Current Challenges for Sri Lanka Tourism

There should be some kind of capital recycling. Investors with stronger financial sheets and management should be permitted to take over companies that are struggling. The government should reconsider restrictions that prevent local and international investors from restoring assets that are dysfunctional or insolvent. Taxation concerns linked to private equity funds, the lack of Limited Liability Partnership legislation, and limits on foreigners buying properties are all possible examples of these regulations.

The government should also be flexible in how it applies labor regulations relating to retraining and redeploying those who are about to lose their employment. “Rather of handing out freebies, the government could engage people in micro-projects that will strengthen the tourist sector when it recovers.” The government should also seek help from organizations such as the World Bank. For example, the World Bank suggested a $100 million grant for a sustainable tourist development project, which might be redirected to these micro-projects.”

The tourist business is very vulnerable to crises, and tourism demand is heavily impacted by a destination’s economic, social, environmental, health, and political factors (and source markets). The tourist sector has faced several problems throughout history, the most recent of which being the COVID-19 epidemic, which brought the industry to a near-complete halt. International arrivals to Sri Lanka gradually increased after a two-year period of modest recovery, beginning in September 2021. However, the recent economic downturn has begun to have an influence on this recovery.

The economic crisis’ ramifications have begun to extend, creating serious difficulties in how Sri Lanka’s tourist sector operates and provides a positive visitor experience. The tourist sector in Sri Lanka faces yet another problem as a result of the present foreign currency crisis and price spikes, as well as a lack of necessary products such as gas and fuel. The industry’s whole supply chain has been impacted, with firms struggling to keep up with day-to-day operations.

Import restrictions implemented as a result of the foreign currency crisis have further hampered the tourism industry’s capacity to offer goods, services, and experiences to visitors. Inflation has resulted as a result of decreasing supply of commodities and increasing consumer demand, with prices for vital items skyrocketing. Rolling power interruptions exacerbate these problems.

As with other analogous crises throughout the globe, the present issues in Sri Lanka may result in substitute tourism. There are several instances from throughout the globe that demonstrate the tourist industry’s resiliency and capacity to recover. However, given that we are in the midst of an economic downturn, it is too early to estimate the effect on the tourist sector and Sri Lanka’s tourism economy numerically. Nonetheless, the tourist industry’s future success will be determined by the country’s economic and political stability.

While COVID-19 looks to be behind Sri Lanka in terms of events, the country’s deteriorating economic condition has placed a pall over-tourism. The government’s efforts to maintain its limited foreign currency reserves, such as limiting food imports, have had a significant influence on the supply of vital products.

Due to import limitations and growing costs of local food goods, some restaurants have had to shut down for days due to the gas scarcity; others have had to delete or decrease their menu selections. Tourists find it difficult to understand the power outages. They understand our suffering, but no one wants to come on vacation and wait in the dark and heat.