Business

Retaining talent: The missing link in tourism’s recovery

Published

12 months ago

2025/11/4

Sri Lanka’s hotel and tourism sector, a vital foreign exchange earner, faces a mounting labour shortage. A new study by the National Human Resource Development Council (NHRDC) warns that unless urgent measures are taken to address skills gaps, worker migration, and gender disparities, the sector’s growth prospects could be undermined.

Key Takeaways

Tourism directly contributes around 4% of GDP and 13% of foreign exchange earnings, employing approximately 450,000 people pre-pandemic.

Labour demand is rising fastest in kitchen (35%), food & beverage (22.8%), and housekeeping (16.6%) departments.

The industry remains male-dominated (76% vs. 24% female), with women underrepresented due to cultural barriers and limited flexibility at work.

Over 60% of staff exits between 2020 and 2023 were due to overseas employment.

Vocational training is heavily concentrated in cookery, with fewer trainees entering guest relations and management, creating a skills mismatch.

Retaining talent has become a key challenge, with high migration, low career progression, and poor working conditions driving staff turnover.

Tourism Recovery Meets Workforce Shortages

The NHRDC’s Labour Market Trends in Sri Lanka – 2024 report places the hotel and tourism industry at the center of the country’s economic recovery. Before the pandemic, tourism directly contributed around 4% to GDP and generated more than one-eighth of foreign exchange earnings. The sector also created significant indirect employment in linked industries such as transport, food production, handicrafts, and entertainment, amplifying its overall impact on the economy.

After years of shocks; from the 2019 Easter attacks to the COVID-19 pandemic, the sector began to rebound in 2022. Tourist arrivals more than doubled in 2023 compared to the previous year, and during the first nine months of 2025, arrivals reached 1.7 million, with foreign exchange inflows showing similar momentum. Yet, as demand rises, the supply of skilled workers is failing to keep pace.

The report highlights that the emigration of hospitality professionals to higher-paying markets in the Middle East, Europe, and Southeast Asia has left local hotels struggling to fill essential roles. The outflow is particularly high among experienced staff, weakening mentoring chains and reducing opportunities for knowledge transfer to new entrants.

Labour Market Gaps in the Sector

The report identifies several critical workforce challenges:

Migration drain: Between 2020 and 2023, migration abroad accounted for over 60% of resignations among hotel staff, depleting the pool of skilled employees, particularly in culinary and front-office roles.

Gender imbalance: Men account for 76% of the hotel and tourism workforce, while women make up just 24%. The study attributes this to social stigma, rigid work schedules, safety concerns, and the absence of childcare facilities.

Youth exclusion: Among 15–24-year-olds, unemployment remains high, 29.5% for females and 19.4% for males. Despite a large youth population, employers report difficulty finding staff with the right training and soft skills.

Departmental shortages: Forecasts indicate steep rises in demand for kitchen, F&B, and housekeeping staff between 2024 and 2027, further tightening labour supply.

“Hotels are indeed seeing higher demand in these areas as tourism recovers,” noted a senior Human Resources Director from a leading hotel chain of the country. “These are the most operationally intensive departments, and as occupancy rises, the pressure to fill these roles has become more pronounced.”

While star-class hotels are able to absorb some of the impact by offering higher wages, small and medium-sized hotels, especially those in rural areas, face even greater challenges in retaining staff.

Training and Skills Mismatches

The NHRDC analysis reveals that while vocational training remains central to the industry’s labour supply, course enrolments are highly uneven.

Cookery courses dominate, with over 3,000 students enrolling in 2024.

Food and beverage and housekeeping courses also attract strong participation.

By contrast, fewer than 200 students enrolled in guest relations courses in 2024.

This imbalance has created a clear skills mismatch, with oversupply in some trades and under-supply in others. Guest relations, travel management, and supervisory roles remain underrepresented, despite being critical to service quality and competitiveness.

“Most training still focuses on cookery because of strong overseas demand, leaving fewer professionals prepared for guest-facing and managerial roles,” the HR Director confirmed. “This imbalance makes it difficult to sustain service quality at the higher end of the market.”

The report further highlights that many vocational curricula are outdated and fail to address emerging industry needs. Areas such as multilingual communication, digital hospitality, and customer service excellence remain underdeveloped, leaving graduates ill-prepared for evolving expectations.

Why Workers Leave

The NHRDC’s survey of 108 hotels found that the majority of resignations between 2020 and 2023 were linked to better job prospects overseas, where hospitality roles offer higher pay, structured training, and more attractive benefits packages.

