Caring for new investments for a better tomorrow
SRI LANKA this week has seen new investors cutting the first sod for several of many new hotels to be built. As reported on today’s front page, construction of the world renowned Shangri-La’s much reported luxury hotel commenced in Colombo whilst today a similar exercise will take place in the deep South for its resort in Hambantota. The combined investment for these two projects is nearly $ 700 million and they will add 976 rooms to Sri Lanka’s start-class portfolio from 2013 onwards.
In a separate development, Sino Lanka Hotels Holdings, a joint venture between Sri Lanka and Thailand investors yesterday announced a Rs. 4.5 billion investment plan for Sri Lanka at the ground breaking ceremony of its first city hotel OZO Colombo. Under OZO, three hotels are set to come up 2013 in Colombo, Galle and Kandy. The investment for the three hotels, which will add 410 rooms in total to the country’s room inventory in 2013, is Rs. 4.5 billion.
These new developments are part of the country’s efforts to have around 20-25,000 additional rooms by 2016 to cater to an estimated 2.6 million tourists from the current 800,000 arrivals and room stock of around 12,000. There are estimates that the additional room requirement will need $ 3 to 4 billion in new investment.
Since the end of the war three years ago, new buildings in the leisure sector had been slow to take off. This was largely due to land issues as well as bottlenecks in approval system across various state agencies. However of late, after some degree of streamlining, several new projects have got off the ground. Considering the fact that even a highly facilitated project like Shangri-La took nearly two years to take off, it is easy to understand the delays faced by ordinary investors who are keen either expand or enter into the tourism industry which has shown considerable rebound following the end of the conflict in May 2009.
The ground breaking ceremonies of Shangri La projects in Colombo and Hambantota are also a major breakthrough for the Government as there were doomsayers who said the flagship investment won’t take place. True the project faced many hurdles, in addition to causing the wrath of the Opposition initially.
It is in every one’s interest to ensure tourism development in Sri Lanka is supported and in the political arena a bipartisan approach is much needed. However for this to be a reality, future strategy and developments must be carefully planned after a thorough consultative process with all stakeholders. Whilst it is foolish to expect an across-the-board consensus on all issues, unfortunately the score card is a mixed one with regard to this important aspect.
The industry and professional bodies are not consulted on a regular basis and unlike the apparel industry, the travel and tourism community is divided with the latter exposing itself and results in a divided voice over the way forward.
The planned amalgamation of state run tourism organisations has been on the cards for a long time and hence must be expedited. In the new structure, the Government must give the private sector its due place. Going forward, a more united private sector in the tourism industry will serve its cause for greater recognition and consultation when shaping development and regulatory policies and plans.
Amidst global and local shocks, new investments in tourism or any sector from foreign or local entrepreneurs must be treasured.
Given the existing and future challenges, Sri Lanka needs new investments especially Foreign Direct Investments (FDIs) in large numbers. As far as tourism is concerned, a more sustainable future both in terms of capacity and the destination is critical. Tourism has the best potential for Sri Lanka to achieve equitable socio-economic growth and empower communities provided it is done with care and foresight in a dynamic consultative process.
If not, the billions invested today by the Shangri-La’s, Onyx’s and plethora of local blue chips and others will be a sheer waste for the mother Sri Lanka.
