Clean Sri Lanka is a lost golden opportunity for tourism: Jetwing Hotels Chairman Hiran Cooray

The tourism sector has been through a grueling few years, forcing hoteliers to rethink how they attract high-spending travelLers, manage soaring local costs, and execute real estate strategies. Finding a sustainable path forward requires a balance of aggressive destination marketing, fiscal discipline, smart capital deployment, and broader national reforms. A pivotal development was the ‘Clean Sri Lanka’ initiative, which Jetwing Chairman Hiran Cooray argues is a lost golden opportunity to structurally reposition the island as a pristine destination. Sitting down for a wide-ranging interview with Mirror Business recently, Hiran Cooray and Heshan Cooray, Director of Marketing & Development at Jetwing Hotels, discuss the current state of tourism, the structural bottlenecks crippling formal operators, and Jetwing’s calculated asset strategies. From the economics of scheduled carriers versus charter flights to the revival of suspended real estate developments, they lay out the stark operational realities on the ground.

QThe tourism sector has been on a roller-coaster recovery path, shaped by macro adjustments and international conflicts. How do you read the current industry sentiment?

Hiran Cooray: To be perfectly honest, I am not fully aware of every single thing happening everywhere across the country right now. I am somewhat semi-retired, which lets me focus on the specific projects and aspects of the business that I truly enjoy. But looking at the overall picture, the trade is recovering from a very difficult period down to the war.

The sentiment right now is one of cautious optimism. Tourism is completely exposed to global geopolitics, but with the fighting coming to an end, oil starting to flow again, and jet fuel prices coming down, people will start moving in larger numbers. The confidence levels should definitely come up again.

Hiran Cooray

Heshan Cooray

QOccupancy levels have shown visible volatility over the past few months. How did the mid-year off-season perform, and what do the numbers look like across the cycles?

Hiran Cooray: The months of May and June were somewhat low, which is typical for the off-season. However, July onwards looks fairly promising. We are seeing a steady resumption of interest, but the booking window has shortened significantly. Guests tend to book much closer to their travel dates now.

Heshan Cooray: To look closely at the numbers, external geopolitical shocks hit us very fast. For instance, the recent Middle East crisis had a direct impact on our rooms, specifically in March. January and February were fantastic—we were averaging close to 90 percent occupancy across the group and everything was going smoothly. We were expecting that momentum to carry through into March, and the bookings were on the books.

However, we faced a wave of last-minute cancellations simply because of regional flight cancellations. We ended up wrapping up March at about 65 percent occupancy. You can’t complain, but we lost out on a really good chunk of business. Otherwise, we would have easily hit 90 percent across the group.

QThere is a widespread narrative that our source market mix has permanently shifted away from Western Europe toward lower-spending regional markets. Is that what you are seeing?

Hiran Cooray: Not necessarily. It is easy to look at short-term arrival surges and assume a permanent shift has occurred, but that is not accurate. If you look at the arrivals data, India remains our number one market due to proximity, but the UK firmly holds the number two spot. So you cannot say the mix has changed completely.

Western Europe remains a critical market segment for us. Don’t forget we are an island nation surrounded by beaches; because of this, destinations like Europe, the Americas, and Australia will always remain core pillars. While India will likely remain at the top and China will come very close to the number two position as outbound travel normalizes, our long-haul markets are vital for our yield. The UK is holding strong because of historic ties and deep familiarity. These long-haul tourists stay longer and spend more on the property.

QA major point of contention right now is connectivity. There is a sharp debate on whether the government should incentivize charter flight operators from Eastern Europe to build immediate volume. Where do you stand on this?

Hiran Cooray: I am completely against giving incentives to flight operators. It should be a strictly commercial decision for them based entirely on whether they find Sri Lanka attractive. I would much rather market the destination. I would rather go and promote Sri Lanka in different countries to bring scheduled airlines back.

Why not focus on getting Lufthansa, Air France, or KLM here? Why must we give incentives to a charter operator just to bring cheap tourists? If KLM, Lufthansa, and Air France are coming, they are bringing in quality tourists. I am completely against giving incentives to charter operators. If you position and market the country properly, you do not need to subsidize charters. Charters are what we relied on back in the 1970s and 1980s; we should not be going backward.