Other reasons for staff exits include limited career progression, particularly in smaller hotels with flat organisational structures; poor work-life balance due to long hours and irregular schedules; and inadequate benefits and incentives. For women, the lack of flexible hours, insufficient support systems, and safety concerns were cited as key barriers to remaining in the industry.

“Women find it difficult to balance personal and professional responsibilities, especially after marriage,” the HR Director added. “Unless we make the workplace more inclusive and supportive, we will continue to lose a valuable segment of the workforce.”

Policy and Industry Recommendations

The NHRDC concludes with a series of targeted interventions to strengthen the hotel and tourism workforce:

Introduce competitive wage structures to stem the outflow of skilled workers to foreign markets.

Expand vocational training programs beyond cookery to include guest relations, eco-tourism, wellness tourism, and digital hospitality.

Strengthen public–private partnerships between hotels, training institutes, and government agencies to align curricula with industry needs.

Enhance female participation through flexible work policies, safer environments, and childcare support.

Implement apprenticeship schemes to provide youth with hands-on training in hotels and restaurants.

“What the sector urgently needs are structured career pathways, diverse training options, and inclusive workplace practices,” the HR Director emphasised. “If we fail to address these areas, we risk undermining the very foundation of tourism’s recovery.”

A Critical Juncture for Tourism

Tourism’s contribution to GDP and foreign exchange earnings underlines its strategic importance to Sri Lanka’s economic recovery. Yet, as the NHRDC cautions, growth will be unsustainable without a skilled and stable workforce.

The sector’s competitiveness will depend on reforms that close skills gaps, improve talent retention, and expand workforce participation. With demand forecast to rise sharply in coming years, the challenge is not merely to attract tourists, but to ensure that those who serve them are adequately trained, motivated, and retained.

Saumya Amarasiriwardane

For Sri Lanka, retaining and developing talent is no longer a secondary issue, it is the missing link that will determine whether tourism can truly drive the country’s recovery.

by Saumya Amarasiriwardane
Economist
The Ceylon Chamber of Commerce

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Business

Saudi Vision 2030 offers new economic opportunities for Sri Lanka

Published

12 hours ago

2026/10/21

Sahan Weerasooriya

International delegates

By Ifham Nizam

Saudi Arabia’s Vision 2030 is creating opportunities for Sri Lanka in trade, investment, renewable energy, tourism and employment while strengthening the longstanding friendship between the two countries.

Led by King Salman bin Abdulaziz Al Saud and Crown Prince and Prime Minister Mohammed bin Salman, the programme aims to diversify Saudi Arabia’s economy, attract international investment, develop new industries and reduce dependence on oil revenues.

Launched in 2016, Vision 2030 is built around three pillars: a vibrant society, a thriving economy and an ambitious nation. Its focus on tourism, technology, logistics, renewable energy, industrial development and private-sector growth aligns with Sri Lanka’s need for foreign investment, stronger exports, energy security and sustainable employment.

Trade and investment opportunities

The establishment of the first Saudi–Sri Lanka Joint Business Council in November 2025 created a platform for businesses to identify investment opportunities, develop partnerships and address trade barriers. Saudi participation in Sri Lanka Expo 2027 could further strengthen commercial ties.

Sri Lanka can expand exports of value-added tea, spices, apparel, rubber products and processed foods to Saudi Arabia. Better distribution networks, packaging and compliance with market standards would help local producers, especially small and medium-sized enterprises, compete more effectively.

Saudi investors could explore Sri Lankan tourism, logistics, food processing, renewable energy and export-oriented manufacturing. The goal should be long-term partnerships that create jobs, transfer technology and improve productivity rather than simply increasing trade.

Renewable energy and green investment

Energy is another promising area. Saudi Arabia’s diversification programme includes major investments in renewable energy and emerging technologies. Partnerships in solar power, battery storage, electricity infrastructure and energy efficiency could help Sri Lanka reduce dependence on imported fossil fuels and improve energy security.

Cooperation could also include technical training and technology transfer. Saudi investment in sustainable tourism, modern agriculture, water management and infrastructure could create further opportunities if projects are commercially viable and supported by transparent regulations.

Vision 2030 seeks to make Saudi Arabia a major international tourism destination while improving services for pilgrims visiting Makkah and Madinah.

Sri Lanka could attract more Saudi visitors through better air connectivity, targeted marketing and partnerships with travel operators. Sri Lankan companies could also supply food, hospitality services and other products to Saudi Arabia’s expanding tourism sector.

