• Anticipated growth may lead to room shortages by ’25
• SLTDA seeks quality standards adherence in informal sector
• Informal sector’s impact on country’s image prompts formalisation efforts

The Sri Lanka Tourism Development Authority (SLTDA) aims to transition informal sector luxury boutique hotels into the formal sector to meet the increasing influx of high-end tourists, in addition to seeking to attract local and foreign investors for new hotel projects or expansions to address the growing demand.

Speaking to The Sunday Morning Business, SLTDA Chairman Priantha Fernando stated: “If markets such as China open up, the tourist inflow will be much greater, alongside the tourism promotional campaigns carried out globally. Therefore, the number of high-end tourists coming to Sri Lanka will increase, while the country will run out of accommodation by 2025.”

He noted that they were on track to achieve their target of 2.3 million tourists for 2024, with expectations of reaching around 2.7 million next year if the current trend persisted. 

This anticipated growth suggests that the country is likely to experience spillover benefits in the coming years.

Since the current inventory will prove inadequate by the end of 2025, the SLTDA is addressing the shortfall in room capacity through two approaches. 

Firstly, it is engaging with the informal sector, comprising 30,000-35,000 unregistered rooms, aiming to formalise operations within the sector.

Fernando explained that the difference between the informal sector and the formal sector was that the latter’s hotels came under the scrutiny of the SLTDA. Further, they have to maintain quality standards and ensure that they conform with criteria that have been laid down under different categories.

According to the SLTDA, there is an overall threat to the image of the country as a result of the informal sector failing to maintain qualities and standards. 

The SLTDA is also focusing on both local and foreign investors through global promotional campaigns. Fernando clarified that they were hoping to attract new investors, both local as well as foreign, to come in to meet the demand.