Sri Lanka hotels profits may be squeezed by rising labour costs

Oct 30, 2013 (LBO) – Shortfalls of labour amid fast growth in Sri Lanka’s tourism sector may squeeze profits and undermine industry attempts to boost product quality, an official said. “We will seriously need to see how we can halt the current shortage of staff,” Jayantissa Kehelpannala, president of the Tourist Hotels Association of Sri Lanka said.

“As more hotels open, competition among hotel operators, workers seeking jobs overseas and lack of suitably trained employees will put enormous pressure and this could be the biggest challenge the hospitality industry may face.”

“Hotels will have to spend more money to on marketing to attract new workers and take on the cost of training them.”

Kehelpannala who was re-elected to head THASL for a second term said in addition to Sri Lanka Institute of Tourism and Hospitality Management, there was a need to attract more internationally accredited hotel schools to Sri Lanka.

“Unless this is done soon, having more hotels with a lack of experienced workers is bound to be a big squeeze on profitability for the industry.”

Higher domestic wages however may reduce the outflow of workers to countries with more stable exchange