NDB supports tourism development projects worth Rs. 1.9 billion

Following the restoration of peace in 2009, most sectors of the Sri Lankan economy started reviving rapidly, indicating unprecedented boom and exciting growth potential. The tourism industry is one such industry that thrives on the peaceful situation of the country. With Sri Lanka recording its one millionth tourist recently, the tourist industry seems to hold much promise and potential for growth this year.

NDB remains well poised and focused in its efforts to provide financial support for the construction of new hotels, renovations, refurbishments and upgrading of existing hotels in a bid to support the accelerated development of tourism as an emerging sector of the economy.  

During the post-war regime up till November 2012, NDB has approved project loans to the value of Rs. 1.9 billion for hotel projects located in strategic tourist locations covering Passikudah in the Eastern Province, Hikkaduwa in the Southern Province, Mount Lavinia and Waskaduwa in the Western Province, Dambulla in the North Central Province and Kandy in the Central Province.

Among these projects are two boutique hotels with unique and novel features while one of the upcoming hotel projects financed by NDB in Passikudah is in the five star category. Upon completion of these projects, 228 new rooms will be added to the existing hotel room capacity in the country. In addition, part of the loans approved has been utilised for refurbishments, renovations and upgrading of existing hotels.

Further, NDB is at present considering a pipeline of proposals exceeding a value of Rs. 2 billion, for the purpose of financing the construction of new hotels. The proposed hotel projects are expected to come up at strategically located venues in popular tourist destinations such as Negombo, Ambalangoda, Weligama and Nuwara Eliya.

During the past two years, the Sri Lankan tourism industry has experienced an unparalleled growth fuelled by sustained economic development and strengthening of ties with developed world via opening of new tourist markets. This development is evident from the tourist arrival figures published by Sri Lanka Tourism Development Authority.

In 2011, tourist arrivals surpassed all previous records and reached a new milestone by achieving 855,975 arrivals, registering a growth of 30.8% when compared with the arrivals of 2010. This growth rate in tourist arrivals that Sri Lanka achieved in 2011 was nine times the growth of 4.4% in tourist arrivals worldwide.  The arrival rate has been much faster in 2012 and the total number of arrivals as at end December 2012 reached the level of 1,000,000 which indicates a growth rate of 16.8% compared with the corresponding period in 2011. Foreign exchange earnings from tourism in Sri Lanka during 2011 were US$ 838.9 million as compared to US$ 575.9 million in 2010, registering a growth of 41.4%.

Hence, tourism has been identified as a priority sector and an economic growth engine and the Sri Lankan Government is also committed to ensuring sustainable tourism development through the implementation of tourism development strategies along with the policies of the five year development plan announced by the Ministry of Economic Development with the tagline ‘Refreshingly Sri Lanka: The Wonder of Asia’.  

As such, the tourism sector displays great potential to expand at an even higher rate in future, ensuring the consequential development of infrastructure at the destinations. It has the capacity to capitalise on the country’s success in the services sector and provide a sustainable model of growth.

The continuing evolution of the global tourism industry, growing recognition of tourism’s contribution towards employment and economic growth, availability of better infrastructure, well focused marketing and promotional efforts, growing inter-regional cooperation and more effective public-private sector partnerships are seen as the key drivers for tourism in time to come.

Today, Sri Lankan tourism has become one of the largest sectors in the economy, providing employment opportunities to a wide spectrum of job seekers with the potential of stimulating the other economic activities through its forward and backward linkages with a host of sectors such as agriculture, manufacturing and transport.

As per the tourism development plan, it is expected to attract 2.5 million tourists by 2016 and to construct 20,000 hotel rooms during the same period to cater to the increasing demand.

As a bank dedicated towards national development, NDB pledges to continue its contribution towards tourism and development. The bank hopes to influence the development of the sector by way of financing new hotel projects and refurbishments and providing funding for renovations and upgrading of existing hotels. The bank would also pay special attention to novel concepts and eco-friendly projects that give way to the sustainability of the industry.

NDB is one of the fastest growing banks in the country with NDB Group having regional operations in Maldives and Bangladesh. The bank offers a wide range of commercial banking services through its growing island-wide branch network, catering to an increasing customer base from all walks of life. Through the combined synergies of the diverse constituents of the NDB Group, its customers have access to a full range of banking and financial services including project finance, corporate banking, SME lending, retail banking, investment banking, stock brokering, wealth management and insurance solutions, making NDB a truly universal bank.