SLTDA invites investors for development of 7 rest houses on 30-year lease
Daily FT: Sri Lanka Tourism Development Authority (SLTDA) has issued a call for investors to submit conceptual proposals for the development of seven rest houses on a 30-year lease basis. Rest houses located in Baththuluoya, Ragala, Nalanda, Anamaduwa, Weeraketiya, Galgamuwa and Hiripitiya aim to boost the country’s hospitality infrastructure and accommodate the growing influx of tourists, ensuring a sustainable and profitable tourism sector for Sri Lanka.
Interested investors are required to maintain these rest houses according to the standards set by SLTDA.
Proposals must include plans featuring essential components such as a reception lobby, bedrooms with attached bathrooms, a restaurant, kitchen, toilets, storage facilities and staff accommodations.
Although the lease agreement spans 30 years, the initial lease period is set for 10 years. “An extension for an additional 20 years will be considered based on satisfactory operations during the first decade,” a top official said.
He added that the minimum annual lease rent is set at 4% of the Government valuation of the property, with higher marks awarded to applicants proposing the highest annual or monthly lease rents.
“Final selection criteria will include the creativity of the proposal, financial capacity of the applicant, amount of investment, proposed lease rent, promotional and marketing capabilities and experience in the travel and tourism industry,” he added.
The initiative follows a recent announcement by SLTDA Chairman Priantha Fernando, who said that Sri Lanka could face a shortage of hotel rooms particularly for high-spending tourists by the end of next year.
He noted that high-end hotels, which charge over $ 250-300 per night, are experiencing very high occupancy rates at these elevated prices.
OSL take:
The steady growth in tourist arrivals to the country and the overall growth in Sri Lanka’s tourism industry have created a host of business/investment opportunities in the country. The increasing number of tourists exploring Sri Lanka has created opportunities specifically in the leisure and hospitality sectors. It is in such a backdrop that the Sri Lankan government has decided to allocate 7 rest houses that are under the purview of the local authorities for private sector investment and management. The increasing number of tourist arrivals and the expansion in tourism zones declared by the Sri Lankan government, the leisure and hospitality sectors present lucrative business/investment opportunities. With Sri Lanka being identified as a must visit tourist destination by many global travel publications and the ongoing promotional campaigns carried out by local authorities in key tourist source markets, the country’s tourism industry would see a further growth in the coming months. Foreign businesses/investors could therefore explore the expanding business/investment opportunities in Sri Lanka’s leisure and hospitality sectors. Foreign businesses could also look at forming partnerships or joint ventures with local businesses engaged in the tourism industry to engage in leisure and hospitality sectors that are open for partnerships.