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Sri Lanka targets Northeast for tourism expansion
A new tourist hotel and beach resort is to be developed in the North and the East by the Tourism Ministry, which wishes to target tourist expansion within a short period of two to five years.
Resort development, a first of its kind is to be implemented by granting permission to the private sector to build hotels in state-owned lands earmarked in areas of tourist destinations. This was disclosed by Director General, Sri Lanka Tourism Promotion Bureau, S.Kalaiselvam when he addressed the Ceylon Chamber of Commerce Forum this week on public-private sector dialogue in facilitating private sector investment in these two provinces.
The resort development concept which is at the consultation phase is expected to cover 4,000 acres and long stretches of unutilized coastline aiming at the upper end of the tourist market. Some areas on the east coast have already attracted investors who have expressed willingness to start tourism projects.
The pristine beaches of Kalkudah and Passekudah are popular with adventure travellers while Britons will be prominent among travellers who plan to visit Arugam Bay.
Taking this into consideration, the Tourism Ministry has unveiled plans to allocate 500 acres of state-owned land in the Trincomalee District and the Sri Lanka Tourism Promotion Bureau has so far received five hotel projects. “Thirteen beach resorts are to be built in another 150 acres in Passekudah.
These investors should build tourist hotels within one and half years,” Mr. Kalaiselvam said. The government will also go ahead with the Kalpitiya tourist resort project. The development at Kalpitya, which is across the lagoon from Wilpattu National Park, is scheduled to open in 2011.
Secretary, Ministry of Agriculture of the Eastern Provincial Council, V. Pathmanathan said that Rs. 5,000 million has been made available from a Japanese fund amounting to a maximum of Rs. 30 million for each investor who is willing to start industrial or agricultural projects in the Eastern province through the Bank of Ceylon Branches. Dr. Mervyn Jayakody, Manager Investment Promotions of BOI disclosed that a new package of incentives including a 15 year tax holiday has been devised to attract investors to the North and East.
“We are sure that tourism and agriculture and fisheries will play a key role in reviving the economy of the country and will in particular benefit the people of the North and the East,” he said.
(The Sunday Times - Sri Lanka / Sunday 02 August 2009)

Sri Lanka in bid to push up hotel room rates
Aug 04, 2009 (LBO) - Sri Lanka plans to impose minimum room rates for hotels in and around the capital Colombo to push up prices following the end of a war which has made the country safer for tourists, government officials said.
The Tourism Ministry said minimum room only rates of between 40 US dollars and 120 dollars would be imposed when regulations under the tourism law are enforced, which they said would be soon.
Tourism Ministry secretary K A D George Michael said the ministry will hold talks with hoteliers this week or next after which the new room rates would be enforced.
"Now the rates are 30-40 dollars below what hotels can demand," he told LBO.
"We had a justification (for low rates) during the war when demand was low. But now demand is catching up very fast. We should not degrade our products."
The island's 30-year separatist war had deterred foreign visitors and kept the industry in the doldrums for years, forcing hotels to lower prices to attract tourists.
But government forces defeated the Tamil Tiger rebels in May and the industry expects more visitors this winter season with hotels reporting sharply higher bookings and inquiries.
Bernard Goonetilleke, chairman of Sri Lanka Tourism, the tourism promotion agency, said the price war among hotels could be damaging in the long-run.
"There has been a price war in hotels in Colombo and Greater Colombo city hotels which reduced room rates by a considerable figure, which if it continues would adversely affect the interests of the hotels themselves," he said.
"Also the excellence of the hotels and service capacity could get affected because if you bring down rates you also bring down service standards.
"Some hotels might find it difficult to manage if it (price war) continues. So the idea is that there should be minimum room rates justifying the cost of operations in each place. There's no need for hotels to undersell at this point of time when demand is on the rise."
Michael said hotel room rates in Colombo were far below that of hotels in the region.
"You'll never find rates like this elsewhere in the region. In India and the Maldives the minimum rate is 150- 200 dollars."
He said the minimum rate rule might be extended to other hotels in Sri Lanka as well.
A previous voluntary effort to prevent a price war among city hotels had failed, prompting the move to bring in new regulations, Michael said.
(Lanka Business Online 04-Aug-2009)