Hospitality Industry in Sri Lanka - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Hospitality Industry in Sri Lanka - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The highly diversified landscapes and natural attractions in Sri Lanka have been welcoming a growing number of visitors to the country. The total tourist arrivals to Sri Lanka in 2018, amounted to more than 2.3 million, which welcomed 2.17 million in 2017. The revenue generated through travel and the tourism sector remained a high contributor to the national economy, with a contribution of 5.1% towards GDP for two consecutive years i.e 2017 and 2016. in 2017. The earnings from the foreign exchange from tourism sector increased to 15.9% of total foreign exchange earnings in 2017. In order to accommodate the increasing number of visitors, Colombo has more than 14 hotel construction projects in the pipeline that are scheduled to be opened by 2022. This pipeline targeted the luxury segment of the hotel market and aimed to add around 2,000 rooms to the supply and less focused on budget and mid-scale segment with around 600 rooms that are going to be added to the supply. The country recorded average daily revenue (ADR) of LKR 20,500 in 2018 and LKR12,300 of revenue per available room (RevPAR). Sri Lanka recorded around 60% of the occupancy rate for the same year but due to the Easter terror attacks in April 2019, all the key indicators recorded fewer figures when compared to 2018.

Key Market TrendsSri Lanka is Recovered Quickly from Easter Terror Attacks and is Attracting More Tourists

Terror attacks on Easter in April 2019, cost Sri Lanka to lose a 70.8% decrease in tourist arrivals and made to record the lowest number of arrivals of around 37,000 in May 2019 and caused a huge gap to the percentage change for the same month in 2018. Yet, the country managed to bounce and regained its momentum over time in tourism arrivals. The percentage change in arrivals between 2018 and 2019 was around 57% in June, 46.9% in July, 28.3% in August, 27.2% in September, 22.5% in October and 9.5% in November 2019. Indians occupy the highest share of foreign visitors to Sri Lanka followed by China, United Kingdom, Germany and Australia with making around 20%, 11.3%, 10.9%, 6.7%, and 4.7% respectively of total visitors to the country.

Kuchchaweli Beach Resort Tourism Zone has been Attracting More Investments

With the destruction that happened to Sri Lanka due to the 2004 tsunami, the Sri Lanka Tourist Board has introduced the concept of tourism zones that are open for investments. Developing these zones will help the country to generate revenues and are open to foreign investors as well. Out of all the Kuchchaweli Beach Resort has gained momentum and is attracting more investors to date as the landscapes that the location offer has more ability to attract visitors. This zone is located at Eastern province which is 300 km away from Colombo. This zone has 445 acres of land that is available for investors at a price of 20 million per Acer. Sri Lanka Tourism Board is offering 99 years leasing period. A hotel is already in operation at this location with 4 under construction hotel projects.

Competitive Landscape

The hospitality industry in Sri Lanka is experiencing fierce competition across all segments ranging from city hotels to resorts and beyond. However, the location and architecture of the hotels are expected to act as a differentiator for the brands. Further, major brands such as Jetwing Lighthouse are investing more in training programs for its employees to enhance customer satisfaction ratio, sustainability initiatives and creating new experiences.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

Companies Mentioned
 
BSH Hausgerate GmbH
Whirlpool Corporation
Haier lnc.
AB Electrolux
Panasonic
Dongbu Daewoo Electronics
LG
Sub
Zero
Samsung
Fotile
Robam
Midea
Others (Instant Pot and Keurig)

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