Sri Lanka tourism poised for strong growth: JLL

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Jan 14, 2016 (LBO) – Sri Lanka is on the brink of a strong reform agenda and transformational change that could pave the way for inclusive and balanced growth, JLL said in a research report focusing on the tourism sector.

For the hospitality industry, this means aiming for 2.2 million tourists, up from 1.8 million last year, the professional services and investment management firm said.

“Building on a strong infrastructure base, establishing a structured investor framework and providing the required focus and investment into the promotion and development of the tourism sector will be the immediate need.”

Being ranked among the “top ten coolest countries” in the world to be visited in 2015, by Forbes magazine, suggests the tourism industry is well placed for growth.

“Sri Lanka’s cultural triangle is of great significance to the Buddhist population, with the  country having a repository of some 6,000 Buddhist monasteries.”

“Approximately 72 percent of the Buddhist tourists in Asia Pacific reside between China, Japan and Thailand; however, South East Asia is a largely untapped market for Sri Lanka,”

A focus on road development will support the tourism sector, although defining a consistent brand – currently “Sri Lanka – One Island, Thousand Treasures” – is needed.

According to the SLTDA, Sri Lanka has 28,000 rooms, of which over 60 percent fall in the informal segment consisting of supplementary establishments and unclassified hotel inventory.

The total room inventory across the country increased by 1,850 to reach 18,100 rooms in 2014, excluding supplementary establishments.

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“Growth in average room rates has been largely contained due to the increased hotel supply additions – the country saw an overall increase in rates of just 3 percent in the past financial year, while the past four-year period has seen a 7.5 percent increase in rates.”

“From 2016 onwards, the market will see the entry of internationally branded hotels on a large scale, beginning with the south-west coast, followed by Colombo and eventually other parts of the country.”

The enforced “minimum room rate” in Colombo has served to prop up the Average Room Rate in Colombo and prevent undercutting among hotels, however, rates are perceived to be high for the hotel product offered and pricing should be liberalized, JLL said.

Nevertheless, occupancy rate in Colombo has been falling due to an increase in the amount of rooms available.

A shortage of skilled labour is also a problem affecting the industry, and steps should be taken to improve training, the firm said.

According to the company, JLL’s Hotels and Hospitality Group has more than 320 hotel and hospitality experts who have overseen transactions totaling more than 48 billion dollars in the last five years.

JLL has 230 corporate offices operating in 80 countries, and was recently involved in advisory services for clients for the Colombo Port City.

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Liam Daniels
Liam Daniels
6 years ago

Let’s take a moment to thank the Rajapakse government for these initiatives.

Nirmalan Dhas
Nirmalan Dhas
5 years ago

Sri Lanka has been poised to launch its tourist industry since the 1970s. A preoccupation with the southern, south western and coastal regions, parts of the hill country and the cultural triangle to the exclusion of the broad beaches on the northern notth eastern and north western coastal areas led to the distortion of the industry. The militant rebellion that followed ensured that these areas fell out of bounds. Attempts to develop these areas using the armed forces left a bad taste and caused popularity to wane.

Now that the rebellion has been crushed by the force of arms there is an opportunity to encourage the people of these areas to buy into the tourist industry and invest their culture, history, religion, cuisine and lifestyle along with its distinctive ecological context in the tourist industry. Yet I do not see any moves being made by the government to encourage and facilitate this investment. The overall atmosphere appears to be one of rejection and exclusion rather than acceptance and appreciation.

This it seems is the curse of the majority which must be lifted if success is to be won…

Kottu
Kottu
5 years ago
Reply to  Nirmalan Dhas

Nirmalan, investment has to happen from private sector but investors must surely be uncomfortable when all they hear from North is abrasive rhetoric and keen interest in clinging to separatist ideology even after end of armed conflict.

samsaroyan
samsaroyan
5 years ago

As a expat living in US, I am ashamed to say that the Price discrimination in Sri Lanka towards foreigners are shameful and embarrassing. Most public and tourists attractions are charging high fees and prices from foreigners and exploiting and abusing them right in the day light. If you remember the story of the goose that laid golden eggs, Sri Lankans should learn the lesson and be more careful about how they conduct tourism business.
Instead of robbing them outright, having more value added services and strategic planning to increase the value proposition to them and also to the hosts will create a long term sustainability and growth in the industry. Last time I was in Sri Lanka with couple of My American and Canadian friends, I had to explain why White Skin has to pay premium prices just to get in, and It was embarrassing so Please Stop the Price Discrimination Now….