Thailand's hospitality giants are looking forward to greater investment opportunities in Sri Lanka as new President Maithripala Sirisena takes charge, as they expect the country's tourism sector to remain robust.
The Avani Kalutara Resort is one of two Avani properties in Sri Lanka, and Minor will open its first Anantara resort in Galle this year.
Sri Lanka has rapidly gained popularity among foreign travellers from all over the world in recent years since the end of years of civil strife.
"Investment opportunities in Sri Lanka have been strong for a number of years and we expect that this trend will continue in 2015 and beyond," said Dillip Rajakarier, chief executive officer of Minor Hotel Group (MHG) and chief operating officer of Minor International Plc. (MINT), Thailand's biggest hospitality company.
Minor first invested in Sri Lanka in 2007 and opened its first Avani branded hotel in 2011. The Avani Bentota Resort & Spa was followed a year later by the Avani Kalutara Resort. This year the company plans to launch its first Anantara property, the Anantara Tangalle Resort & Spa, which is under development along the southern coast near the historic city of Galle.
Suparat Chirathivat, vice-president for business development with Centara Hotels & Resorts (CHR), said the hospitality industry in Sri Lanka had been growing steadily since 2012 when the country started to open up more to outside investors.
Suparat: Big need for infrastructure
Centara, which has six hotel brands ranging from five-star to more affordable boutique properties, made its debut last year in Sri Lanka with the Centara Ceysands Resort & Spa.
"Currently, the business is continuing to grow at a satisfactory level and this is due to the strategic location and the size of the country which has attracted large group of tourists from all over the world, especially from Europe," said Mr Suparat.
European tourists, he noted, were now looking at Sri Lanka as an alternative to Thailand as the travel cost is lower and living expenses are also modest.
As well, cultural and religious similarities between Sri Lankans and Thais help when it comes to conducting business and finding local partnerships, he added.
However, investments in Sri Lanka can be "high risk, high return", and newcomers need to be aware of political, the current lack of clear business laws, and the dominant influence of figures linked to the authoritarian regime of recently defeated former president Mahendra Rajapaksa.
"Political risk may be one of the major concerns for newcomers or foreign investors since the country is still in its initial stages, similar to Myanmar, and there are numbers of laws and regulations that are yet to be put in place," said Mr Suparat. "All investors look at their returns differently and those that are willing to risk more will earn more."
Apart from the hospitality business, Mr Suparat said other huge developments were waiting to be undertaken as the postwar rebuilding continues. "Sri Lanka still lacks decent infrastructure, such as electricity and roads, and major improvements are still needed."