Business Times

Sri Lanka tourism prepares for more arrivals

Bids for 10 islands at Kalpitiya as tourist resorts are being evaluated, a weekly meeting brings all state agencies together to speed up tourism-related project approvals and major changes soon to the Tourism Act 2005 to revert back to a single state tourism agency are gradually putting Sri Lanka back on the global travel map.

“We are bringing the three institutions (dealing with development, marketing and conference promotion) under one authority to improve efficiencies,” said Dr Nalaka Godahewa, Chairman Sri Lanka Tourism.
“Seeking more money to develop the product is not the main reason,” he told the Business Times.
The 2005 Act which was only implemented in 2007 distributes the tourist levy paid by the industry into four different segments with marketing getting the bulk of the money.

However with an urgent need now to develop infrastructure and product development, authorities decided to amend the Act. “However not having the money was not the main purpose for the changes,” Dr Godahewa noted, adding; “The Act has to change to ensure better efficiency.

In the past three years there has been no benefit in having four separate agencies (including the hotel school) as they are going in different directions with no cohesive strategy. We need one goal; one objective.”

The proposed changes in the Act will focus on five areas - investment and promotion; classification and regulation; marketing; research & planning; and development. The proposed amending legislation is before the Legal Draftsman. While the authorities are pushing ahead with raising the number of rooms to 50,000-60,000 by 2016 when the target of 2.6 million tourists must be met, efforts have been successful in speeding up approvals and reducing the time spent on this to a couple of weeks from around a year earlier.

“The biggest problem investors had was getting quick approvals (through the Board of Investment and other agencies). We have set up a one-stop shop where we meet once a week and clear approvals. Now a common application is given compared to several earlier,” he said.

In the meantime bids for 10 Kalpitiya islands closed on December 3 and the technical committee evaluation has begun. The Tourism chief said bids include those from 2-3 major investors backed by international brands. The islands range from 100 acres to 800 acres with a local population. “There would be 40 different products – whaling, domestic airport, marina (to transport from one island to other), helipad, etc,” Dr Godahewa said adding that negotiations are underway over the possibility of increasing the lease period from the proposed 30 years now.

“Investors are putting big money --- $200-250 million - and need longer terms,” he said.
Asked for comments on changing the Tourism Act, which the industry backed to the hilt in 2005-07, Jetwing Group chairman and tourism specialist Hiran Cooray said it was a good idea to develop the product at this point of time. “Yes, there is more money needed for development and under the current provisions that is not possible. Thus a change is justified.”

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