Over the last few years, media reports of unregulated foreigner- and tourist-run businesses have become more frequent. While multiple governments, and the broader tourism industry had turned a blind eye to such infractions, perhaps due to a strong desire to improve the island’s tourism landscape and the economic benefits it brings, the issue has snowballed onto a scale that can no longer be overlooked or ignored.  

While the tourism industry has long had mixed feelings about regulations, given what is transpiring today, it is evident that the regulatory process needs to be updated, and effectively enforced.

Last week’s security alert issued by the United States Embassy barring its personnel from travelling to Arugam Bay and advising citizens to avoid the area due to ‘credible information’ regarding a possible attack targeting tourist locations in the locality, was swiftly followed by a wave of warning from United Kingdom to Australia, and Russia. The Israeli National Security Council had reportedly called on its citizens to immediately leave the surfing destination and others around the island’s southern coast. While the risk of a threat had been communicated to the Government earlier on, and the State had taken preventive and precautionary measures, the US’s announcement last week came as a surprise to the public. The failure of the Government to balance operational secrecy of ongoing security and keeping the public informed on serious security concerns, will also be part of the new administration’s learning curve.

Over the past few years, the infractions carried out by foreigners, mostly tourists, have developed from low-end breaches of the law, such as being unregistered tour guides to the organised-level running of hotels, events such as musical nights, to more serious infractions such as narcotics distribution and prostitution. The scale and frequency of such operations, where the payment for services, lodging and supply of narcotics are supported by money-changing hands through digital platforms with accounts based overseas, several law enforcement sources said. There by making the issue harder to prosecute – due to difficulty in establishing and accessing financial details for evidence. It also means that Sri Lanka does not financially benefit from such operations, which does not help with the island’s tourism push to generate foreign income. Further, the tourist-run illegal businesses, pays no tax or rates to the State, leaving state coffers at a loss.

Local tour guides, while not without some shortcomings of their own, have long lamented the influx of Chinese and other nationals who act as tour guides for a fee for visiting tour groups. Over the years, many Chinese, Indian, Nigerian, Malaysian, and other nationals have also found to be travelling to Sri Lanka on a tourist visa to engage in online scams in an organised manner. A practice which has recently become a serious cyber safety and security threat.  Similarly, Ukrainian and Russian tourist, some who have been identified as draft- dodgers, trying to avoid national service in their own countries, have been implicated in running hotels, pubs, restaurants and even snorkelling/whale-watching excursions, much to the dismay and ire of local entrepreneurs and hoteliers. During the Covid pandemic, Sri Lankan authorities were criticised for turning a blind eye to such action, when tourist arrivals were few and far apart. The local tourism industry has also complained about such infractions to the State. It must be noted that many of the tourists involved in such infractions, also overstay their visa.

In the case of Arugam Bay, residents and industry had complained to the State, multiple times, and the situation had reached some heated exchanges, with locals questioning why the State allows tourists to exploit legislative loopholes to make profit overseas, while the local players who comply with the law and pay taxes are overlooked when they complain. Questions have been raised if some officials are complicit in such illegal operations.

Given the concerns raised, and the fact that such illegal establishments like the ones in Arugam Bay, and elsewhere make the Sri Lanka vulnerable to transnational threats and violent extremism,  and the fact that the State is losing revenue while our cyberspace is put at risk, it is high time that the Government revisit tourism regulation.