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Monday, October 3, 2016

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Threats for tourism industry As political risk introduces additional elements of uncertainty into the rules governing tourism investment projects, the risk of capital loss is raised for longer- term projects. Hence, overall productivity in an economy is likely to be lowered via a shift in the marginal efficiency of investment schedule. Political risk also negatively influences the timing and pricing of the tourism production process. We have identified that political risk, lack of investment capital and distance from major tourist- generating markets as barriers to tourism promotions in Sri Lanka in general. Negative images, lack of foreign exchange for tourism development, lack of skilled manpower, weak institutional frameworks for tourism planning, political instability caused by communal violence, civil war conflicts are inhibitors to tourism development. However, little is known about how international tourism firms perceive political risks and other general barriers and threats to tourism promotion in Sri Lanka. Common political factors which affect the tourism industry are revolution, civil war, factional conflict, ethnic violence, religious turmoil, widespread riots, terrorism, nationwide strikes/ protests/ boycotts, cross- national guerrilla warfare, world public opinion, repatriation restrictions, leadership struggle, high inflation, bureaucratic politics, border conflicts, high external debt service ratio and creeping nationalization. Last thirty years Sri Lanka also faced the civil war and it affected the tourism industry of Sri Lanka. Even the war has come to an end still the government is facing the issues such as Channel 4 and human rights issues, and these factors influence the tourism industry in negative manner and it affects the country’s image as well. Organizing elections frequently also create threat to the tourism industry because during the election period in some places to control the situation cur hews are implemented. Page 12 of 96 This will create negative image in the mind of tourists. Some of the foreign countries have boycott Sri Lanka’s products in their country due to the violation of human rights during the war time. For example government invested and spent on IIFA program but it was not a successful event for Sri Lanka because the big stars have boycotted the event. They didn’t visit Sri Lanka because of the protests held in their country by asking them not to visit the place. Currently Sri Lanka is having negative relationship with some foreign countries therefore the export and import of Sri Lankan products will be decreased and it affects the tourism industry as well. Even though Sri Lanka has got rid from the war still facing the political instability and security issues. Future Trends, Challenges, and Recommendations

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