Sri Lanka’s tourism sector is heading toward a defining confrontation as the JVP-led National People’s Power (NPP) government pushes ahead with plans to repeal and replace the existing Tourism Act, despite mounting resistance from industry stakeholders. At the heart of the controversy lies the government’s proposal to establish a single “Sri Lanka Tourism Authority,” consolidating several key institutions under one administrative umbrella in the name of efficiency and modernization.
The proposed legislation, expected to follow Cabinet approval in 2025, seeks to fully replace both the current Tourism Act and the original 1968 law. Under the new framework, the Sri Lanka Tourism Development Authority, Tourism Promotion Bureau and Convention Bureau would be merged, supported by a National Tourism Commission and district-level tourism committees. The government argues this overhaul is long overdue, citing fragmented governance, weak enforcement and an inability to attract high-value tourists, eco-tourism ventures and sustainable investment.
Officials claim the existing system has failed to keep pace with global tourism trends and has struggled to regulate informal operators who operate outside licensing and tax frameworks. Centralization, they argue, would enable better coordination, stronger accountability and greater private-sector participation in shaping national tourism policy.
However, the industry sees the move very differently. Tourism stakeholders have issued a strong warning that repealing the Tourism Act could destabilize one of Sri Lanka’s most resilient and promising economic sectors. In a joint statement, industry bodies rejected the idea of a full repeal, insisting that the Act should remain the foundation of tourism governance and be selectively amended rather than dismantled.
Tourism leaders argue that legal certainty is critical in a sector where over 95 percent of investment comes from the private sector, ranging from multinational hotel chains to small guesthouses, transport operators and village-based enterprises. They warn that abrupt legal changes could erode investor confidence and disrupt long-term capital formation in an industry where returns often take decades to materialize.
Beyond investment concerns, employment looms large. Tourism directly and indirectly supports millions of livelihoods across hospitality, agriculture, fisheries, crafts and informal services. Industry representatives caution that regulatory uncertainty could trigger job losses and economic instability, particularly in rural and coastal communities that rely heavily on tourism-driven income.
There are also fears that dismantling the current legal framework could weaken standards related to safety, quality and environmental protection. Stakeholders argue that deregulation risks opening the door to unlicensed and substandard operators, damaging Sri Lanka’s global tourism brand at a time when the country is rebuilding its international reputation.
As protests intensify, the government faces a delicate balancing act. While reform may be necessary, the unfolding standoff highlights the high stakes involved and the potential consequences of pushing structural change without industry consensus.
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