Tourism remains one of Sri Lanka’s biggest economic lifelines, contributing nearly 5% of GDP before the pandemic. Yet the Tourism Act of 2005, which was meant to modernise and unify the sector, is today seen as outdated. The government has now launched the process of drafting a new law, with Cabinet approval already granted to replace the existing framework.
Deputy Minister of Tourism Prof. Ruwan Ranasinghe confirmed that stakeholder consultations are underway, promising representation for both large players and small- and medium-scale businesses. But to truly revitalise tourism, the new law must balance continuity with reform.
This article explores what hasn’t changed in two decades and what desperately needs to.
What Hasn’t Changed Since 2005 on Sri Lanka’s Tourism Act
1. The Industry’s Structural Dependence
Tourism still revolves around a small number of hubs: Colombo, the southern beaches, the Cultural Triangle, and Nuwara Eliya. The Act of 2005 envisioned diversification but in practice, the same regions dominate. Infrastructure improvements in secondary destinations have been limited.
2. Slow Bureaucracy in Promotions
One of the biggest criticisms then and now is the red tape around tourism promotion. International campaigns often face delays due to procurement bottlenecks. The old Act placed promotion under state control, and despite reforms in budgeting and committees, the Treasury still slows execution. The result: Sri Lanka continues to lose visibility to faster, more agile competitors like the Maldives and Thailand.
3. Reliance on Traditional Markets
Europe and South Asia remain the main source markets. Although the industry has long discussed tapping East Asia, the Middle East, and niche segments such as wellness tourism and digital nomads, the structural dependency on traditional visitors persists.
What Needs to Change
1. Greater Private Sector Role
The 2005 Act created agencies like the Sri Lanka Tourism Promotion Bureau and the Sri Lanka Tourism Development Authority. While they streamlined governance on paper, the private sector has often felt sidelined. The new law must ensure true partnership, giving industry leaders and SME owners not just a seat but also a voice on the governing board.
2. Digitalisation of Promotion and Procurement
In 2005, digital marketing was still in its infancy. Today it is the core of global destination branding. The new Act must allow procurement systems that prioritise speed, transparency, and e-procurement. Without this, Sri Lanka will always lag in launching digital campaigns on time.
3. SME Empowerment
Hotels, guesthouses, homestays, and local tour operators make up the bulk of the industry. Yet SMEs often feel excluded from decision-making. A reformed Act must legally guarantee SME representation and create funding, training, and grant schemes. This is critical for fair growth, especially in rural tourism hotspots.
4. Resilience and Sustainability
Climate change, pandemics, and geopolitical shocks were not priorities in 2005. Today, they define tourism risk. The new law must include sustainability clauses, mandating eco-standards, disaster preparedness, and green certifications. Without such provisions, Sri Lanka risks damaging its natural capital, the very asset that attracts tourists.
5. Promotion Beyond Sun and Sand
The old Act supported general promotion. The new one must carve out niche markets: wellness and Ayurveda, heritage and culture, adventure and eco-tourism, MICE (meetings, incentives, conferences, and exhibitions), and digital nomad visas. These sectors require clear legal backing to thrive.
Why Reform Is Urgent
Sri Lanka faces stiff competition. The Maldives has repositioned itself as a luxury eco-destination with targeted digital campaigns. Thailand adapts quickly, leveraging events, influencers, and flexible visa regimes. Sri Lanka, meanwhile, struggles with delayed campaigns, slow policy shifts, and inconsistent branding.
Tourism arrivals in 2024 showed recovery, but unless the new Act fixes structural flaws, the country risks plateauing below potential.
Balancing Continuity with Change
The 2005 Act gave Sri Lanka a foundation. It created a unified structure, legitimised regulatory bodies, and positioned tourism as a key economic driver. Those elements should continue.
But the law must evolve to reflect today’s traveller, today’s risks, and today’s technology. Keeping the good while discarding the outdated is the only way forward.
Conclusion
Sri Lanka’s Tourism Act overhaul is not just a legal process. It is a chance to redefine how the nation presents itself to the world. If reforms succeed, tourism can once again become a $5 billion-plus industry, creating jobs and earning vital foreign exchange.
But if the new Act mirrors the old without tackling bureaucracy, digital gaps, and SME inclusion, the sector risks repeating two decades of missed opportunities.
To read “Unlocking Sri Lanka’s Potential: The Rise of Sustainable Tourism”, Click Here.
