Business Times

Project Sri Lanka as “Only virgin Girl on the beach” –PBJ tells tourist industry

By Bandula Sirimanna

Sri Lanka should be projected as ‘the Only Virgin Girl on the beach although Minister Sarath Amunugama had always used to remind us that Sri Lanka was not the only girl on the beach,” Treasury Secretary P.B. Jayasundera told the country’s tourism industry.

He was speaking in lighter vein while delivering the keynote to a gathering of top Treasury officials and tourism industry personalities at the AGM of the Tourist Hotels Association of Sri Lanka (THASL) last Friday.

Dr Jayasundera, also Secretary Ministry of Economic Development, said tourism is one area in Sri Lanka where investment will happen involving all small, medium and large scale businesses. In fact very soon, the world-class tourist investments will be taking place with the Shangri-La global network already here with a US$125 million investment for a 10-acre land at the Galle Face beachfront in Colombo.

An investment of around $400 million will be made on the construction of an integrated tourism facility, which is designed to be complete over 30 months. “This is a flagship FDI that one can talk proudly of.
A few more flagship investments have been lined up for takeoff,” Dr Jayasundera said however without mentioning a word about Chinese defence contractor China Aviation Technology Import-Export Corporation (CATIC)’s 7-acre land deal in Colombo's 'Galle Face' beachfront to set up a hotel cum mall complex.

The land alienation procedure will also be streamlined and simplified introducing new legislation, he revealed. “From 2013 onwards, we may need high investment of around 32 % to generate higher growth. However even with little investment Sri Lanka can generate more growth because the existing capacity will be in full production from now onwards,” he said.

Basil Rajapaksa, Minister of Economic Development who was the chief guest, did not make a speech at the meeting allowing his ministry secretary to do all the talking.

Dr. Jayasundara said that Sri Lanka’s new tourism strategy for the period from 2011 to 2016 is aimed at lifting the hospitality industry to a US$ 3 billion industry and the tourist hotel owners now must attract high spending tourists. There is no point in drawing tourists who are not capable of spending even as much as the local tourists. “We should keep in mind that peace has a price and the benefits of peace should be harnessed as soon as possible,” he said.

The Ministry with the private sector has launched an ambitious programme of doubling the hotel room capacity to 45,000 by 2016 over the current 22,745 to accommodate 2.5 million arrivals.

Measures will be taken to increase foreign exchange earnings from $501 million in 2010 to $2.75 billion in 2016, increase arrivals from the current 654,000 to 2.5 million by 2016, increase the current employment of 125,000 to 500,000 by 2016, attract $3 billion in Foreign Direct Investment (FDI) within the next five years, contribute towards improving the global image of Sri Lanka and position the country as one of the most sought after destinations in the world, Dr. Jayasundara said.

Highlighting 14 areas for Foreign Direct Investments that the government has planned to open up, Dr. Jayasundara noted that these areas will be for golf courses, water parks, marinas, entertainment studios, light aircraft services and sea planes, conventon and exhibition centres, gaming cities, race courses, theme parks, shopping malls, adventure sports, boat manufacturing and boat hiring and taxi services.

THASL President Anura Lokuhetty noted that the biggest hindrance to local investors who embark on new hotel projects, is to find a suitable land at an affordable price. The high price charged by the authorities to lease state land is an issue. “If an investor is called upon to pay Rs 20 million an acre, for 10 acres he has to pay Rs.200 million, up front. This will definitely raise the question of viability of the project. Therefore it is prudent to have a mechanism to collect such lease payments over a period of time,” he urged.

Mr Lokuhetty said that “foreign tourist arrivals to Sri Lanka hit a record high of 654,476 in 2010 with a 46.1 percent year-on-year rise and was able to surpass the previous record of 566,202 set in 2004. The tourism revenue per guest night in 2010 has increased from $81 to $88 which is +10% year-on year. The growth forecast for this year is 20%; exceeding 780,000 FTAs (Foreign Tourist Arrivals)”.

The hotel and tourism industry’s contribution by way of revenue to the national economy in 2010 recorded $575.9 million as against $350 million in 2009. Earnings through tourism in first four months of this year rose to $270.6 million, up 64.8 % compared to the first four months of 2009, he said.
The tourism sector is expected to create one million employment opportunities and an annual income of $8 billion by 2020. “Based on the current status quo, it would tantamount to the industry providing sustenance to over four million people which is the equivalent of 20% of the population,” he added.

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