Boston, MA -- (SBWIRE) -- 02/14/2014 -- We believe that the recent weakness in the Sri Lanka rupee is both a blessing and a curse for Sri Lanka's booming tourism industry. With the rupee now at the cheapest it has ever been against the euro, we expect to see an increase in arrivals from the bloc, which remains the island's top tourist market. That said, the downside of a much weaker rupee is that the cost of major tourism-related infrastructure developments is likely to face some upside pressure.
Beyond the current year, BMI believes arrivals to Sri Lanka will grow at a strong annual rate of at least 10% per annum. BMI's tourist arrival forecasts remain dependent on a peaceful security situation. Despite the ruling United People's Freedom Alliance (UPFA)'s electoral defeat in the Northern Province's recent elections, the Rajapaksa regime's success in holding largely peaceful elections in a majority-Tamil area should help in deflecting international pressure and criticism off of Colombo to enhance reconciliation efforts following the recent end of the country's decades-long civil war.
View Full Report Details and Table of Contents
Any recurrence of civil conflict, which we think is unlikely, would pose a clear downside risk to our forecasts. That said, the Tamil National Alliance (TNA)'s strong performance in provincial council elections in September 2013 may raise tensions in the domestic political scene as the Tamil minority's interests are further emboldened, clashing directly with the Sinhalese-dominated national government's agenda. The September polls clearly showed that economic advancement in Tamil-dominated areas (brought on by massive infrastructure development by Colombo with the help of Beijing) is not enough to sway the minority population's camp into Rajapaksa's support base. The government has accused the TNA of fuelling calls for a separate Tamil state, while the latter has sought devolution of power in a united Sri Lanka, which, for the alliance, entails the end of the army's occupation in the north. This could deter potential tourists over 2014 as they become wary of further unrest.
As part of its 'Tourism Development Strategy 2011-2016, the Sri Lankan government is looking to increase the number of tourist arrivals to 2.5mn by 2016. BMI believes that it is unlikely that this ambitious target can be met within such a short timeframe, although we believe the primacy given to boosting tourist numbers by the Sri Lankan Tourism Development Agency will be positive for the industry.
We also note the large number of utilities, water and sanitation infrastructure projects under construction and in the pipeline in Sri Lanka, with these developed with a view towards creating a more attractive environment for luxury-loving Western tourists.
About Fast Market Research
Fast Market Research is a leading distributor of market research and business information. Representing the world's top research publishers and analysts, we provide quick and easy access to the best competitive intelligence available. Our unbiased, expert staff is always available to help you find the right research to fit your requirements and your budget. For more information about these or related research reports, please visit our website at http://www.fastmr.com or call us at 1.800.844.8156.
Browse all Consumer Goods research reports at Fast Market Research
You may also be interested in these related reports:
- Travel and Tourism in Sri Lanka to 2017
- The Future of Travel Intermediaries in Sri Lanka to 2017: Market Profile
- The Future of Hotels in Sri Lanka to 2017: Market Profile
- Oman Tourism Report Q1 2014
- Bed Linen Market in Sri Lanka to 2017 - Market Size, Trends, and Forecasts
- Saudi Arabia Tourism Report Q1 2014
- Cosmetic and Toiletry Product Market in Sri Lanka to 2017 - Market Size, Trends, and Forecasts
- Egypt Tourism Report Q1 2014
- Brazil Tourism Report Q1 2014
- Air Conditioner Market in Sri Lanka to 2017 - Market Size, Trends, and Forecasts