Govt. pushes forward with new Tourism Act despite growing resistance from hoteliers and tourism stakeholders, as the government moves ahead with plans to overhaul the country’s tourism governance framework through a new legislative structure.
Govt. pushes forward with new Tourism Act amid industry opposition
The Tourism Ministry has confirmed its determination to repeal and replace the existing Tourism Act, arguing that the changes are necessary to eliminate long-standing bureaucratic inefficiencies and improve institutional coordination within the tourism sector.
Addressing the 13th Sancharaka Udawa exhibition in Colombo, Tourism Deputy Minister Prof. Ruwan Ranasinghe said the government recognises the importance of private sector participation in tourism development while attempting to modernise the regulatory framework governing the industry.
“Regarding the Tourism Act, the government’s stance is that we fully understand this industry is run by the private sector,” Prof. Ranasinghe stated during his address to tourism stakeholders and industry representatives.
To accelerate the reform process and address industry concerns, the government has established a special presidential task force tasked with overseeing the legislative overhaul and coordinating consultations with relevant stakeholders.
“We have faced administrative and decision-making challenges, which is why we set up a presidential task force,” Prof. Ranasinghe explained.
According to the Deputy Minister, the government is currently engaging with tourism industry leaders, legal experts and professionals to formulate a revised legal framework that would replace the existing Tourism Act while improving institutional efficiency and governance structures.
However, the proposed reforms have triggered significant concern among private sector stakeholders, particularly major hotel operators and tourism industry associations.
The Hotels Association of Sri Lanka and several leading tourism bodies have strongly opposed the complete repeal of the current Tourism Act, arguing that the existing structure was intentionally designed to separate tourism regulation, destination marketing and training functions into independent institutions.
Industry representatives contend that this separation helps minimise political interference while allowing tourism-related institutions to operate with greater flexibility, professionalism and commercial responsiveness.
Stakeholders fear that consolidating these functions under a single authority could create a larger and slower bureaucracy similar to a traditional civil service structure, potentially reducing the sector’s ability to compete with regional tourism destinations that operate with greater agility and market responsiveness.
A major concern among tourism operators also centres around the management and transparency of the Tourism Development Fund. The private sector argues that the fund, which is financed largely through a one percent turnover tax imposed on tourism businesses, should remain subject to strong industry oversight and independent governance.
Hoteliers have warned that merging tourism institutions into a centralised authority could weaken private sector representation in decision-making processes related to destination marketing and promotional spending.
Industry leaders maintain that businesses contributing directly to the Tourism Development Fund must continue to have a strong statutory role in determining how those resources are allocated to international tourism promotion campaigns and sector development initiatives.
Concerns have also emerged regarding the timeline and complexity involved in replacing the current law. Tourism stakeholders caution that drafting, debating and passing an entirely new Tourism Act could take several years, creating prolonged uncertainty and regulatory instability for the sector.
Many within the industry believe the government should instead prioritise targeted amendments to the existing Tourism Act rather than pursuing a complete legislative overhaul at a time when the tourism sector continues to face multiple external pressures.
Sri Lanka’s tourism industry is currently working toward ambitious national targets of attracting five million tourist arrivals and generating US$ 10 billion in tourism revenue by 2030. Industry stakeholders argue that achieving these goals requires stronger international destination marketing, faster operational decision-making and policy stability.
The sector is also navigating broader geopolitical and economic uncertainties that continue to affect global travel demand and tourism flows across the region.
Despite the mounting criticism from tourism industry stakeholders, the government appears committed to moving forward with the proposed reforms, positioning the new Tourism Act as a key part of its broader strategy to restructure and modernise Sri Lanka’s tourism sector.
The coming months are expected to see further consultations between policymakers and private sector representatives as debate intensifies over the future governance structure of one of Sri Lanka’s most important foreign exchange-earning industries.