Sri Lanka’s tourism boom will not impact Maldives

COLOMBO, January 19 (HNS) – Sri Lanka’s tourism industry which was once battered due to a long drawn civil war, which ended in May 2009, has once again begun to pick up with the island nation giving way to large scale investment projects focusing on promoting tourism.

With several major hotel and resort chains such as Indigo, Movenpick and Shangri-La taking steps to invest in Sri Lanka, questions have been raised as to whether the current boom in tourism would draw fierce competition between Sri Lanka and its friendly neighbour, Maldives which maintains a thriving tourism industry.

Despite many being under the impression that the current trend in Sri Lanka might threaten the Maldivian tourism sector, several hoteliers in Sri Lanka are of the view that the developments in Sri Lanka would not have much of an impact in Maldives as both countries deal with two different areas of tourism.

Srilal Miththapala, the former President of Tourist Hotels Association of Sri Lanka, and now a Project Director/Consultant at the Ceylon Chamber of Commerce said that Sri Lanka and Maldives are two complementary products and not competitive products.

“It is a misconception to think that Sri Lanka and Maldives will be competing in the tourism industry as both countries offer different products. The Maldives islands and beaches are unique and it draws tourists who like that kind of an environment and in Sri Lanka we cater to a different genre of tourists,” he said.

“Even though both Sri Lanka and Maldives offers beautiful beaches they are both different in so many ways. Therefore the growth and development in Sri Lankan tourism could not have an impact in the Maldivian tourism sector,” he said.

The President of the Colombo City Hotelier’s Association, Shanthi Kumar said that Maldives has their own market and the boom in tourism in Sri Lanka will not affect Maldives due to both countries specialising in different areas of tourism.

“Sri Lanka offers cultural, eco-tourism as well as coastal tourism. There might be times where there is competition between the two countries to attract tourists who go to the coastal area in Sri Lanka. But this will not make much of an impact since Maldives has their own brand to offer. Many tourists who go to Maldives look for an experience that they cannot get in Sri Lanka,” he said.

“Sri Lanka and Maldives are two different holiday destinations that cater to different types of tourists. Maldives cannot offer what Sri Lanka has and the same goes to Sri Lanka. That is the main reason why there wouldn’t be competition between the two countries in the tourism industry,” Siri De Silva, the President of the Association of Small & Medium Enterprises Tourism said.

“Maldives is a place where tourists go to relax, enjoy the blue murky water, go diving and enjoy the aquatic life the islands have to offer. In Sri Lanka the beaches are very different to Maldives. In most cases, tourists spend a few days in Maldives and then they visit Sri Lanka because it has many different things to offer. This has been the situation in the past and with the present development projects coming up in Sri Lanka there is no way the Maldivian tourism industry could get affected,” he said.

“I think the Sri Lankan government and the Maldivian government should work together to promote tourism in both countries. This will be very beneficial for both countries and will strengthen the tourism industry in the region,” he said.

Recently the Sri Lankan government signed an agreement with the Hong Kong-based Shangri-La Asia Limited that announced its acquisition of six acres of government land facing the Galle Face green promenade, a prominent landmark in Colombo to build a luxury hotel complex.

The company announced that the planned development will be a multi-use complex with high-end retail facilities, deluxe apartments and a 500 room luxury hotel to open in early 2014.

The Shangri-La group is also making plans to develop a second property, a 300-key city resort on approximately 100 acres of land in Hambanthota, on the southern coast of Sri Lanka, to open in 2013.

Alongside the Shangri-La hotel project the Sri Lankan government is now making plans to build a mini-city by reclaiming land from the sea next to the Galle Face green in Colombo. They propose to dredge 500 acres from the sea and build the city between the Galle Face Green and the Colombo port.

The city which will be one-third the size of Male will be the first of its kind in Sri Lanka and will also be a commercial hub with twin- towers with around 40 floors, each overlooking the sea and the city.

