Sri Lankan Tourism

reogma|Sri Lankan Tourism
6 mins read

The Forbes magazine recently included Sri Lanka among its ‘10 Coolest Places to Visit in 2015’ list. Number of visitors travelling to Sri Lanka has grown at a rate of 30% from 2013 to 2014

Definition / Scope

Travel and tourism industry is one of the oldest and largest service industries. This industry is primarily driven by the factors like social, recreational, exploring new areas, adventure, knowledge seeking, religious, business opportunities etc. It provides a considerable amount of opportunity in terms of employment and provides growth in GDP and earning in terms of foreign exchange.

The contribution of tourism industry in world GDP is growing annually at approximately 4%.

Tourism is gaining popularity and becoming a major industry in Sri Lanka. Major tourist attractions are focused around the island’s famous beaches , ancient heritage sites located in the interior of the country and resorts located in the mountainous regions of the country. Also, due to precious stones such as rubies and sapphires being frequently found and mined in specific areas, they are a major tourist attraction.

Market Overview

The Forbes magazine recently included Sri Lanka among its ‘10 Coolest Places to Visit in 2015’ list.

The country offers a variety of options to travelers starting from beautiful landscapes, wildlife, adventure sports and heritage and religious sites.

The GDP of the country was USD 74.94 bn in 2014.The average contribution of Sri Lankan tourism to the country’s GDP is 4%. The tourism industry is growing at the rate of 13% and the same growth rate is predicted for future also specifically after the end of the civil war.

Due to geographical location and the various joint efforts by the Sri Lankan government and tourism board, the country is emerging as one of the most attractive tourist destination of Asia.

There are several areas of improvement required to be at par with other popular tourist destinations of Asia.

Market Risks


The country is surrounded by Indian Ocean and anything adverse happening on Indian Ocean would affect the country’s tourism for example the 2004 Tsunami. However, the country and industry recovered due to continuous effort by the local government.

Civil War

The country was also suffering from a prolonged civil war and earned bad name in the international arena on human rights abuses, land grab, blockage to access sea for fisherman in the name of tourism development.

Government Policy

A peculiar scenario was observed in the country as the defence organisations like army, navy and air force started offering budget tourism facility with opening hotels all over the country and increasingly offering tourist activities. The provision of tourism services by the military became problematic since it deprives the local population of a valuable income source. It also raises major concerns with regards to transparency.

Private Organisations

Overseas travel agencies operating in the country started to improve the scenario by offering due diligence concerning human rights. However, these efforts are not sufficient to prevent lacking consultation processes, land grabbing, displacements and restrictions on access to the sea.

Low promotional schemes

It is necessary for Sri Lanka to have an effective tourism promotional strategy to match the slogan ‘Wonder of Asia’. Sri Lanka lacks a cohesive strategy and marketing campaign which should be a mutually-agreed private-public partnership. There are various promotional exhibitions that have taken place in foreign capitals in the past but they are not based on a master plan to promote the market destination.

Availability of tourism data

Data for an analysis of the sector have a number of shortcomings relating to correct figures and availability.


Another issue that presents a dilemma is which kind of tourists would be targeted– high-end, middle or the lower-end. There are arguments that target would be smaller number of tourists who are high spenders and bring more foreign exchange earnings. But Sri Lanka is still considered as a ‘value for-money cheap-end destination’ and this remains its strength.

Thus the lower end should not be abandoned, while gradually developing the high-end and the middle level tourism. The contribution of tourism to GDP was 1.7% in 2012 and 2.5% in 2013.

Human resource constraint

There has been a plan to increase the number of hotels and hotel rooms by a substantial number. The challenge is regarding adequacy of the human resources to meet this increase. Many hotels in Maldives, UAE, Qatar and Oman consists of Sri Lankan workers – managers, cooks, waiters, gardeners, room boys, hotel car drivers, etc., which proves that there is migration of skilled and semi-skilled workers overseas.

Casinos and other night entertainments

There should be a carefully-thought-out exercise based on what other competing countries are providing in terms of nightlife and entertainments.

