Informal tourism sector continues to grow despite snags

Tourist stays in unregistered accommodation grew by 37.53 percent Year-on-Year (YoY) for 2015, but recorded a slowdown compared to 2013-14, official data from the Sri Lanka Tourism Development Authority 

(SLTDA) showed.
Foreign tourist nights in unregistered accommodation units increased to 4.87 million in 2015, from 3.54 million nights YoY. The growth had been 192 percent YoY from 2013 to 2014.

The Sri Lankan luxury hotel lobby is generating intense opposition against both unregistered and budget accommodation, pushing the Tourism Development, Land and Christian Affairs Ministry to have all accommodation registered and to grade all registered tourist hotels.

Further, it has pushed the Finance Ministry to try and regulate the online avenues through which unregistered and budget accommodation bookings are generated. While the motivations of the hotel lobby may not be altruistic, minimal regulation would increase the revenue the state gets, in addition to improvements in service and management standards.

However, stronger regulations may push these low-end establishments to close shop.

Tourist nights in hotels amounted to 8.95 million in 2015, growing 12.06 percent YoY. Supplementary accommodation, which includes registered homestays, guest houses, bungalows, etc. recorded 4.35 million guest nights, increasing 20.9 percent YoY.
The market share of hotels declined to 49.2 percent from 52.8 percent YoY, while the market share of  unregistered accommodation increased to 26.8 percent from 23.4 percent YoY, and supplementary establishments increased their market share to 23.9 percent from 23.8 percent YoY.
The 1.8 million tourists that visited Sri Lanka in 2015 with a 17.8 percent YoY growth had generated 18.16 million tourist nights, which grew 20.14 percent YoY signifying the increase of the average duration of stay from 9.9 nights to 10.1 nights.
Those staying in unregistered and supplementary accommodation are considered to stay in Sri Lanka for longer periods of time.

Western Europeans stayed in Sri Lanka the longest in 2015 with an average duration of stay of 14.5 against 14.1 YoY.

Asian tourists stayed an average of 7.4 nights compared to 6.5 nights YoY. Tourists from the largest single market India stayed just 5.8 nights, increasing from 5.3 nights YoY, while Chinese tourists stayed 9.5 nights, declining from 9.8 nights YoY.

In spite of the growth of unregistered accommodation, average tourist spending per day increased to US$ 164.1 from US$ 160.8 YoY.