Sri Lanka is also making arrangements to build a proposed Formula One race track in Hambanthota in order to host F-1 races in Sri Lanka. Building an F-1 circuit is expected to further increase the inflow of tourists into the country which has shot up since the end of the war.

With the current development in the tourism sector in Sri Lanka, several tour operators are looking at the option of diversifying their operations by providing packages where tourists will be able to visit both Maldives and Sri Lanka.

Currently several Maldivian investors that operate luxury resorts and villas are looking into the option of investing in Sri Lanka in order to work out such packages.

Dr. Nalaka Godahewa, the Chairman of Sri Lanka tourism told Haveeru Daily that he has discussed the matter with tour operators to bring about a combined package which will allow tourists to visit both Sri Lanka and Maldives.

“I have spoken to those involved in the industry in Sri Lanka to look into this aspect as it would be favourable for both countries. In my view it will be helpful for Maldivian hotels and Sri Lankan hotels to work together to provide a combined tour package. I don’t see any competition between the two countries as they offer two different products. This could be beneficial in attracting more tourists to Maldives and Sri Lanka if a combined package system is adopted by most hotels and tour operators in both countries,” he said.

Sri Lanka, which had a tourism growth of 46 percent last year in contrast to 2009, is expected to further rise this year.

Online visa scheme programme for Sri Lanka

 
Sri Lanka Tourism Development Authority Chairman Nalaka Godahewa said the Immigration Department has already completed the online visa scheme programme through the web and a pilot run off will be initiated to test the system.
"A minimum of three months will be needed to test the system. However no changes will be made to the prevailing in the country when obtaining visa till the Immigration Department is satisfied with the outcome and effectiveness of the online system", he said.
"The suggestion was made last year to implement an online visa scheme for tourists to promote the tourism industry in the country. Most of them have to go to embassies and collect the requirements in obtaining a visa", he added. Visitors to Sri Lanka from Singapore and the Maldives, which grant Sri Lankan passport holders landing permits on arrival, would be reciprocally exempted from having to obtain a visa before reaching the island.
Sri Lanka currently issues foreign tourists a 30-day visa on arrival since the 1970s as part of tourism promotion.
The tourism industry in Sri Lanka is showing rapid growth since the end of terrorism in May 2009, and the country has been ranked as one of the most popular destinations for tourists in 2010. In the year 2010 more than 620,000 tourists have visited the country and seen a 50 per cent increase in foreign visitor arrivals since May last year.
Sri Lanka hopes to attract over 700,000 tourists in the New Year. The Tourism authorities have launched a campaign announcing "2011 - Visit Sri Lanka Year", he said.

The Colombo Stock Market (CSE) becomes the best in Asia

The Colombo Stock Market (CSE) has become the Asia’s best Stock Market in 2010 with a surge of 96 percent while Indonesia that rose a 46.1 per cent becoming a distant second, the Economic Times reported.

The CSE’s main share index rose 21.74 points to 6,635.87. It has fallen 7.9 per cent since it hit an all-time high of 7,207.75 on Oct. 4 on year-end settlements, profit taking, and liquidity shortage.

“We will not see a similar surge next year, but we will see high activities with over 60 firms in line for listing,” said Danushka Samarasinghe, director at TKS Securities . “We expect 60 per cent rise with better earnings in 2011.”

The year saw a net foreign outflow of 26.4 billion rupees from the bourse, more than twice of last year's net selling of 11.4 billion rupees. On Friday, offshore investors sold a net 15.9 million rupees. The daily average turnover for 2010 was at a record 2.4 billion rupees, more than four times higher than the previous all-time high of last year's 593.6 million rupees. Friday's turnover was 1.3 billion rupees ($11.8 million).

Sri Lanka’s rupee ended flat at 110.94/96 a dollar in sluggish trade, currency dealers said. It has risen 3.06 per cent so far this year.

