Q What kind of impact has the disaster had on the Sri Lankan tourism industry?


With the possible exception of the fisheries sector, no other sector has been more severely affected by the tsunami than tourism. Of the 246 hotels in the country, 47 of the star class hotels were affected. By January 5, 22 star class properties had resumed operation. The remaining 25 hotels underwent varying degrees of damage, with only seven of them seriously damaged. With renovation work under way, all of the major hotels along the southern coast are scheduled to reopen by the end of this February.


The tourism industry experienced material damage in excess of $200m. Even if the damage to the country’s capacity to handle tourists was limited to the south-western and north-eastern coasts, the entire industry has been hurt by sensational news reports that incorrectly suggested that the entire country lay in ruins.

Q How significant a role does tourism play in Sri Lanka’s economy?



Tourism is a core contributor to the national economy. It is the fifth largest foreign exchange earner and benefits about 300,000 people directly and indirectly. In 2003, it brought an inflow of $325m. The direct and indirect contribution to GDP stands at about 10.8%.

Q Which areas have been worst hit?


The country’s tourism attractions are rich and varied. Sri Lanka showcases different tourism products from cultural and heritage tourism, to sea, wildlife, adventure, eco, spiritual and ayurvedha (holistic medicine). It is home to seven Unesco World Heritage sites, ranging from the ancient kingdoms of Anuradhapura and Polonnaruwa to the exquisite temples of Dambulla, the Sinharaja Rainforest, the rock fortress of Sigiriya, Adam’s Peak and the living heritage site of Galle Fort. All these remain unaffected.

In the past three years, Sri Lanka’s tourism sector has been promoting culture and heritage. However, the traditional sea, sun and sand product has continued to draw holidaymakers.

The tsunami affected only the beach resorts on the south and eastern coastline. The resorts in the hill country, capital and cultural triangle remain open and able to cater to full capacity. The wildlife parks and the beach resorts on the north-western coasts are also open for business as usual.

Q What steps will the government take to help the sector recover?

A The government is launching a multi-pronged effort to help the tourism industry reinvest through a series of duty and tax concessions. And an international marketing and image promotion exercise will help to re-establish the country as a premium tourism destination with a variety of attractions, not least of which is the beach. The government also intends to invest in community development of about 15 coastal tourism zones.

Q How will efforts to attract foreign investment be affected?

A Tourism is very important from the perspective of the Board of Investment. Several international chains have established a presence in Sri Lanka, or are in the process of doing so. The country’s stable climate and wide variety of tourist attractions (cool hill country, wildlife, cultural triangle, world heritage sites, shopping and entertainment in the capital, adventure sports and beaches) that are all only a few hours away from each other, help to make Sri Lanka an ideal tourist destination that ensures value for any investment.

The building work required for the country’s tourism infrastructure, in order to meet the projected increase in arrivals over the next three years, offers significant opportunity for investment. Tourism investment projects that were in the pipeline are still on target.

Investment, in general, is expected to receive a boost due to the major opportunities in reconstruction that will arise. Power, infrastructure, housing, transport, leisure, medical facilities and others will need to be rebuilt and upgraded, and the government is envisaging that public-private partnerships will form a substantial part of this project portfolio.


Q How optimistic are you about the prospects for recovery?


The country’s inherent strength lies in the diversity of the various tourist attractions and in the resilience of the people. Sri Lanka will be re-established as a premium tourist destination in the next six to 12 months. The tourist industry is strong and experienced and the people are naturally hospitable and welcoming. The government is investment-friendly and the country has enjoyed an open economy for almost three decades. All of the basic indicators for a strong recovery are in place and it is only a matter of time.

For further information on Sri Lanka tourism’s recovery process, visit www.bouncebacksrilanka.org