COLOMBO, Nov 1 (AFP) - The truce with the LTTE has revived Sri Lanka’s once-tottering tourism trade to the point where de luxe hotel rooms, that once went for eight dollars a night, now cost more than 100.
With the number of tourists visiting the island expected to hit an all-time high this year as foreigners rediscover a lost paradise, hotels are for the first time posting "house full" signs and their prices are soaring.
"It is clear that we are running short of rooms," said the chairman of the Ceylon Tourist Board, Udaya Nanayakkara, who is pushing Sri Lanka as a destination "beyond the beaches" of this Indian Ocean island republic.
Sri Lanka welcomed just over half a million foreign holidaymakers last year and Nanayakkara expects the number to jump to about 570,000 this year.
At the end of May this year, some 217 hotels accounting for 13,133 rooms were registered with the tourist board.
Another 3,000 hotel rooms, which had remained shut for years when tourism hit rock bottom as fighting between government troops and Tigers peaked, would be back in operation within a year, he said.
Five-star hotel rooms went for as little as eight dollars a night in 1988 when the government faced a separatist war in the north of the island while Marxists rebels in the south tried to topple the administration.
Those Marxists are now in government and the LTTE have been observing a truce with security forces since February 2002, although Norwegian-backed peace talks have been on hold since April last year.
With the guns falling silent and bomb attacks in and around the capital ceasing, de luxe hotel room rates have shot up beyond 100 dollars.
Prices for middle-of-the-range tourists are also climbing steadily.
"Last year a tourist on average spent 64 dollars a night and we think it will go up to 78 or 80 dollars this year," Nanayakkara said. "We want the figure to go up to 155 dollars in the next five years."
From next year it becomes official policy that hotels cannot sell "all-inclusive" packages in a move expected to encourage foreign holidaymakers to spend more instead of being confined to pre-paid packages.
"The ceasefire is of paramount importance. Peace is the main ingredient of tourism," Nanayakkara said. "We are naturally concerned about the peace process."
Britain, Germany and India are the biggest generators of tourists for Sri Lanka, but the island is also making a new push in Scandinavia and China.
"Sri Lanka is becoming a trendy destination," said travel industry executive Nicoll Chome, here for a conference of travel agents at the southern resort of Bentota.
The tiny Colombo exchange has been going through the roof and setting new records thanks partly to the renewed interest in hotel shares, said Hasitha Premarathne, head of research at HNB stockbrokers.
Industry insiders say the top-end Sheraton and Hyatt want to set up hotels in the capital Colombo, which already has two Hilton properties, one owned by the Taj group of India and four other de luxe hotels.
There are however also concerns Sri Lanka could price itself out of the market unless there is a corresponding increase in the quality of the hotels and services offered.
Most of Sri Lanka’s top hotel executives left for more lucrative employment, particularly in the Maldives and the Middle East, when the hospitality trade was in the doldrums, and staff salaries have not seen appreciable increases. (AFP)