Sri Lanka third highest investor in Bangladesh

Lanka third highest investor in Bangladesh

Sri Lanka is the third largest source of Foreign Direct Investment in Bangladesh, said Bangladeshi High Commissioner Mahbubuzzamam.

Bangladesh High Commissioner for Sri Lanka Mahbubuzzamam expressed this sentiment when he met Prime Minister D.M. Jayaratne at the Prime Minister's Office. They discussed matters pertaining to mutual relations between the two countries.

During the discussion Bangladeshi High Commissioner Mahbubuzzamam said Sri Lanka is the third largest source of Foreign Direct Investments (FDI) for Bangladesh following USA and South Korea. He said, "Sri Lankan investors are mainly focused on producing leather products, garments and chemicals by investing in Bangladesh and many other projects which are implemented by Lankan entrepreneurs." He also mentioned that trade between Sri Lanka and Bangladesh is not very large and therefore there is huge potential in the future for the two countries to expand its trading activities.

"Trade between the two countries accounts to nearly $19 million, which is not very significant", he said. In addition he mentioned that many Sri Lankan students show great interest in following academic courses at Bangladeshi Medical Colleges.

The Ambassador further stated that there are more than 2, 000 Sri Lankan nationals working in Bangladesh mainly in the garments business.

Also nearly 400 visas are issued per month for Sri Lankans granting approval to enter Bangladesh.

Prime Minister D. M Jayaratne in reply said, "Sri Lanka has now stepped into a new path of development and the government of Sri Lanka appreciates the partnership of Bangladesh in this process". He also stated that it is a pleasure to continue a healthy relationship with Bangladesh especially because it is a member of the SAARC association.

Tourism

Citrus Leisure announces plan to build four star resort in Kalpitiya

Citrus Leisure PLC, formerly Hotel Reefcomber PLC, has  announced that it will build a four star resort in Kalpitiya following the acquisition of 78 acres of land identified as “Santhoduwa-Kalpitiya”. The total investment in the land amounted to Rs. 122.18 million while the acquisition is the company’s second following a change in management earlier this year.

The proposed resort will comprise of 150 rooms and 28 water front villas. The 28 water front villas will be built facing a 50meter-wide waterway which cuts through the land and connects at the end to the sea. These exclusive water villas will have individual gondolas providing the occupants access to the sea. In a unique proposition, the villas will be made available to local and foreign high net worth individuals on the basis of a 99-year lease.

“Our decision to enter Kalpitiya is a strategic one that considers the area’s vast untapped potential to become a tourist hotspot. Kalpitiya is one of the zones being targeted in the government’s new vision for tourism and Citrus Leisure PLC is excited to be a flagbearer in the emergence of Destination Kalpitiya”, Chairman of Citrus Leisure PLC, Prema Cooray said.

The purchase of the “Santhoduwa-Kalpitiya” land is the company’s second major acquisition following its purchase of a 7.2 acre beach property in Waskaduwa, where construction will begin in early 2011 on a 150 roomed 4-star property.

Esna Villas to build luxury boutique hotel in Nilaveli

Esna Villas, a company fully owned by Esna Holdings, has invested in a beach property on Nilaveli beach, Trincomalee, with a beach frontage of 144 feet.

This project, which is valued at US$ 1 million, is the company’s first foray into the leisure sector. The  company  plans  to  set up  an  ‘all  suite’ boutique  hotel on the  property with  construction already in progress.
Chairman of Esna Holdings Eshana De Silva observed that this project included a ‘Presidential Villa,’ which has a private swimming pool with all the luxury amenities of a five-star property.
“We are very excited as this would be the only project of this kind in Trincomalee,” he added.
Sri Lanka has seen a massive influx of tourists after the much-anticipated post-war tourism boom.
Esna Villas plans to set up similar boutique hotels in other prime tourist locations around the island, with there being little doubt that projects such as these are vital in post-war Sri Lanka.