QWhy are scheduled airlines considered a superior alternative for long-haul growth compared to charter operations?

Hiran Cooray: Airlines like Emirates or Qatar Airways already operate five to six flights a day to the island, proving that there is plenty of connectivity available. Scheduled airlines bring in travelers who pay full room rates, spend on food and beverage, and explore local excursions. When major scheduled airlines fly into the country, it sends a powerful signal of safety and premium positioning to the rest of the world. Subsidizing cheap charter operations directly dilutes that brand equity.

QTo make that organic model work, what is missing from the current approach to global destination promotion?

Hiran Cooray: What is missing is a clear understanding of premium brand positioning. Look at how the world’s most successful flag carriers market themselves. When Singapore Airlines, Emirates, or Qatar Airways run global advertising campaigns, they feature their first-class suites, their luxury lounges, and their business-class cabins. They do not feature economy class in their main advertisements, even though economy seats make up the vast majority of their actual volume.

The lesson for national destination marketing is identical. We must market and promote the absolute best of what the island possesses—our finest luxury properties, culture, tea estates, and the beaches. When you lift the global image of the destination, you automatically lift the perceived value of the entire product line. This allows hoteliers to raise pricing across every tier, benefiting the entire economy. If we position ourselves as a cheap destination, we will only attract cheap travellers, and our earnings will stagnate.

QOperating costs for hoteliers have risen sharply, driven by local inflation and taxes. How severe is the regulatory and tax burden on formal operators?

Hiran Cooray: The operational environment has become exceptionally punitive for compliant hoteliers. Bureaucracy and administrative red tape actively stifle growth. For instance, even for a simple project like restoring an existing heritage house or adding a small swimming pool at our property in Kosgoda, we had to wait over eight months just to clear local approvals. On top of this, the lack of a level playing field between the formal and informal sectors is severely damaging the industry. The formal hospitality sector is heavily taxed, while a massive informal sector operates completely under the radar with zero tax visibility, paying domestic residential rates for utilities while escaping all statutory levies.

Heshan Cooray: This lack of parity creates a major friction point with international travelers. One of the most frequent complaints we receive from guests is that formal hotels and restaurants charge them significantly higher prices compared to informal street operators. We have to explain to them that a fully compliant business must add substantial statutory taxes and service charges to every single transaction, whereas informal operators evade these entirely.

Any decent restaurant or bar is making over Rs. 100,000 a day in revenue, but the majority of them are not registered for VAT or accounting for it properly. The people who do it properly are being penalized. To make matters worse, local government authorities and Pradeshiya Sabhas have begun demanding a tax of 1 percent on total top-line revenue specifically from registered hotels. In contrast, massive commercial banks or retail operations in the same town only pay a flat licensing fee of around Rs. 5,000 per building. This directly discourages clean investment.

QThe government launched the “Clean Sri Lanka” campaign with significant media attention. From a hotelier’s perspective, has this initiative translated into real structural change on the ground?

Hiran Cooray: The project was launched with significant fanfare, but unfortunately, it has since died a natural death. I strongly believe that a nationwide cleanliness and regulatory enforcement campaign must be executed with absolute discipline. We had a golden opportunity to structurally reposition the island as a pristine destination—not just environmentally clean, but clean for business: ethically clean, financially clean, and structurally transparent. If the government wants to see real results, it should choose a primary tourism hub like Negombo and transform it into a model clean city. Empower the local municipal council, clean up the beaches, and enforce zoning laws so that other places can follow.

QGiven this difficult operational climate, what was the decision behind resuming the long-delayed condominium project in Negombo?

Hiran Cooray: Our condominium project in Negombo was originally conceptualized and approved nearly six years ago. However, the timing ran into an unprecedented sequence of disruptions: first the Easter Sunday attacks, then Covid, and finally the domestic economic crisis. The project had to be shelved as we preserved capital to protect our existing operations and staff through those difficult years.

With the macro economy stabilizing, the project has officially cleared its regulatory hurdles. We are resuming development and expect to break ground on construction within the next six to twelve months. The project will feature a premium 112-unit residential complex situated directly on the prime Negombo beachfront, offering a versatile mix of one-, two-, and three-bedroom serviced apartments. Owners will have the option to reside in the units themselves or place them back into our inventory to be managed by Jetwing on a profit-share basis, giving us a dynamic model to scale our footprint without heavy capital expenditure.

