After navigating unprecedented challenges in recent years, Sri Lanka’s hospitality industry is experiencing a transformation. Taru Villas, a boutique collection, is playing a unique role in this transformation by reimagining authentic Sri Lankan hospitality for the global luxury market.
In a conversation with Echelon, CEO Alvin Jacobs discusses the industry’s recovery trajectory as well as the company’s brand refresh and expansion plans. Taru Villas’ next steps, Jacobs says, will position it as a guiding star for the sector’s future.
How is the local leisure industry shaping up after the challenges of the past few years? What trends are shaping its future?
Sri Lanka’s leisure industry is demonstrating a robust recovery after a challenging period. Tourist arrivals for the traditionally low-performing months of April to June of 2025, compared to the same period in 2024, grew by 19%. Our own bookings reflect this momentum through a 40% increase, driven mainly from the European and Australasian market.
While the industry often benchmarks against 2018 occupancy levels, this comparison overlooks a fundamental shift. Back in 2018, Sri Lanka had approximately 35,000 rooms country-wide. Today’s expanded inventory means traditional occupancy metrics alone don’t tell the full story.
Between 2024 and 2025, we’ve seen an overall room inventory increase of approximately 4% across the island, with the Colombo District contributing significantly, accounting for roughly 40% of that new inventory. Sri Lanka’s total room inventory has expanded dramatically from 35,000 rooms in 2018 to over 55,000 rooms in 2025. However, if average length of stay remains unchanged from the 2018 figure of 8.32 nights, this substantial inventory increase will actually decline the country’s average occupancy rates.
This concentration of new inventory in the capital region highlights a critical gap: there’s a clear requirement for more quality inventory in underdeveloped tourism regions, which is precisely where Taru Villas focuses its strategic development.
Taru Villas maximises revenue by encouraging guests to stay longer, delivering higher yields per room and better occupancy rates through extended stays. We create an environment where guests don’t view our properties as one-night transit destinations. This is where our local discovery strategy comes into play through our Discover Sri Lanka experiences, encouraging extended stays that allow guests to truly immerse themselves in authentic local culture and attractions.
Looking ahead, several trends are reshaping our landscape. Guests now broadly seek authentic cultural immersions and sustainable interactions, there is an increase in demand for wellness focused requests, and over 55% of our bookings now originate online. On that note, the country will need to invest in infrastructure and services to meet its three million annual tourist arrivals.
Taru Villas will leverage ongoing trends and address these infrastructure needs to deliver sustainable and technologically advanced hospitality experiences in Sri Lanka’s most sought after destinations.
Taru Villas revamped its brand in 2025. Why was this undertaken, and what do you hope to achieve?
The 2025 brand refresh for Taru Villas was deeply rooted in our identity and future aspirations. As many know, “Taru” in Sinhala means “Star.” We envisioned Taru Villas becoming a guiding star, illuminating the path for our guests to discover the wonders and beauty of Sri Lanka.
This revamp was undertaken to better reflect our commitment to providing exceptional, authentic experiences. We realised our previous branding needed to evolve to keep pace with the desires of the modern traveller. We aim to further enhance our position as the premier choice for luxurious boutique accommodations, whilst simultaneously attracting those who wish to unlock the very best of Sri Lanka, its people, culture, and undiscovered secrets.
Can you give us an overview of Taru Villas’ business model and current portfolio? What are your strategic expansion plans?
Taru Villas’s collection of boutique properties across Sri Lanka is designed to offer a blend of intimate and luxurious comfort with authentic Sri Lankan hospitality. We celebrate local design traditions and culinary experiences, connecting with artisans and communities at large.
Earlier in June 2025, we unveiled Taru Villas Levita Kandy, offering an intimate escape where rolling golf greens meet mountain horizons, just moments from Victoria Golf Club.
Looking ahead, we are on track for the opening of two new properties. In November, we’ll be unveiling a boutique hotel in Kalpitiya which consists of 11 chalets overlooking the Kalpitiya Lagoon and featuring nearly 400 meters of lagoon frontage. In December, we’ll be opening a 7- bedroom boutique villa in Ahangama, an inland retreat specifically designed for guests seeking relaxation and tranquillity.
Our expansion plans are rooted in sustainability and responsible growth. We’re not aiming for rapid expansion, but rather to carefully select locations that resonate with our brand values and offer something special.
How do you position Taru Villas to compete in the luxury hospitality market?
Taru Villas stands apart by offering intimate, personalised experiences paired with genuine Sri Lankan hospitality. Our hallmark is curated villa stays in unique locations, designed to connect guests with the heart of Sri Lanka, illuminated by the spirit of Taru.