Why Mongolia and Sri Lanka are top of the stock markets

If you had invested in a tracker fund at the start of the year, which of the world's stock markets would have done the most for your pound? China, or somewhere nearby? How about one of the resource-rich economies of Latin America, growing fat on the commodities boom? The answer is none of the above (and you would have lost money in China, where the rather overheated stock market went into a sharp reverse). No, the winner of this year's stock-market crown is the Mongolian Stock Exchange in Ulan Bator, although resources are largely the reason for its victory. Opened in 1991, the world's smallest stock exchange by market capitalisation has gained a stunning 187 per cent so far this year (in sterling terms), and a still impressive 136 per cent when measured in the local currency, the tugrik.

However, actually investing a pound there is something of a challenge. According to data from Bloomberg, this year's best-performing stock market, to which you could more easily gain some exposure, has been that of Sri Lanka. Had you invested a pound in the Colombo market at the start of the year, your money would have turned into £2.07 at the close of last week. Investors in the local currency, the Sri Lankan rupee, saw their money increase by 92.3 per cent.

How has the island nation pulled it off? Well, an end to years of strife between the country's government and the independence-seeking Tamils in the north and east has helped. In May 2009 government forces crushed separatist rebels, bringing to a close four decades of ethnic tensions that the United Nations says may have cost up to 100,000 lives.

Although the aftermath of the war was messy, and the island still has many issues to deal with, the stock exchange in Colombo immediately benefited, rising 128 per cent in 2009 as investors poured in. And this year it put in a repeat performance. A booming IT sector – the London Stock Exchange (LSE) is a prominent investor, having bought the Sri Lankan technology company MilleniumIT in September last year – and its proximity to booming South-east Asian economies such as India and China, have provided a lot of the impetus, as have government privatisations and a rash of other flotations.

"We have between 60 and 75 initial public offerings lined up for next year. That includes five state entities and 35 finance companies," said Malik Cader, director-general of the Sri Lankan Securities and Exchange Commission, earlier this month. Xavier Rolet, the chief executive of the LSE, also talks enthusiastically about what he has bought. War is supposed to be good for business. Peace is much better, but a bit of democracy wouldn't go amiss; just think how high the country could fly then.

Other than Sri Lanka, the resource-rich economies of Latin America came heavily into play among this year's top-performing markets. Peru and Chile were stars, Argentina, one of the continent's two heavyweights alongside Brazil, also did well, as did Colombia. That has to be put in context: there is an element of bounce-back after the dark years of the recession. All the same, putting a pound into tracking these markets at the start of the year would have produced a more-than-healthy return.

Bill Dinning, head of strategy at Aegon Asset Management, says: "These markets are very much resource plays. We've seen a boom in the prices of industrial metals, and precious metals have also done very well. And there is some support for it still. The outlook for economic growth in 2011 has improved, in the US, in Germany and even here.

"I think we are still playing that game and that will sustain parts of the commodity complex that fuels the markets of these countries. The one thing to watch for is whether the energy complex joins in the bull market. Gasoline is up 10 per cent this year and crude oil has averaged the second-highest price since 2008. That would actually be a worry and a break on growth."

Two other stellar performers, the Thai and Indonesian stock markets, both play into the Asian economic boom, which has continued despite the weakness of Europe and the US, driven by China.

Thailand has not been without its challenges, not least the continuing political instability which led to protests earlier this year. But concerns that this could derail the economy's recovery have proved unfounded. Consumer spending has been on the rise, export growth is strong, and one of the factors that could hamper this – inflation – has remained relatively low.

Elections are expected to be held towards the end of next year, and a repeat of the recent unrest cannot be ruled out, but fund managers say Thailand's equity markets remain cheap and should continue to perform strongly throughout 2011. A word to the wise: peace is good for business. Just look at Sri Lanka.

