Business Times

Tourism: Occupancy rates and earnings up

By Natasha Gunaratne

Competitive pricing amongst hotels in Sri Lanka and pent up demand have caused occupancy rates to soar as the tourist arrivals to the island in the first three months of 2010 increased by 50.3% over the corresponding period in 2009.

The Tourist Hotels Association of Sri Lanka (THASL) described the three months ending 31 March 2010 as quite positive for tourism with arrivals standing at 160,409 while tourism earnings for the same period increased by 69% to US$141.2 million compared to US$83.3 million last year.. In a statement, THASL President Srilal Miththapala said this is a direct indication of higher yields since traditional last minute discounting of hotel rates due to the war situation did not occur this year and prevailing contracted rates were not diluted.

This translates into approximately US$870 spent per tourist and assuming an average stay of 10 days, the THASL said it indicates an average of US$87 per tourist per day, an improvement over the current US$80. Mr. Miththapala noted that this augurs well for the future and with a higher post war rate structure expected after November 2010, annual earnings should surpass US$500 million.

Although the arrival figures for April 2010 have not been released by the tourism authorities, it is expected that there will be some slowing down of the momentum in April, primarily due to the disruption of air traffic due to volcanic ash debris in Iceland which grounded flights for several days to and from Europe as well as the tapering off of the high season. The months of May and June are typically the lowest performing period for tourism in Sri Lanka and several leading resort hotels have either partially or fully shut down for substantial upgrading and refurbishing activities during the summer months.

The THASL estimates that around 1,200 rooms will be temporarily 'out of stock' over the next few months.

Meanwhile, work on several development projects in the Eastern Province such as the Passikudah Resort, Kuchchaveli Resort and the East Coast Action Plan, is due to commence. According to the Sri Lanka Tourism Development Authority (SLTDA), an Environmental Impact Assessment (EIA) Report for the Passikudah Resort is awaiting approval by the Coast Conservation Department (CCD) for construction on a pilot hotel project consisting of 40 chalets to begin.

An EIA Report for the development of Kuchchavelli is being carried out. The SLTDA said investors for the development of 48 hotels sites have been selected. The land will be allotted accordingly and approximately 150 acres will be developed as a championship golf course.

The SLTDA further stated that the Project Implementation Unit for the East Coast Action Plan identified sites for observation platforms to view elephants at Lahugala and birds at Kumana. The respective government agents have been requested to initiate action to vest the land for these and other projects.
Furthermore, the SLTDA noted that with tourist arrivals to Sri Lanka increasing at a rapid rate, especially in view of the publicity received from various newspaper articles, rankings and trade fairs, it is necessary to expedite the development of the Kalpititya Integrated Tourism Resort Project (KITRP) at the Dutch Bay Islands. Six investors in Kalpitiya have been requested to erect two hoardings on their lands in Kalpitiya which will display the layout of their hotel.

The investors are Heritage Reserves (Pvt) Limited, Dutch Bay Resorts, West Agro Property Developers (Pvt) Ltd, Palm Lanka Holdings (Pvt) Ltd, MSA Sham Saudeen Development & Realty (Pvt) Ltd and Alpha Tours (Private) Limited.

The investors will also construct an abstract model of an accommodation unit, either guest rooms, villas or chalets to scale, using the materials anticipated for the construction of their hotel. This presentation will showcase the new designs and concepts being developed by Sri Lanka’s tourism industry as well as help monitor the quality of workmanship and standards being followed prior to the final approval of the SLTDA for construction.

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