By Shabiya Ali Ahlam
Top heads of the hospitality industry yesterday strongly urged the Sri Lanka Tourism Development Authority (SLTDA) to get their act together and pull the fast growing informal sector into some form of regulatory framework, so that the nation continues to maintain its position as a quality service offering destination.

Noting that regulating the informal sector is a “must do”, The Hotel Association of Sri Lanka (THASL) President Hiran Cooray speaking to Mirror Business said: “Regulate so we can maintain quality of offering as health and safety is the most important aspect for a tourist. Failing to do so will result in the responsibility falling on the government and a hefty price will have to be paid for that.

“We must encourage them to come into mainstream tourism so that they also follow the guidelines, and ensure that health and safety standards are met. We are looking at their growth very positively but it is essential that they fall in place with everyone else.”

Cooray shared that while this growth may have eaten into the occupancy of formal sector, it is an area that must be focused on as they play an important role in the shaping the future of Sri Lanka’s tourism landscape.

As majority of hotels in the informal space operate without licence, Colombo City Tourist Hotels (CCTHA) Association President M. Shanthikumar charged that such operators not liable to pay any taxes is an issue that must not be overlooked by the relevant authorities.

“The worst scenario is that the informal sector that don’t have to pay the Tourism Development Levy (TDL), NBT or any other tax. It is the government that is losing by overlooking this.

“Registered hotels are at a disadvantage since there is no level playing field. We welcome more rooms but it is imperative for them to be regularised. This should be compromised,” asserted Shanthikumar.

It was shared that while the registered hotels have collectively taken up the issue repeatedly with relevant authorities, no action has been taken as yet.
“The government seemed keen on regularising this space but nothing has happened. We hope that with the new minister coming in there might be some progress in this effort,” he added.

Meanwhile, hotelier Prema Cooray highlighted it is essential for the tourism development authorities to conduct a research to find out the exact amount of rooms added by the informal sector and their growth rate, as such information is essential to make strategic decisions for the tourism industry.

“There must be some effort to bring in some regulatory framework before it gets out of hand. Because by having the informal sector you will probably lose track of supply. The lack of information in the sector will not give us the right information to make the right decision. If this continues it will lead to an issue in the tourism space,” advised Cooray.

According to the CCTHA, over 5,000 rooms have been added by the informal sector to the hospitality landscape since the end of the war in 2009. The drop in occupancy levels in registered hotels implies that informal sector is a popular accommodation option amongst tourists.