Hospitality Industry in Sri Lanka Market Size (2024 - 2029)

The market size of the Sri Lankan Hospitality industry is poised for growth, driven by the country's rich culture and significant role in the tourism sector. The market comprises a wide array of hospitality options, including resort hotels, city hotels, boutique hotels, homestays, camping sites, and restaurants. The sector is a major source of revenue and foreign exchange for the country, contributing significantly to the GDP and employing a large workforce. Despite facing challenges such as political instability, economic conditions, social issues, and environmental considerations, the industry continues to attract major international hotel chains. However, the market has also experienced setbacks due to crises such as the coronavirus pandemic and political turmoil. The government has been making efforts to support the industry, and initiatives like the 'Tourism Bio Bubble' and a safety mobile app for international tourists have been implemented. The rising middle class, increasing disposable income, and a growing interest in travel among millennials are further expected to boost the market size. The hosting of the Asia Cup 2023 matches is also anticipated to create substantial demand for hotels, positively impacting the market size.

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Market Size of Hospitality Industry in Sri Lanka

Hospitality Industry in Sri Lanka Size
Study Period 2018 - 2028
Base Year For Estimation 2021
Forecast Data Period 2024 - 2028
Historical Data Period 2018 - 2020
CAGR 4.00 %

Major Players

Hospitality Industry in Sri Lanka Major Players

*Disclaimer: Major Players sorted in no particular order
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Sri Lanka Hospitality Market Analysis

The highly diversified landscapes and natural attractions in Sri Lanka have been welcoming a growing number of visitors to the country. The total tourist arrivals to Sri Lanka in 2018, amounted to more than 2.3 million, which welcomed 2.17 million in 2017. The revenue generated through travel and the tourism sector remained a high contributor to the national economy, with a contribution of 5.1% towards GDP for two consecutive years i.e 2017 and 2016. in 2017. The earnings from the foreign exchange from tourism sector increased to 15.9% of total foreign exchange earnings in 2017. In order to accommodate the increasing number of visitors, Colombo has more than 14 hotel construction projects in the pipeline that are scheduled to be opened by 2022. This pipeline targeted the luxury segment of the hotel market and aimed to add around 2,000 rooms to the supply and less focused on budget and mid-scale segment with around 600 rooms that are going to be added to the supply. The country recorded average daily revenue (ADR) of LKR 20,500 in 2018 and LKR12,300 of revenue per available room (RevPAR). Sri Lanka recorded around 60% of the occupancy rate for the same year but due to the Easter terror attacks in April 2019, all the key indicators recorded fewer figures when compared to 2018.

Sri Lanka Hospitality Industry Segmentation

A complete background analysis of the Hospitality Industry in Sri Lanka, which includes an assessment of the industry associations, overall economy, and emerging market trends by segments, significant changes in the market dynamics, and market overview is covered in the report.

By Type
Chain Hotels
Independent Hotels
By Segment
Service Apartments
Budget and Economy Hotels
Mid and Upper mid scale Hotels
Luxury Hotels

Hospitality Industry in Sri Lanka Size Summary

The Sri Lankan Hospitality Market is currently experiencing significant growth, with the industry playing a crucial role in the country's tourism sector and overall economy. The market offers a wide range of hospitality options, including resort hotels, city hotels, boutique hotels, homestays, camping sites, and restaurants serving authentic Sri Lankan cuisine. The tourism sector, with hospitality as its major component, is a significant source of revenue and foreign exchange for the country. The industry is influenced by various external and internal factors, such as political instability, economic conditions, social issues, technological developments, environmental considerations, and the legal framework. Major international hotel chains are present in the country, with several other global companies expected to establish operations in the near future. Despite facing several crises, including the coronavirus pandemic and the 2019 Easter Sunday terror attacks, Sri Lanka's tourist-dependent economy is gradually recovering. The government has taken several initiatives to support the hospitality sector, which has a significant impact on the economy. Factors such as the consistently growing middle class, rising levels of disposable income, and increasing interest among millennials to travel are driving growth in the travel industry, indirectly aiding the expansion of the hospitality sector. The country's hospitality market is expected to benefit from hosting several Asia Cup 2023 matches, leading to increased demand for hotels in the cities where the tournaments will be held.

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Hospitality Industry in Sri Lanka Market Size - Table of Contents

  1. 1. MARKET INSIGHTS AND DYNAMICS

    1. 1.1 Market Overview

    2. 1.2 Market Dynamics

      1. 1.2.1 Drivers

      2. 1.2.2 Restraints

      3. 1.2.3 Opportunities

    3. 1.3 Impact of COVID-19 on Hospitality Industry

    4. 1.4 Insights on Revenue Flows from Accommodation and Food and Beverage Sectors

    5. 1.5 Leading Cities in Sri Lanka with Respect to Number of Visitors

    6. 1.6 Investments (Real Estate, FDI and others) in the Hospitality Industry

    7. 1.7 Technological Innovations in the Hospitality Industry

    8. 1.8 Insights on Shared Living Spaces Impact on the Hospitality Industry

    9. 1.9 Insights on Other Economic Contributors to the Hospitality Industry

    10. 1.10 Value Chain Analysis

    11. 1.11 Porter's Five Forces Analysis

  2. 2. MARKET SEGMENTATION

    1. 2.1 By Type

      1. 2.1.1 Chain Hotels

      2. 2.1.2 Independent Hotels

    2. 2.2 By Segment

      1. 2.2.1 Service Apartments

      2. 2.2.2 Budget and Economy Hotels

      3. 2.2.3 Mid and Upper mid scale Hotels

      4. 2.2.4 Luxury Hotels

Hospitality Industry in Sri Lanka Market Size FAQs

The Sri Lanka Hospitality Market is projected to register a CAGR of 4% during the forecast period (2023-2028).

Amari Galle, Yoho Lanka (Pvt) Ltd, Shangri-La Hotels and Resorts, Mariott International, Inc and Amaya Resorts & Spa are the major companies operating in the Sri Lanka Hospitality Market.

Sri Lanka Hospitality Market Report Snapshots