What was the John Keells Group’s vision behind the investment in City of Dreams?

John Keells Group owns the Cinnamon Hotels; we are the biggest hotel operator in Sri Lanka. Cinnamon Grand and Cinnamon Lake Side are big properties... But we realised, after the war ended in 2009, that Colombo didn’t have a location to host big events. Even for a big wedding from India, the ballroom capacity is only 500... if you wanted a conference with 2,000 people, you couldn’t have it in any hotel in Colombo. So we wanted to build a location with space for big events.

In City of Dreams, there are multiple ballrooms that can host 4,000-4,500 people for an event. And to support that we have 800 hotel rooms. When we conceptualised this in 2010-11, looking around Asia, we saw that another thing that was getting traction was a gaming facility... a big driver of footfalls. And we knew that in South Asia — in India, Pakistan, Bangladesh — there was no gaming. In Goa, you have the floating casinos but not the sort of world-class gaming experience in an integrated complex, where you can stay in the hotel. So that was the reason we did this.

Why did it take over a decade to be buil?

We ran into Covid, then we had the economic crisis in Sri Lanka, a lot of disruptions... But now it is finally operational. I think the timing is really good because we are seeing outbound travel from India growing very strongly every year. The Indian economy is doing well, the number of people travelling out of India is growing and Sri Lanka is seeing a big growth in arrivals from India. So we think that tourism in this country will do very well, and Colombo can really be a good location for Indian corporate events, weddings, leisure travel... It is a clean city, nice views of the ocean, and you can enjoy the gaming and the shopping malls, not only here but outside also.

How will the City of Dreams project drive sustainable tourism?

I think Sri Lanka must avoid the over-tourism problem that Bali and a lot of other countries like Spain have. But we are far from over-tourism, it is under-tourism at the moment, because our peak was 2.3 million in 2018. This year, we will do 2.3-2.4 million. But from now on we must plan and go for higher-end properties, so that we attract higher spending and a smaller number of tourists.

Will your properties be able to attract the traffic that goes to other South Asian destinations?

Yes, not only traffic that goes to other South Asian destinations but also Southeast Asian destinations... Bangkok or Malaysia or Singapore or the Philippines or Vietnam. I think more than 1 million Indians now travel to Vietnam, about 1.5 million travel to Thailand. And Sri Lanka last year got about 400,000 Indian tourists. This year, it might be 450,000 or 500,000.

If Thailand can get 1.5 million Indian tourists, I think Sri Lanka should get 1 million Indian tourists. Even if we get 200,000 more, Colombo will be full. We don’t have so many hotel rooms.

You said recently that Sri Lanka is fortunate to be located close to India, which is one of the fastest growing economies in the world. How will this proximity help Sri Lanka’s economy?

There are two areas where Sri Lanka can directly benefit from India. One is tourism — that’s the low-hanging fruit. If you look at outbound tourism, in 2000, 20 million Chinese travelled out of China. Before Covid, in 2019, 170 million travelled out of China. Last year, 30 million travelled out of India. That will become 100 million in just a few years. Can’t Sri Lanka get at least 1 million of that?

The other big opportunity is that we are the main port for India. Now with the fourth terminal, capacity at Colombo port is 11-12 million TEUs (20 foot equivalent units). Eighty per cent of the volume is transshipment, mostly containers in and out of India. And Indian containers are like Indian tourism — the volume is growing rapidly, exponentially.

If my memory serves me right, India had 23 million containers last year, in and out. China did 270 million containers. Of course, China is an export powerhouse, so India may not go to 270 million but 100 million containers. And Colombo is a natural deep-water port.

Do you have any other joint venture plans with the Adani Group (apart from the ongoing development of Colombo port)?

Nothing at the moment. But we are very happy with the commencement of phase-1 of the Colombo West International Terminal. And we expect phase-2 to be operational by the end of 2026, which is fine because, anyway, it will take time for the volume to grow. Current capacity is about 1.6 million TEUs; on completion it will go up to 3-3.4 million TEUs.

Will it t will be enough to handle incoming volumes?

It will be enough for the next few years, but Colombo can keep adding capacity. There is going to be a lot of volume growth.

How will the US tariffs affect Sri Lanka?

We are at 20 per cent now, but we are relieved because we started at 44 per cent, then 30 per cent. If you look at the countries that compete with us for the same market, it is India, Vietnam, Bangladesh... So, I think we can’t complain about where we ended up. But I would worry that if tariffs are 20 per cent and more, can American consumers keep consuming? Because the price will go up for them, right?