Economic Environment Tourism Industry of Sri Lanka

Introduction 

From early historical times. Sri Lanka has attracted foreign visitors. Many books. particularly by British administrators. have been written based on the different attractions of the Island. The first attempt to develop tourism in Sri Lanka was made by the colonial govemment prior to the Second World War. The Government Tourist Bureau was set up in 1937. Although international tourism in the modern sense was unknown at the time, the objective in setting up the Bureau was to provide facilities and services to the large volume of passenger who sailed between the West and East through the port of Colombo on passenger ships.

Sri Lanka's primary location on the world sea lanes attracted many cruise ship, freighters and other vessels. Passengers that entered the port of Colombo disembarked and enjoyed sightseeing in Colombo, Kandy and their surrounding . The Tourist Bureau's primary responsibility was to service these passengers when they came ashore by greeting them and providing sight seeing tours. Although accurate records are unavailable, it is estimate that approximately one hundred thousand passengers visited the country per annum. The Tourist Bureau cased its operations in 1940 due to the commencement of World War Ⅱ. Due to the War there was little tourist activity.

Sri Lanka gained independence in 1948 and the new government decided to revive tourist activities by setting up the second Tourist Bureau which came to be known as the Government Tourist Bureau. The Government Tourist Bureau which was set up in 1948 functioned under the Ministry of Commerce for some time and was brought under the Ministry of Defences. The functions that ware assigned to the revived Tourist Bureau ware much wider than its earlier responsibilities. In addition to providing meeting and greeting facilities it was entrusted with the functions of undertaking tourist promotional work overseas and to develop tourist accommodation facilities. An officer designated as Director was placed in-charge of the Bureau and separate divisions were entrusted with the tasks of handling the new functions assigned to it.

During the 1950s there was a rapid growth of international tourism and it extended to all parts of the world. International tourist arrivals increased at an annual average rate of 7.1% from 23.5 million in 1950 to 561.0 million in 1995 more than a 22 fold increase over a period of four and a half decades. During this period, the average yearly growth rate has been as high as 10.6% which however has gradually slowed down to 4.1% in the 90s.

This was largely due to the introduction of jet aircraft for civilian transport after World War Ⅱ. Consequently it became necessary for the countries to build new airports with winder and longer runways and parking boys. larger spaces, and terminal building with modem facilities.

Economic Environment

The Sri Lanka tourism industry is one of the fast emerging industries of the economy with  annual revenue of US $ 500 million at present. It is the sixth largest foreign exchange earner in Sri Lanaka. It has created employment for about 125,000 personas. At present, nearly half a million tourists visit the country every year. Sri Lanaka has exotic sandy beaches. large greeneries, historical artefact, and a good climate, spectacular landscape in the highlands, a rich biodiversity and friendly and welcoming people. There distinctive opportunities will be utilized to develop the tourism industry as a major growth sector in the development of the economy. In present Sri Lanaka has achieved a high growth in tourism industry with the current political stability as well as the opening of the North and East to tourist. Today Sri Lanka tourism contributes enormously to the Sri Lankan economy. Because after the end of the civil war in 2009, Sri Lanka witnessed a strong upsurge in tourism.

1. The government's vision is to transform Sri Lanaka tourism sector, by 2020, to be the largest foreign exchange earner in the economy; position Sri Lanka as the world's most treasured and Greenest Island and attract high spending tourists while preserving the country's cultural values natural habitats and environment.
2. The government has targeted 2.5 million tourists by 2016 and room capacity of about 45,000 to meet this target. This sector is also expected to receive investments in excess of US$ 2 billion in the medium term in area of luxury hotels. high quality residencies and high end shopping malls.
3.  The Government recognizes the multiplier effect of tourism development in creating employment opportunities and distribution of wealth through a variety of economic activities predominantly in the SME sector, taking the advantage of SMEs being able to link micro enterprises form one side and large scale corporate sector on the other side. Some of the key objectives to be achieved though the 5 year strategy area as follows:

• Increase tourist arrivals form 650,000 in 2010 to 2.5  Mn by 2016.
• Attract USD 3,000 Mn as Foreign Direct Investment (FDI) to the country within 5 years.
• Increase the tourism related employment form 125,000 in 2010 to 500,000 by 2016 and expand tourism based industry and services all island .
• Distribute the economic benefits of tourism to a larger cross section of the society and integrate tourism  to the real economy.
• Increase the foreign exchange earning form USD 500 Mn in 2010 to USD 2.75  Bn by 2016.
• Contribute towards improving the global trade and economic link ages of Sri Lanka