29 Nov 2016
AHTIC Conclusion: Sri Lanka brims with potential but success depends on political leadership
The first Asia Hotel & Tourism Investment Conference (AHTIC) concluded today in an atmosphere of optimism moderated by caution. Over the past two days several of Asia’s leading hotel investors from 19 countries discussed the investment potential of Sri Lanka and other destinations around the Indian Ocean from Mauritius and the Seychelles to Malaysia and Vietnam.
Data from ForwardKeys demonstrated that Sri Lanka deserved congratulations for achieving 12% growth in visitor arrivals by air during the past year, more than double that achieved by the Asia Pacific region as a whole. Further information from STR revealed that at the same time, the country’s hotels had maintained occupancy levels above 66% and succeeded in lifting average daily rates to nearly 16,000 Sri Lankan Rupees, more than US$100 at today’s rate.
Several serious investors, including a delegation from China, expressed enthusiasm for opportunities in Sri Lanka, citing its tremendous variety of attractions, such as ancient temples, wild elephants and unspoilt beaches, all within close range of each other. Other attractive attributes of the country were seen to be the good-natured ‘smiley’ demeanour of the people, the safe feeling one had walking the streets, even at night, a shortage of high-quality properties outside Colombo, the willingness of the government to invest in core infrastructure such as new roads and a British based legal system.
The Sri Lankan government, keen to attract international finance, announced a series of tourism development zones and the President promised that the next three years, 2017-19, would be investment years with special concessions to overseas investors; although the precise details have yet to be clarified.
Gerald Lawless, Chairman of the World Travel & Tourism Council and former Executive Chairman of Jumeirah Hotels, highlighted some of the factors that make a destination successful, including the outbreak of peace in regions previously suffering from conflict, air connectivity, visa waivers and dedicated promotional initiatives aimed at major origin markets, infrastructure investment, an ethos which encourages genuine collaboration between business and government and a compelling vision of the future. He cited Sheikh Mohammed, the Ruler of Dubai, as a truly visionary head of state who had transformed that destination into the vibrant tourism economy it is today.
Counterbalancing the enthusiasm, Roman Scott, Chairman of the Calamander Group, which invests in Asian frontier markets and owns hotels and coffee shops in Sri Lanka, warned that proposed tax increases, lifting VAT from 11% to 15% and corporation tax to 28% would risk killing the proverbial goose that lays the golden egg. Several other countries bordering the Indian Ocean also offered an attractive proposition for investment. His view, which was shared by several industry leaders, was that Sri Lanka’s performance as a tourism economy would turn on the government’s ability to brand and promote the destination effectively, to prioritise development of infrastructure that facilitates connectivity and to create a fiscal and regulatory regime that guarantees commercial as well as social and environmental sustainability.
Dr. Prabath Ukkwatte, Chairman of the Sri Lanka Tourism Club, which was the Founder sponsor of AHTIC, declared the conference a great success and announced publicly that he had confirmed the venue for the equivalent dates in 2017 and that he was looking forward to working with Jonathan Worsley’s Bench Events’ team to deliver a bigger conference next year.