Robert Quinn, the chief European equity strategist at S&P Equity Research, explains the attraction of the emerging markets, whose stock exchanges have done so well. He said: "We've seen a real acceleration of the global industrial cycle in the latter parts of this year. A lot of money has come out of equities in developed countries and towards emerging markets, which offer a better risk-return profile than other assets at the moment."

One of the important factors to consider when looking at markets is currency – if you look at how markets performed in terms of local currency, as opposed to how they would have performed if you had invested a pound, you get different results. The euro-denominated market in Estonia, for example, has performed exceptionally strongly: it is up 72 per cent in local currency terms. However, in sterling, it has produced a slightly less impressive 65 per cent rise. This is because of the euro's weakness against the pound (and just about every other currency). Elsewhere, sterling's weakness helps inflate returns.

Mr Quinn says: "As for the Baltic states such as Lithuania and Estonia, they took a lot of the adjustment in wages and public spending early, when compared to their counterparts in some of the other weaker Eurozone states on the periphery. Of course, Ireland took an early hit, too. The problem there was that it didn't sort out its banks."

Jerome Booth, head of research and co-founder of fund manager Ashmore Investment Management, says of the markets: "Emerging markets generally should be trading at a premium to the developed world. Inflation, not deflationary pressures, is the main risk, but it is controllable. You have very strongly growing economies without the downside risk of the developed world.

"South-south trade and investment has taken off," Mr Booth continues. "Central banks have started to buy each other's reserves so they are weaning themselves off the old system. There is vibrant growth in investing and demand. This is where you find the bulk of land, people, energy consumption and production. Not to invest in these places is bizarre, particularly when the big risks are at home."

The island of Sri Lanka has accommodation to suit almost any taste and budget.

Boutique Hotels are a recent trend in Sri Lanka. Usually with just 3-15 rooms, they offer a quietness and privacy that is hard to find in larger hotels. Every Boutique Hotel has its own unique style and its smaller size means more personalized service. Ideal for an intimate get-away with someone special, Boutique Hotels are known for their atmosphere of tranquillity and romance. More expensive than your average hotel, boutique hotels have a magical charm not easily forgotten.


Hotels usually have at least 50 rooms, but larger hotels can have up to 500 rooms and suites. Hotels can be found to suit any budget in Sri Lanka, and are ideal for families or large groups because of their many facilities and activities. Sri Lanka has quite a few 'Colonial' style hotels that are usually Colonial Mansions transformed into luxurious hotels, yet preserving their former grandeur and character.



Bungalows are small homes that were once Colonial properties but have since been renovated for modern use. Bungalows in the hill country were originally built as holiday cottages for British tea-planters, and many have been re-furbished to be luxurious and comfortable. Bungalows most often have their own kitchens and some even come complete with maid and cook. They are ideal for couples looking for privacy and romance, or even families and smaller groups. Although Bungalows don't have all the facilities of a large hotel, they are a cost-effective alternative for larger groups.

A villa is very similar to a Bungalow, though some may have more rooms. They are usually luxury residences, built to satisfy all the creature comforts of a guest. In the same way that smaller homes in the hill country are usually called 'Bungalows,' summer homes on the island's coast are usually called 'Villas.' Private Villas are usually rented out to guests as a complete house and come with well-equipped kitchens. Villas are very versatile in their pricing, and they are a great option for couples, families and large groups.

 5 STAR HOTELS - LISTING

• Cinnamon Grand - Colombo
• Ceylon Continental Hotel - Colombo
• Taj Samudra Hotel - Colombo
• Cinnamon Lakeside - Colombo
•  Hilton Hotel - Colombo
• Earl's Regency - Kandy
• Eden Resort & Spa - Beruwala
• Galadari Hotel - Colombo
• Heritance - Ahungalla
• Heritance - Kandalama
• Hilton Colombo Residence - Colombo
• Mahaweli Reach Hotel - Kandy
• The Elephant Corridor - Sigiriya
• The Blue Water - Wadduwa
• Saman Villa - Bentota
• Vivanta by Taj Bentota - Bentota