Hotel chains are looking to widen their footprint in Sri Lanka with the recovery of inbound tourism to the pre-Covid level.

Sri Lanka received two million overseas visitors in 2024 due to increased air connectivity and by granting visa-free access to 35 countries including India. It hopes to attract three million tourists this year and hotels are keen to cash in on the demand. “Sri Lanka is a very good leisure destination,” IHCL managing director & CEO Puneet Chhatwal said. “There are still a lot of untapped places in Sri Lanka and IHCL will look at them in line with the company’s 2030 growth strategy,” he added.

Hilton’s properties are seeing a strong demand supported by an increase in international arrivals, return in MICE (meetings, incentives, conferences, exhibitions) activities as well growing interest in Sri Lanka’s eco-tourism offerings, said Jamie Mead, company’s senior director of operations (South-East Asia region). “We remain deeply invested in the Sri Lanka market. We are always on the lookout for the right opportunity to expand our brands with the right partners,” Mead added.

New constructions and challenges

Revival in tourism and improved economic outlook following a financial crisis in 2022 is driving developer interest in the island country.

New hotel openings in Colombo in 2024 included ITC Ratnadipa (352 rooms) and Cinnamon Life (687 rooms). Radisson and Marriott are expected to add new hotels this year. This includes a Radisson Collection hotel in Galle, a city known for its fort and lighthouse. According to local media reports, JW Marriott and Ritz-Carlton hotels are set to open in Negombo and Mirissa, respectively.

While the property launches are creating jobs and boosting the local economy, it has led to a challenge for hoteliers. Supply has grown faster than demand, especially in Colombo. As such hotels in other locations are commanding better rates during the peak season. “Our resort in Bentota is doing very well because the supply is limited there,” Chhatwal said. This is among three IHCL properties in Sri Lanka. Chhatwal believes that the demand-supply imbalance in Sri Lanka will ease soon as it remains a favourite destination.

India top source market

Over 4.16 lakh Indian tourists visited Sri Lanka in 2024, accounting for 20 per cent of all foreign arrivals. Indian tourist arrivals grew 37 per cent on a year-on-year basis. Russia, UK Germany and China were other key source markets. “We are proud to mark this milestone which underscores our commitment to strengthening India-Sri Lanka bilateral relations. By enhancing air connectivity we aim to stimulate tourism and foster economic growth,” said IndiGo’s head of global sales, Vinay Malhotra.