Tourism Minister Vijitha Herath has announced that Sri Lanka will introduce local alternatives to the international travel services platform, Booking.com, by the end of April.
Speaking to the Sunday Times, Minister Herath confirmed that the technical aspects and complete service packages of the new platforms are already in place.
“Booking.com became dominant due to a lack of alternatives, allowing it to capture an excessive market share without competition,” the Minister stated.
Addressing Parliament on March 18, Minister Herath emphasized the government’s commitment to breaking the platform’s monopoly, noting that Booking.com currently operates in Sri Lanka without paying taxes while charging high commissions from local vendors.
“We need to decide whether we remain stagnant for the next decade or take steps to grow. That is why I raised this issue in Parliament,” he said.
A Sri Lankan app developer based in Brisbane is collaborating with local companies to develop and refine one of the new platforms. According to the Minister, approximately three apps are currently in development, supported by local hotels. These platforms will be registered with the Sri Lanka Tourism Development Authority and will extend beyond accommodation services to include transportation, souvenir shopping guides, tea, antiques, and more, serving as comprehensive travel guides for tourists.
While discussions are ongoing regarding the taxation of Booking.com, Minister Herath stated that the immediate priority is fostering local competition within the industry.
Booking.com currently lists approximately 16,600 registered accommodation options in Sri Lanka, including hotels, holiday rentals, and homestays. In contrast, as of 2019, only 2,529 accommodations were registered with the Sri Lanka Tourism Development Authority.
Veteran hotelier and former president of the Hotels Association of Sri Lanka, Sanath Ukwatte, welcomed the initiative, noting that the industry has long advocated for such measures. He pointed out that Booking.com’s high commission rates significantly impact local businesses and that ensuring tax contributions from all stakeholders would help create a level playing field.
“Everyone has to pay taxes, so this move ensures fairness in the industry,” Ukwatte stated.
However, some industry representatives have expressed concerns about the potential impact on small businesses. M. B. Jayarathna, from the Association of Small and Medium Enterprises in Tourism, Sri Lanka, acknowledged that while the introduction of competitive platforms is beneficial, the sudden removal of Booking.com without viable alternatives could negatively affect small business owners.
Jayarathna also noted that some registered travel agents monopolize the industry by promoting their own hotels, making it difficult for smaller businesses to compete. He highlighted that Booking.com has allowed small and medium-sized enterprises (SMEs) to bypass these monopolies and attract guests independently.
“The government should establish multiple platforms and allow them to compete with international brands like Booking.com, rather than introducing abrupt policy changes that could disrupt the SME sector,” he advised.
The introduction of local alternatives is seen as a significant step toward strengthening Sri Lanka’s tourism industry, balancing the market, and supporting homegrown businesses while maintaining fair competition with established international platforms.
