Sri Lanka's Rising Tourist Arrivals Sends Hotel Stocks High

18th March 2010, www.dailynews.lk, By Harshini Perera

Sri Lanka's tourism sector has developed after the war resulting in heavy trading in hotel sector stocks.

Analysts expect the market will be soon be over valued where investors can aim for higher profits in the tourism sector in future.

Foreign investors are active in the CSE through funds and therefore they show less trading in the hotel sector.

Capital Trust Securities Director Sarath Rajapakse said they expect Indian and European investors to trade in hotel stocks in the future. "There were many adverse travel advisories on visiting Sri Lanka before the end of the war. The situation has changed now. Our tourism industry is progressing well," he said.

"Our tourism industry depends heavily on Western countries. It took sometime for tourists to make up their minds to visit Sri Lanka. There is a tremendous increase in arrivals in the first two months of this year," Rajapakse said.

Most of the companies related to tourism are doing well now due to the healthy market condition in tourism.

Most of the hotel sector trading has been done by local investors, Asha Phillip Securities Director/CEO, Dimuthu Abeysekera said.

Companies in the local hotel sector are planning expansion projects in the North and East. Some companies have diversified into the hotel sector to reap benefits.

"The increase in tourist arrivals has been substantially high despite the global economic crisis. A lot of hotels will do very well in the future as Sri Lanka is a famous tourist destination," a stockbroker said.