Focus on Sri Lanka: Tourism revenue to exceed $ 1 bn as arrivals hit record high

Sri Lanka’s tourist arrivals hit a record high in 2012, surpassing the previous year’s peak, while monthly arrivals also hit a record in December.
The number of visitors has risen annually in the past 44 months since a 25-year civil war ended in May 2009.
The tourism board expected over one million tourists in 2012 and more than $ 1 billion in revenue, up from last year’s record of $ 830.3 million.
Revenue from tourism rose 23 percent to $ 905.3 million in the first 11 months of 2012 from the same period last year.
Tourism is one of the main foreign exchange earners for Sri Lanka’s $ 59 billion economy, along with remittances from expatriate workers, garments and tea.
Sri Lanka is a developing economy off the southern coast of India.
It has recorded strong growth rates in recent years despite years of civil war.
The main sectors of the economy are tourism, tea exports, apparels and rice production.
Remittances also constitute an important part of country’s revenue.
Many policy reform efforts were adopted by the Central Bank and the government of Sri Lanka early last year to curtail excessive credit growth and the high import demand to contain the trade deficit.
Sri Lanka is reaping the benefits of the new infrastructure projects including a large sea port and an international airport being built in Hambantota in the southern province.
The Central bank of Sri Lanka reported a 6.1 percent growth rate in the Gross Domestic Product (GDP) for 2012.
Sri Lanka, however, targets a 7.5 percent growth in the country’s GDP for 2013.
In a report on global economic prospects, the global lender said Sri Lanka’s economic growth is forecast to rise to 6.8 percent in 2013 as external demand continues to improve gradually and agricultural production growth returns to normal rates.
The 59-billion-dollar economy of Sri Lanka hopes to attract $ 1.5 billion in foreign direct investment (FDI) this year, the country’s Treasury Secretary said.
Sri Lanka is estimated to have received about $ 614.7 million in foreign direct investments in the first three quarters of 2012, the central banks latest data showed.
The development of maritime and aviation transportation is at the forefront of the government’s infrastructure development agenda.
A project is under way to expand the island’s first international airport at Katunayake, 35 km north of Colombo.
It includes the expansion of the transit area, construction of new baggage-reclaim area, multi storied car park and widening of the existing runway and taxiways, mainly to accommodate the Airbus A380 aircraft a new state-of-the-art passenger terminal is also being built with separate sections for arrivals and departures.
The new terminal will feature eight boarding gates, 16 boarding bridges and a separate dedicated gate with 2 further passenger boarding bridges specifically for A380 services.
Sources at Sri Lanka’s Board of investment said a new 98.9 km road project would connect Colombo with the central hill capital of Kandy.
The four-lane provides an alternate link between Colombo and Kandy.
The project will be carried out in two phases. There is also a plan to expand the highway to six lanes.
Upon completion, the travel time between Colombo and Kandy will be reduced to around 45-50 minutes.
Sri Lanka’s extensive investment in public education has produced an adoptable workforce that can rapidly respond to changes in the market.
The Youth Affairs and Skills Development Ministry will set up 10 new universities for technical education this year its sources said.
Rs 1,600 million has been earmarked for universities from the 2013 budget for this purpose.
Currently, Sri Lanka produces 1,200 middle level engineers through the Katunayake Engineering Technology Institute and the Diploma Course in Technology at the University of Moratuwa.
The government has allocated Rs 306 billion for the education sector in the 2013 budget.
Sri Lanka also boasts opening the biggest Fisheries Harbor in the South Asian region in Dikkowita.
The project started in 2008 and was constructed at a cost of Rs 850 million.
It was funded by a soft loan of 41 million euros from the government of Netherlands and the government of Sri Lanka.
The Dikkowita Fishery Harbor was constructed to replace inadequate berthing facilities at various locations in the Negombo lagoon.
The new fisheries harbor, which stands on an 8.1 hectare area, consists of two terminals for local and international operations has the facility to process 150 metric tons of fish and export them directly to buyers from the Bandaranaike International Airport, Katunayake, said Fisheries and Aquatic Resources Minister Rajitha Senaratne.
He also said the harbor can accommodate 490 vessels — 350 local and 140 foreign vessels.
Dr. Priyath B.Wickrama, chairman, Sri Lanka Ports Authority (SLPA), said: “Colombo’s Port expansion, which commenced in 2008, is well on track and it is expected to attract more than Rs. 3 billion investments within three years.”
Sri Lanka’s ports sector is expected be a key economic driver in the future with new opportunities opening up from African countries and the East Coast of India toward Europe and US and the Far East as well.
Another flagship tourism infrastructure development project is the construction of the Hyatt Regency Colombo Hotel. Work commenced in the middle of last year.
The 20-billion-rupee hotel project comprises 475 guest rooms and 90 residential suits.
It is being developed by Sinolanka Hotel and Spa (Pvt) Ltd. and a major share of the required capital for the project will come from Sri Lanka Insurance Corporation.
A senior official from Sinolanka Hotels and Spa (Pvt) Ltd. says the rest of the capital is expected to be obtained from international development agencies.
The hotel complex is scheduled to be opened by the beginning of next year and residential suites will be operational by August, 2014.
The project will be developed as a five-star hotel complex with modern amenities and facilities and will comprise 43 floors.
Once it is completed, Hyatt Regency Colombo will be the tallest hotel complex in Sri Lanka.
Several international brands including Shangri-La, Sheraton and Sun City have already signed agreements to invest around $ 2 billion in hotel projects in Sri Lanka.
Sri Lanka signed its largest ever Foreign direct investment (FDI) deal last year at a value of $ 4 billion with Sri Lanka Gateway Industries (Private) Limited.
Gateway Industries, which is an Indian venture, is responsible for overlooking the operations and management of a special industrial zone for heavy industries in the Trincomalee district.
The project includes the development of a deep water jetty, a bulk commodities terminal with stockpiling and blending capabilities, a power generation plant and a host of other heavy Industries and complementary industries.
More than $ 4 billion will be invested in three phases.
This project will open opportunities for many export/import markets in the Asian, African, Australian and American continents, and provide a strategic access gateway to satisfy the growing demands of the Indian market.
In addition to the above, the Trincomalee region is likely to benefit from direct and indirect employment opportunities, social and community development and creation of new skills during the construction and long-term operation of the project.
According to the Board of investment, the project is expected to create more than 5,000 direct employment opportunities and over 20,000 indirect employment opportunities.