QJetwing Symphony owns a prime land bank on the East Coast in Uppuveli, Trincomalee. What are the long-term plans for that asset?

Hiran Cooray: We have 19 acres of land in Uppuveli. While we recognize the long-term potential of the East Coast, we have taken a deliberate decision not to rush into construction there for at least another two years. It will take at least two years to start construction, and that timeline is tied directly to infrastructure development.

The realization of the East Coast’s true tourism potential depends heavily on central road connectivity. Once the highway network is fully linked up to Kurunegala, through to Dambulla, and down to Trincomalee, it will create a seamless four-hour drive to Trincomalee. Tourists visiting the island will be able to seamlessly integrate the East Coast into their travel itineraries, moving from Kandy through the Cultural Triangle and straight to the beaches of Trincomalee. We will hold deployment until those transport links are closer to completion.

QJetwing operates a mix of publicly listed entities and privately held hotels. How do you weigh the operational freedom of remaining private against the advantages of a public listing?

Hiran Cooray: Well, obviously if it’s private, decision-making is faster, right? There are less complications and less of these formalities, governance issues, and various other things. The freedom to operate is much better. But the advantage of a public company is access to capital and a better public image—all those things are there, so it’s a give-and-take.

Our existing, older hotels will not be listed; that was a clear decision made a long time ago by the founders to keep them in the family. But Jetwing Symphony is our vehicle of growth, so all the new large-scale projects will come under the public entity.

QIn the interim, you have shifted a significant portion of your development focus toward an alternative model involving heritage properties. What is the rationale behind this?

Hiran Cooray: One of the main things we are doing right now is buying heritage, abandoned homes, and restoring them. We are restoring them in Jaffna, Negombo, Galle, Kosgoda at the moment, and eventually in Matara as well. We look at old abandoned homes with a lot of history, heritage, and then we restore them and use them for tourism.

These properties typically feature just three to four premium rooms per house, allowing us to command excellent room rates due to their unique character. We have so much vernacular architecture that is currently falling apart, getting destroyed, broken down, and rebuilt. So we are trying to bring them back into vogue. We evaluate these unique properties as they surface rather than adhering to rigid volume targets.

QHeshan, could you take us through the design philosophy and strategic intent behind the group’s latest lifestyle project, the Negombo Bamboo Club?

Heshan Cooray: The Negombo Bamboo Club is a standalone day venue and beach club located right next to Jetwing Blue on the Negombo beachfront. From an architectural standpoint, it is a pioneering sustainable development for the country. It is the first major commercial project of this scale built utilizing 100 percent locally sourced and treated Sri Lankan bamboo as its primary structural material.

Our hope is this becomes a model for others to look at and copy. Traditionally, developers looking to build bamboo structures have imported all their raw materials and engineering expertise directly from places like Bali. We deliberately broke away from that model to build a local supply chain. We partnered with a local innovator who treats indigenous bamboo to meet strict commercial construction standards. This approach creates a new sustainable agro-industry locally, moving away from carbon-heavy steel and concrete. The venue will operate as an independent day club featuring an expansive pool, lounge areas, and open-air dining decks, functioning as a standalone profit center independent of the main hotel rooms.

QFinally, how is the formal hospitality trade coping with the current human capital crisis, given the high rates of skilled migration out of the country?

Hiran Cooray: The migration of skilled hospitality professionals to the Middle East, the Maldives, and Europe is a major operational challenge, but we look at it through a balanced lens. Sri Lankans are naturally talented and highly sought after globally. While losing skilled staff to overseas markets creates short-term operational gaps, it also functions as an excellent long-term training cycle.

Many young professionals go abroad, work for two or three years in top-tier global environments, and eventually return to the island with world-class skills and international experience. We have no issues with a youngster wanting to go to the Middle East for two to three years to earn some extra money and come back. At Jetwing, we have adjusted our human resource strategy to focus heavily on continuous, grass-roots vocational training. By training local youth from rural communities, we keep our talent pipeline full while supporting local employment. The talent is organically there; we just need to keep refining it.