By Chandeepa Wettasinghe
Sri Lanka Tourism Development Authority (SLTDA) will be introducing regulations and providing greater support to small scale accommodation providers who have been the fastest growing segment in the country’s hospitality industry, according to a
“We are looking at smaller properties—how to support these smaller properties to come up to some standard. So these regulations are being brought up so we will be having training programmes on how to conduct and manage their properties,” Sri Lanka Tourism Development Authority (SLTDA) Chairman Paddy Withana said.
Speaking at a media briefing recently, he said that the government will be conducting research and managing supply chains in order to ensure that communities that are close to tourism hotspots receive benefits from the industry.
Costa Rica is considered as the global benchmark in community-based tourism planning, where bottom-up planning, coupled with access to technical expertise and financing had helped communities in the Central American state gain greater economic strength with minimal invasion of the natural environment.
Withana said that in addition to knowledge transfers, the central government, in collaboration with local governments will be providing financial support for small scale tourism businesses to improve their operations.
“In our plan this year will be a lot of poverty alleviation under the President’s vision. Tourism can be an industry that could help this area,” Withana further added, and also went on to say that sustainability is also a key aspect of SLTDA’s plans this year.
To what degree the community will be involved in the government’s tourism planning in bringing benefits to the community remains to be seen, since the government’s Tourism Advisory Council consists entirely of CEOs and Chairpersons of large scale tourism and hospitality companies. Over 80 percent of Sri Lanka’s businesses are small and medium scale, and the tourism industry has been late in transitioning to this balance.
In 2015, nearly 51 percent of the tourists coming to Sri Lanka had stayed in informal and supplementary establishments—industry sectors that are dominated by small and medium scale businesses—up from 37 percent in 2010, which had led to a supply glut in graded hotel accommodation. Influenced by corporate lobbying, the government last year announced its intentions to tax and regulate the online tools the small scale operators, almost exclusively, use to create business.
Small accommodation units were also brought under a 0.5 percent Tourism Development Levy. Most operators in the informal and supplementary sector had in the past not usually fallen into such national tax brackets, as confirmed by SLTDA officials. However, the state, which is hard pressed to make its ends meet, may be looking at further increasing taxation on the small scale tourism businesses, since Tourism Development, Land and Christian Affairs Minister John Amaratunga complained that these businesses do not
pay taxes. Meanwhile, the large scale hoteliers were treated to a Rs. 500 million fund which it could use to subsidise the interest components of credit drawn for refurbishment.