Top Market Opportunities


The country has beautiful tropical golden palm fringed beaches, lush green landscapes, world-famous tea plantations, scenic waterfalls and mountain passes. Apart from that there is a variety of wildlife which can enrich one’s travel experience. One of the biggest wildlife attractions, the Yala National Park is visited by a million people each year. The park features a number of endangered animals, including mugger crocodiles and bengal tigers

Adventurous water sports, exotic dishes, colourful festivals and an understanding of the country’s history like ancient dynasty in terms of ruined capitals, rock fortresses, cave temples, giant Buddha and the sacred city of Kandy are other major attractions.


Geographical Location The country can be leveraged to an international transit point like Dubai or Singapore, as it is positioned over the equator.

Government policy The Sri Lanka Tourism Development Authority (SLTDA) is aiming to developing the current and potential new markets together with the Sri Lankan Government and the local and international media partners. The SLTDA offers investors various attractive and feasible trade support schemes and business opportunities for developing the infrastructure of the country.

Exchange Rate The current exchange rate of Sri Lankan rupee vs USD (133.49 Sri Lankan rupee = 1 USD) may be an added factor for tourists preferring it over other places.

Market Drivers

From a tourism perspective, the number of visitors travelling to Sri Lanka has grown at a rate of 30% from 2013 to 2014 and it is an exciting time to visit the island nation. With the growth of the tourism sector, national tourism policy is continually developing and receiving greater attention. Policies are being made favourable to attract tourist and achieving collective goals for the country.

According to the Sri Lankan tourism board, the number of tourists visited the country in 2014 is slightly over 1.5 millions. This figure was based on tourist arrivals and hotel occupancy. Most favorable travel time is December which experienced the highest number of tourists with 178,672 visitors and May was the quietest time with 90,046 tourists.

More than 1.5 million tourists traveled to Sri Lanka in the year 2014. The British were the largest Western European tourist group, with 144,168 visitors among whom more than 20,000 were Swiss. They were followed by the Germans with 102,977 tourists.

The industry also helps the country to build foreign exchange reserve.

Market Outlook


The government has set a target of receiving 2.5 million tourist arrivals by the year 2016. In order to achieve this target, several promotional and developmental activities have been initiated.

One such promotional initiative was the declaration of the year 2011 as “Visit Sri Lanka Year”, where each month was promoted with a special attraction and festival. Sri Lanka had also placed a bid for hosting the Commonwealth Games in 2018 in the city of Hambantot, where a new airport and an expansive port facility is currently under development.

Government Efforts

Ministry of Economic Development officially launched the Tourism Development Strategy for the five years period of 2011-2016.

The main target of the tourism sector is to achieve a target number of 2.5 million tourists by 2016 and refers to envisagement of 2020 plans.

Competitive Landscape

Attrition to other destinations

Currently, the hotel industry witnesses significant employee attrition to countries in the Middle East and to the Maldives and India, Malaysia, Vietnam, Singapore.

Foreign Direct Investments (FDI)

Asian countries like India, Singapore, Middle East, Malayasia, etc. have relatively higher volume of FDI in various segments including tourism.


Sri Lanka needs substantial improvement in the areas of public infrastructure, transportation and tourist facilities to compete with other renowned tourist destinations of Asia.

Competitive Factors

The unique selling propositions of destination Sri Lanka are:

  1. Authenticity
  2. Compactness
  3. Diversity

Tourist Police

A full fledged Tourist Police force has been delegated to enable visitors, both local and foreign to enjoy a hassle free holiday. They serve tourists in all matters of guidance, relief in adverse situations and safeguard Sri Lankans from negative practice such as use of children for commercial sex, drugs, and other undesirable activities.

Island wide Policing: The entire Island is covered by 401 Police stations, which are at service 24 hrs of the day to entertain complaints of the general public at the earliest.

Development programs: For developing the current and potential new markets, the Sri Lanka Tourism Development Authority (SLTDA) is committed towards working with the Sri Lankan Government and the local and international media partners, and offers investors various attractive and feasible trade support schemes and business opportunities.

End of Civil War: The end of the conflict in the north has opened up new unexplored areas for tourism.



Tourist Arrivals during 2014-15

MONTH20142015* % CHANGE-2014/15
Up to June727,353830,05114.1

All countries providing the top ten source market for Sri Lankan tourism have been provided Visa–on –Arrival.

Tourist arrivals by country of residence – Top Ten (Jan 2014 and Jan 2015)


The Economic Contribution of Travel and Tourism to GDP (Growth in %)

Growth (%)-1.89.312.113.716.420.82.5
  • Figures obtained till Jan 2015

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