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Sri Lanka tourism product needs facelift to justify price hikes

Feb 08, 2011 (LBO) - Sri Lanka needs to improve the quality of its tourism product and infrastructure to further increase room rates after a post-war rise in rates made the island look expensive, an equities research report said.
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The country also needs to improve entertainment and shopping in order to break the seasonality of the industry and lure visitors during the 'off-season' to fill hotel rooms year-round, the report by NDB Stockbrokers said.
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The report cited as a concern the rise in room rates after the end of the island's 30-year ethnic war in 2009 which led to a boom in tourist arrivals.

More than 650,000 tourists visited the island in 2010, up 46 percent from the year before, and the country plans to attract 2.

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5 million visitors by 2015, NDB Stockbrokers said.

"We feel that Sri Lanka is increasingly becoming an expensive destination.

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Therefore, in order to further increase rates it is necessary to improve the quality in terms of entertainment and infrastructure.
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"

Room rates have increased by over 25 percent from the 2009 levels, mainly in hotels in Colombo and the south coast, according to industry experts.

Five-star room rates in Sri Lanka were around 110-450 US dollars a night compared with 1

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