Industry urges fast-tracking hotel construction

By Uditha Jayasinghe

Sri Lanka needs to urgently fast-track its hotel investments to meet the projected tourist inflow of around one million this year, a top industry official said yesterday.

City Hotels Association President M. Shanthikumar told Daily FT that the industry needs to build at least 2,500 to 3,000 new rooms this year to accommodate the historically high influx of tourists expected in 2012.

However, only around 200 rooms were opened up in 2011 despite the record number of arrivals, which saw over 30% growth in the last 12 months, making the challenge that much harder.

“There are around 20,000 to 21,000 rooms at the moment but if Sri Lanka is to meet its target of nearly one million arrivals this year and 1.5 million in 2013-2014, we need at least 10,000 more rooms countrywide,” he said.

The Government has already projected that the Pasekudah project in the Eastern Province will bridge some of this need. The Rs. 6.5 billion tourist development project is expected to open by March 2012, containing 14 new hotels with a combined room capacity of 931.

“There are also companies that are getting ready to re-open their hotels after extensive refurbishment,” pointed out Shanthikumar, estimating that the LOLC group alone could add about 400 rooms once it commences operations, hopefully in the first quarter.

According to its website, LOLC has 626 rooms in the country’s ‘Golden Mile’ on the western coast and in Dickwella in the deep south. Hotel Riverina and Club Palm Bay, which were acquired from the Confifi Group, will be refurbished and open in 2013. Deputy Economic Minister Lakshman Yapa Abeywardena earlier stated that the Government was proposing a strong push to the North and East Provinces with Vakarai being the latest to join the list of tourism zones. Plans are also underway to promote Arugam Bay and the Northern Province to investors.

To date Sri Lanka has received 210 hotel investment offers, to which the Government has given approval to 92 and is aggressively fast-tracking the building of hotels on the ground. Shanthikumar pointed out that the promotional campaigns planned for 2012 would result in more tourists and that the infrastructure had to increase to meet the demand.

Several five-star resorts have pledged to start up business in Sri Lanka, including Sheraton, Shangri-la, Hyatt and South Africa’s Sun City. However, even though these projects add up to nearly US$ 2 billion, they are scheduled to be completed in the 2013-2015 period, making the challenge of needing rooms in the short-term that much greater.