Sri Lanka sees major tourism industry investment

Sri Lanka, following the long and devastating civil war, which lasted around two and a half decades, is now making renewed attempts to redevelop its tourist industry. The industry is extremely import to the economy of Sri Lanka and is a vital part of the country’s access to foreign currency reserves, but saw marked declines in tourist arrivals during periods in which the ongoing civil war was perceived to be increasing in intensity and violence.

In the beginning of 2008, Sri Lanka news reports revealed that the number of tourist arrivals to the country had dropped by over 5% compared to 2007, this was due to a spate of attacks and a general lack of security that had been broadcast across the world to countries such as the UK, US, Canada, China and India, the main countries from which tourists visit the country.

In addition, short-term tourists, brought into the country by cruise ships calling in at the country’s ports, are also a major pillar of the market, but there was a decline here too during the fighting, as large slow moving cruise ships were seen as too easy a target for terrorist attacks while navigating off the coast or docked in port.

The government feared the bad publicity that such an attack might bring upon the country, while cruise lines were deterred by the massive insurance premiums that had to be paid if a cruise ship were to call at a port in a ‘war zone’. But, now that the civil war has come to a close (a major achievement for Sri Lanka in terms of world history), the country is seeing revived interest from the cruise sector.

“Now that the war is over we’ll get many cruise vessels which had not been calling Colombo port earlier,” Mohan Pandithage, chairman of Hayleys, a group with significant shipping interests told Sri Lanka news media, adding that major cruise lines that operated in the Indian Ocean were making enquiries as to scheduling ports such as Colombo.

Due to the nature of the shipping industry, ports of call are typically arranged well in advance, usually two to three years at least, so this signals a change that may only be felt in several years time, but gives local government in the country time to prepare the infrastructure needed to handle the larger ships that will be visiting the country.

Cruise terminals need to be expanded and bigger docks built, while local companies such as tour providers need to invest in modern busses and facilities to cater to the high-end cruise market. These requirements are especially true of the southern port of Galle. The Sri Lankan government has made clear its intention to significantly redevelop the small port in order to cater to large cruise ships.

This will involve deepening the port to accommodate the deep draft of the vessels so that they can navigate to the wharf and dock at the cruise terminal.

“When a large vessel comes by, they have to dock mid-stream and transfer passengers to the jetty on ‘tender boats’,” said Tony Mantara, who is the Chairman of the travel trade Advisory Panel for Cruise Tourism. He added that the redevelopment would involve investment in human capital as well as infrastructure, for more tour guides are needed and their English needs to be improved. In addition, over 90% of the tour busses operated in Galle are more than ten years old and need to be replaced in order to meet the needs of wealthier Western cruise passengers.

This is part of a plan then to not only bring cruise tourism back to Sri Lanka, but to attract the luxury segments of the market to the country, which will see more foreign exchange injected into local economies.

Oceania Cruises, ResidenSea, AIDA Cruise and Costa Cruises are among the thirty or so new cruise lines enquiring about port stops in Sri Lanka and the government has set a goal of 130 visits by cruise ships within the next few tears, taking the yearly rate back to what it was before the conflict began to deter cruise lines. Carnival Cruises, Swan Hellenic and Crystal Cruises are already regular visitors to the country with around 60 to 70 cruise ships visiting the island currently.

The government’s plans for cruise tourism expansion are complimented by the general upward development of the tourism industry, which has prompted investment in overland travel infrastructure as well. It was recently reported by Sri Lanka news  media that a high-speed rail link is to be built between Colpetty and the Katunayake Airport, currently the only international airport in Sri Lanka.

The railway is being developed at a cost of around US$100 million and will be funded through Malaysian and US business interests. The rail line will be capable of carrying over 2000 passengers per day between the airport and Colpetty, which will also see a five star hotel built near the railway station, as well as a large shopping complex overlooking the beachfront area.

Airport Express Lanka Ltd is the company set up to operate the railway and according to news reports, the company is expecting to see a return on its investment within the next 15 to 25 years on the back of strong expected growth in international tourist arrivals.

Major yacht charter agencies, such as International Yachts Collection, LLC are also adding Sri Lankan vessels to their portfolios following the ceasefire, in a bid to encourage international tourists to visit the country and cruise its waters.

Although international tourism is the major revenue generator in Sri Lanka, there have been some significant developments in the local tourism sector as well. The Sri Lankan Navy recently began operating the massive Jetliner on short evening dinner cruises out of Colombo.

The Jetliner is a large passenger ferry, which is powered by water jet engines and is capable of carrying 600 passengers and 160 cars. The vessel was used as a transport vessel during the war, but has now been converted for passenger use and is proving popular in the capital city. Operated by the Sri Lankan Navy, the ship features luxurious passenger areas, a well-appointed dining room, outdoor dining and dancing and music by the Sri Lankan Naval Band.

Although she currently only cruises for several hours at a time in the evenings, it is a step towards full-time cruise duties, perhaps venturing out on short two or three day cruises around the island and even further afield to nearby tourist destinations in India and the islands of the Indian Ocean.