Sri Lanka has taken the first formal step toward revising its nearly two-decade-old Tourism Act, with Cabinet approval already granted to draft a new framework. The move comes as the sector records a strong revival in 2025, raising hopes of surpassing ambitious arrival and revenue targets.
Tourism Deputy Minister Prof. Ruwan Ranasinghe yesterday confirmed that the drafting process has begun, though he cautioned that reforms remain at an early stage. “The Cabinet approval to issue a new Act has been granted, and now it has to move through the legislative drafting process. It takes time, especially when many Government institutions are involved,” he told the Daily FT.
The 2005 Tourism Act has long been criticised as outdated, failing to address today’s challenges such as digitalisation, sustainable tourism, and streamlined promotion mechanisms. Industry stakeholders argue that structural inefficiencies particularly in procurement for overseas campaigns—have hindered Sri Lanka’s competitiveness against regional rivals.
Prof. Ranasinghe acknowledged these gaps, noting that Treasury procurement rules often delay marketing drives. “Currently, we must follow Treasury procurement guidelines, which add lengthy grace periods. What we are trying to do is minimise these steps and speed up the process,” he explained. He added that e-procurement and broader digitalisation are being considered as part of the reforms.
Another key element under review is governance. The Deputy Minister said private sector concerns would be addressed, with more representation for Small and Medium Enterprise (SME) associations on the Tourism Board. “We want to ensure their voices are heard. The revisions must be well thought out and cannot be rushed,” he stressed.
The overhaul comes at a pivotal moment. By August 2025, Sri Lanka had welcomed over 1.49 million visitors, a 15% year-on-year increase. Earnings for the first five months of the year reached USD 1.38 billion, putting the country on track toward its annual target of 3 million arrivals and USD 5 billion in revenue. This follows the 2024 performance of 2.05 million tourists generating USD 3.17 billion in income.
Tourism analysts argue that unless the Act is modernised, Sri Lanka risks falling short of its full potential despite the recovery. The current legal framework does not adequately support emerging segments such as high-end tourism, casino-driven investment, and eco-tourism, nor does it address widespread concerns over informal operators evading taxes.
Prof. Ranasinghe, however, stressed that reforms would not stall ongoing campaigns. “We can’t afford to delay promotions while the Act is being developed. The work will continue,” he assured.With arrivals surging and global competition intensifying, the success of the new Tourism Act will be measured by how effectively it balances governance, speed, and innovation to keep Sri Lanka on a sustainable growth path
