Sri Lanka seen more expensive than rival tourist destinations

May 19, 2011 (LBO) - Sri Lanka appears to be priced at the top tier in hotel room rates compared to its regional rivals, a new report on the industry by Capital Alliance said. "However, there are a few key concerns that the industry should overcome to fully reap the benefits of the tourism boom. These include the challenge of attracting upscale tourists, tendency to attract short haul tourists, shortage of human capital and rising costs." On average, Sri Lanka is only more economical than its competitor markets for three-star rated beach resort hotels.

For all other categories (3+, 4, 4+), Sri Lanka is more expensive than the non-Sri Lanka market segments, the report said.

It compared room rates in Sri Lanka, which have gone up following an influx of tourists after the end of the island's 30-year ethnic war, with those in Thailand, Indonesia, Vietnam and Kenya

Capital Alliance said the tourism industry in Sri Lanka in the past has mainly attracted "low to middle income travellers who have a greater income elasticity of demand on recreational activities."

It noted that the government now intends moving away from mass scale tourism to attract upscale traveller