Employment remains central to bilateral relations. Sri Lankan workers contribute to the Saudi economy, while their remittances provide valuable foreign exchange at home. As Saudi Arabia develops new industries, Sri Lanka can strengthen vocational training and skills-based recruitment in hospitality, healthcare, construction and technical services. Recognised qualifications, ethical recruitment and worker protection would benefit both countries.

Economic cooperation is complemented by Saudi Arabia’s distinctive spiritual role as custodian of Islam’s two holiest mosques.

Through the Custodian of the Two Holy Mosques’ Guests Programme for Hajj, Umrah and Visit, King Salman approved the hosting, at his personal expense, of 1,000 male and female Umrah performers from around the world in June 2026. Implemented by the Saudi Ministry of Islamic Affairs, Dawah and Guidance, the programme’s first group included 250 guests from 16 Asian countries, who visited Madinah and Makkah and took part in cultural and educational activities.

For those invited, performing Umrah and visiting the holy sites is a deeply meaningful religious experience. The initiative reflects Saudi Arabia’s commitment to facilitating worship and strengthening bonds among Muslim communities. It also complements Vision 2030’s Pilgrim Experience Programme, which aims to improve transport, accommodation, digital services and facilities for pilgrims.

This spiritual and cultural engagement adds a human dimension to commercial ties, helping deepen understanding between the two peoples.

Sri Lanka and Saudi Arabia established diplomatic relations in 1974, and their partnership has grown through trade, employment, development cooperation and diplomacy. The next step is to convert this goodwill into measurable results.

Sri Lanka needs a clear portfolio of viable projects, predictable regulations and efficient procedures to attract Saudi investment. Local businesses must be prepared to meet Saudi market requirements, while the Joint Business Council and Sri Lanka Expo 2027 can help connect investors and entrepreneurs.

The partnership should ultimately be judged by increased exports, productive investment, quality employment and the transfer of skills and technology.

Vision 2030 offers Sri Lanka an opportunity to build a more dynamic relationship with Saudi Arabia by combining commercial cooperation with diplomatic, spiritual and people-to-people ties. Together, the two countries can create lasting benefits for their economies and communities.

Business

LKR 3 billion HLAB fund launched to help Sri Lankan businesses scale

Published

12 hours ago

2026/10/21

Sahan Weerasooriya

Hatch, Lankan Angel Network and BOV Capital join forces, with First Capital Holdings PLC committing LKR 300 million as anchor limited partner in a fund built on a commercial investment case.

Starting a business is difficult. Building one that can grow, compete and endure is harder still.

For Sri Lankan founders, the challenge doesn’t end when they prove their idea works. The next stage demands stronger operations, access to new markets and the capital to pursue opportunities that could transform a promising venture into a sustainable business.

A new initiative aims to help more founders take that next step.

Hatch, Lankan Angel Network (LAN) and BOV Capital have launched HLAB, a collective LKR 3 billion fund designed to back early and growth stage regional companies that are incorporated in Sri Lanka. Announced at the final event of First Capital Startup Nation, organised by Hatch, the initiative brings together three established participants in the country’s startup ecosystem around a shared ambition: expanding access to capital for businesses seeking to grow.

Adding institutional participation to the initiative, First Capital Holdings PLC has committed LKR 300 million as the fund’s anchor limited partner, representing 10% of its total size.

From promising startups to enduring businesses

The transition from an early stage venture to a sustainable, growing company is a defining point in a founder’s journey. Businesses must move beyond establishing their models and begin building the operational strength and market reach needed to pursue larger opportunities.

Business

JXG’s Wasanthi Stephen makes history as the first female recipient of the CIPM Sri Lanka Lifetime Gold Award

Published

12 hours ago

2026/10/21

Sahan Weerasooriya

JXG (Janashakthi Group) celebrates Wasanthi Stephen, Group Chief Human Resources Officer, on becoming the first female recipient of the prestigious CIPM-Baurs Lifetime Gold Award 2026 from the Chartered Institute of Personnel Management (CIPM) Sri Lanka since the award’s inception. Presented on 14 October 2026, at the opening of the National Human Resource Conference (NHRC) 2026 at Monarch Imperial, Kotte, the award marks a historic milestone for Sri Lanka’s Human Resources profession and a proud moment for JXG.

The highest individual recognition in Sri Lanka’s Human Resource Management sphere, the CIPM Sri Lanka Lifetime Gold Award celebrates individuals whose long-standing contributions have advanced the HR profession at organisational, national, and international levels. It recognises professional excellence, ethical leadership, transformational impact, and a sustained commitment to people and institutions.