SLTDA’s new unit commences registering nearly 2200 tourist establishments in informal sector

• Over 55% of Sri Lanka’s hotel room stock in informal sector 
• Legal action against informal establishments that doesn’t comply with SLTDA regulations 

Sri Lanka has commenced registering nearly 2200 tourist establishments in the informal sector amounting to a 50,000 room stock under the newly established enforcement unit of Sri Lanka Tourism Development Authority (SLTDA).

Minister of Tourism Development, Wildlife and Christian Religious Affairs, John Amaratunga yesterday announced that the new unit of SLTDA will gradually register all tourist establishments in the informal sector.

He made this announcement at the agreement signing ceremony of National Sustainable Tourism Certification Scheme with UNDP Sri Lanka held in Colombo. 
Amaratunga told Mirror Business that he has advised the SLTDA to equip the regional level employees with legal expertise to expedite the registration, as the current core legal division of SLTDA remains weak. '

SLTDA Director General Upali Ratnayake revealed that there is at least a 50,000 room stock in the informal sector amounting to over 55 percent of the country’s hotel room stock. “According to Booking.com, the widely used booking platform in Sri Lanka, there are 90,000 rooms available in the country which are both formal and informal.  When you deduct 40,000 rooms in the formal sectors, there are 50,000 rooms in informal sector,” he said. 

Ratnayake estimated that there would be around 2200 odd tourist establishments which are not registered with SLTDA based on several sources. 

Speaking of the registration process, he said, “Firstly, our team will visit these establishments one-by-one and will give them a one-month period to register with us. They will be advised that according to the current law of the country it’s compulsory their establishment gets registered with SLTDA.”

He noted that the SLTDA team will also assist these establishments with the registration process. 

However, if they fail to register with SLTDA within the one month period, Ratnayake asserted that SLTDA will not hesitate to take legal action against the owners of these establishments. 
“We will take legal action against individuals and organisations which don’t comply with our regulations,” he stressed. 

The enforcement unit has already issued warning letters to several establishments, and they are preparing to file the case against the first establishment next month following the lapse of the one month deadline.  

Meanwhile, Ratnayake revealed that popular online booking platform ‘Agoda’ has already agreed to work only with SLTDA-registered establishments in the future. 
Similarly, the discussions with Booking.com also have been successful, and SLTDA is planning to continue the discussions. 

However, the SLTDA is still exploring a proper mechanism to engage with Airbnb in this regard as it doesn’t have a physical presence in the region. 

Targeting to enhance the SLTDA database on the informal sector, Ratnayake revealed that SLTDA will launch several initiatives including a joint survey at several public universalities to capture more data of the informal sector.

Sri Lanka’s informal sector has been on the rise since the end of the war in 2009, in order to cater to demand of influx of independent tourists to the country. The emergence of online booking platforms also helped these establishments to market themselves to tourists directly.  

The informal sector also helped to trickle down the benefits of tourists to the locals in the tourist hotpots. 

However, Sri Lanka’s hoteliers have been lobbying for regularising Sri Lanka’s informal tourist establishments noting that they face unfair competition from the informal sector, while the government also losses significant tax revenue. 

The room prices of informal sector remains fairly low compared to formal sector attracting a large portion of backpackers. (NF)