourism Act is both welcome and overdue.
Deputy Minister Prof. Ruwan Ranasinghe is correct in observing that the Tourism Act No. 38 of 2005 no longer reflects the realities of today’s industry. Tourism has changed dramatically over the past two decades. Digital platforms, remote work trends, and long-stay travel have blurred the lines between visitor and operator. The regulatory framework must keep pace.
Particularly significant is the proposal to empower tourism authorities to take direct action against illegal business activities, rather than relying solely on immigration procedures. At present, many cases involving foreigners running unapproved enterprises are effectively handled as visa issues. This approach is cumbersome and often fails to address the broader violations involved.
A clearer legal pathway could strengthen enforcement.
Equally important is the plan to bring the large informal tourism sector under regulatory oversight. The claim that only a small fraction of tourism-related service providers are formally registered highlights a structural weakness. An industry dominated by unregistered operators is vulnerable to tax losses, safety concerns, and reputational harm.
However, passing a new law is only the first step.
The real test will be implementation. Enforcement must be consistent, not selective. Regulations must be clear, not open to interpretation. Authorities must demonstrate that legality is not negotiable, regardless of who the offender may be.
Sri Lanka’s hospitality is one of its greatest strengths. But hospitality should never be confused with tolerance for illegality. A welcoming tourism environment depends on order, fairness, and mutual respect. Visitors benefit from it. Local communities depend on it.
If the new Tourism Act is used to close loopholes, protect legitimate businesses, and uphold the rule of law, it could help reset the balance. It could reassure Sri Lankans that their concerns are being taken seriously. It could also send a message to visitors that Sri Lanka remains open, but not indifferent.
Tourism can and must grow. But it cannot be allowed to grow at the expense of the law.