Tourist arrivals expected to exceed pre-pandemic levels by 2025: First Capital

MICE tourism takes a hit amidst Minimum Room Rate implementation

By Sanath Nanayakkare

Tourist arrivals are projected to surpass 2 million in 2024 and are expected to exceed pre-pandemic levels by 2025, a report released by First Capital Research states.

2024 commenced on a positive note, witnessing over 200,000 arrivals within the first three months. However, as the winter season draws to a close, a temporary slowdown is anticipated, with expectations of a gradual pickup starting from July. Hence, we project the year to culminate with 2.1Mn arrivals, generating revenue of USD 3.0Bn. By 2025, tourist arrivals are forecasted to reach 2.5 million, indicating a gradual resurgence beyond pre-pandemic levels, the report says.

“There is opportunity for Sri Lanka’s tourism sector to increase focus on key source markets as they have yet to regain pre-pandemic outbound tourism levels. Sri Lanka’s primary source markets, such as India, Russia, the UK, and China, are still striving to attain pre-pandemic outbound tourism levels presents an opportunity for the Sri Lankan tourism sector to focus efforts on regaining its presence in these key markets.”

“Additionally, the depreciation of the Sri Lankan Rupee (LKR) has become a significant factor, making holidays in Sri Lanka more financially feasible compared to pre-pandemic times,” it says.

“MICE tourism takes a hit losing the market to regional peers amidst Minimum Room Rate (MRR) implementation. MRR has hindered the growth of Colombo hotel occupancy rates and potential to discourage many MICE (Meetings, Incentives, Conferences, and Exhibitions) groups from choosing Sri Lanka due to the comparatively higher MRR of Colombo city hotels compared to regional peers,” FC Research notes.

The report makes top recommendations for the sector by quoting three key segments, as follows.

• Overseas exposure: Aitken Spence Hotel Holdings PLC, John Keells Hotels PLC, Hayleys Leisure PLC

• Coastal and Boutique hotels: Lighthouse Hotel PLC, Fortress Resorts PLC , Royal palms Beach Hotels PLC, Serendib Hotels PLC and Dolphin Hotels PLC

• City hotels: AHP