Sri Lanka Tourism Report 2011: New research report available at Fast Market Research

Nov. 25, 2010 - PRLog -- In 2009, Sri Lanka welcomed 447,890 tourists, an increase of just over 2% year-on-year (y-o-y), and in line with BMI's expectations. Looking at trends in 2010, the island attracted 445,228 tourists over the first nine months of the year, an increase of 44% y-o-y. July was the high watermark for monthly arrivals, when Sri Lanka welcomed 63,339 tourists - up by 50% y-o-y.

For the full year, we estimate that Sri Lanka could see an increase in tourist arrivals of about 50% y-o-y, with perhaps even some upside risks to this forecast given that November and December have historically been Sri Lanka's peak months for arrivals.

The reason for the dramatic improvement in Sri Lanka's tourism data has been the return of peace to the island following the May 2009 declaration of victory by Sri Lankan President Mahinda Rajapaksa over the rebel Liberation Tigers of Tamil Eelam (LTTE, also known as the Tamil Tigers). Over the course of 2010, key tourism source markets such as the US, Japan, the UK and other European countries relaxed their advisories against travel to Sir Lanka.

With peace taking root in the country, we believe the stage is set for several years of strong growth in tourism arrivals and tourist revenues. By the end of our forecast period in 2015, we believe Sri Lanka could be attracting more than 950,000 tourists a year and generating US$725mn in tourism revenues. The tourism industry should also continue to create jobs. The Sri Lanka Tourism Development Agency (SLTDA) said the industry directly employed 52,071 Sri Lankans in 2009, with another 72,899 jobs estimated to be indirectly created by the industry.

Tourism Is A Priority For Government

Given the more stable political background in the country, the government is prioritising tourism once more. In May 2010, the Deputy Minister of Economic Development, Lakshman Yapa Abeywardena, said the government is targeting US$1bn in annual tourism revenue by 2015. To that end, it has launched a series of marketing promotions aimed at foreign tourists over the past 12 months.

The Visit Sri Lanka 2011 campaign included TV adverts on channels such as BBC World, al-Jazeera, CNN and Discovery Travel & Living. They were launched in November 2009 and ran for 20 weeks, for the first five weeks as a 60-second commercial and then as a 30-second commercial for 15 weeks. The country is also taking steps to improve its tourism infrastructure. In September 2010, Sri Lanka's government news agency announced that a Malaysian company is to develop a US$100mn high-speed railway project to link Colombo's Kollupitiya railway station at and Bandaranaike International Airport. BMI believes that these steps to promote tourism are well founded and we retain our bullish outlook for the Sri Lankan tourism sector in 2011, but whether the country can increase tourism arrival numbers and revenues as quickly as it would like, to 2.5mn arrivals by 2016 and US$1bn in revenues by 2015, remains to be seen. However, although our own forecasts may appear less bullish than the government's we remain optimistic about the outlook for Sri Lankan tourism across our newly extended forecast period through to 2015.

Attractive Hotel Investment Destination

In September 2010, the Hindustan Times reported on plans by Taj Hotels & Resorts to expand its operations in Sri Lanka. The CEO of the India Hotels Company (the parent company of Taj), Raymond Bickson, said Taj is looking at sites on the east and west coasts, as well as in Kandy and Galle.

Sri Lanka's official government news agency has also reported on the likelihood of Hong Kong-based hotel chain Shangri-La looking to enter the market. In August 2010, Shangri-La CEO Ean Khoon Kuok visited Sri Lanka on the invitation of the Minister for External Affairs to check out possible sites for future hotels.

Local players are also considering fresh investment in hotels. In September 2010, Lanka Business Online reported that Renuka Holdings was considering the development of property it owns in the north and east of Sir Lanka into tourist resorts.

The north and east of the island should now receive more investment in hotel properties following the end of hostilities with the LTTE. In late 2009, Lanka Business Online reported that the SLTDA had approved the construction of several new hotels along the island's east coast following the end of civil war. The SLTDA director general, S. Kalaiselvam, hopes the country can build 20,000 new rooms in the next seven years. Three zones are reportedly being prioritised for tourism development: Kuchchaveli, north of the eastern port of Trincomalee; Kollupitiya on the west coast; and Pasikudah. In August 2010, Lanka Business Online reported that a Maldivian investment company, Blue Continent, has been given permission by Sri Lanka's Board of Investment to build a 150-room tourist resort at Pasikudah. The resort is expected to be open by December 2011.

For more information or to purchase this report, go to:
-  http://www.fastmr.com/prod/94386_sri_lanka_tourism_report...

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Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.