The luxury market is increasingly sophisticated, and today’s discerning travelers aren’t just seeking opulent amenities. They want authentic connections and meaningful experiences. As such, “Discover Sri Lanka with Taru Villas” isn’t just a sub-brand; it’s our promise of handcrafted explorations tailored for the discerning traveller, unveiling the island’s cultural tapestry, culinary delights, and natural wonders. This is where the essence of Taru as the guiding star truly shines.
Our strategy aims to entice guests to stay longer at each stop of their journey around Sri Lanka. This approach enhances guest satisfaction and creates deeper cultural connections as well as more meaningful travel experiences.
A selection of Taru Villas’ best views and experiential locations.
What role do partnerships play in your growth strategy?
Strategic partnerships are a cornerstone of our market positioning and growth. Our affiliations with Small Luxury Hotels of the WorldTM (SLH) and Hilton Honors represent a carefully crafted dual approach that amplifies our reach while preserving our unique identity.
SLH’s portfolio of independent, luxury properties perfectly complements our boutique ethos, connecting us with guests who specifically seek authentic and distinctive experiences. Simultaneously, our relationship with Hilton Honors amplifies our access to international distribution channels and booking systems that would be challenging for an independent boutique brand to access alone.
To further strengthen our international distribution capabilities, we have partnered with a dynamic yet young Sales, Marketing & PR representation firm based in the United Arab Emirates that shares similar brand values and strategic vision. This will significantly expand our reach across Middle Eastern markets and their international networks.
These alliances are about strategic leverage. We use these partnerships to punch above our weight class while never compromising what makes us distinctly Taru Villas.
How important is sustainability to your business model, and how do you balance growth with environmental responsibility?
Sustainability isn’t just important to our business model, it’s integral to it. We’ve learned that in today’s market, particularly in the luxury segment, environmental and social responsibility aren’t optional considerations; they’re competitive advantages that drive consumer decisions.
First, our careful location selection process ensures that every property resonates with our brand values while offering something genuinely special to the destination. Through our hotels and villas, we’re also creating economic opportunities for local communities while preserving the natural and cultural heritage that makes each location unique. This commitment to excellence is exemplified by The Long House Bentota, which has achieved the TravelLife Gold Certification, and our recent completion of ISO 14064-1:2018 compliant GHG emissions verification across seven properties, establishing a verified baseline of 317 tonnes CO₂ equivalent as we implement targeted reduction strategies.
We’re also expanding into ecotourism, which aligns perfectly with the growing trend toward experiential and sustainable travel. Our Kalpitiya property, for instance, leverages the area’s natural assets, including the lagoon and wildlife viewing opportunities.
The key is recognising that sustainability and luxury are complementary forces. By delivering on both fronts, we hope to create stronger guest loyalty and positive word-of-mouth, which are invaluable in the hospitality industry.
Looking at current market dynamics, what challenges and opportunities do you see ahead?
The opportunities significantly outweigh the challenges, particularly given the recovery momentum we’re seeing for Sri Lanka as a travel destination. The booking increase and growth in our key international source markets demonstrates there’s strong underlying demand for what Sri Lanka offers as a destination.
The challenge, as with any recovering market, is ensuring that growth is sustainable and doesn’t compromise the experiences that make Sri Lanka special. There’s always a risk in tourism that success leads to over-development and/or commoditisation of cultural experiences. By focusing on curated, intimate experiences rather than mass tourism, we can capture the growing demand while preserving Sri Lanka’s identity.
The key opportunity is positioning Sri Lanka not just as a value destination, but as a premium experience destination. With our strategic partnerships, authentic approach, and commitment to sustainability, Taru Villas is positioned to play a leading role in that transformation. We’re not just riding the recovery; we’re helping to shape what comes next in our own little way.
What does success look like for Taru Villas in the long term? What’s your ultimate vision for the brand?
Our end goal for Taru Villas is to be the northern star, the guiding light for the hospitality industry of Sri Lanka. It’s about elevating the entire industry through our approach to authentic hospitality that goes beyond the traditional triple bottom line, to demonstrate that you can deliver world class experiences while remaining deeply connected to local culture and environment.
In practical terms, this means showcasing the best of Sri Lanka through our properties, while building a brand that’s recognised globally for authentic luxury. We want guests to choose Sri Lanka specifically because they know Taru Villas will help them discover the real magic of our island.
Beyond our own success, we want to influence how luxury hospitality develops across emerging markets. We want to prove that the future belongs to brands that can successfully connect genuine local experiences with global luxury standards. If we can set the example, then we would have achieved something more significant than business success. We would have helped preserve and celebrate Sri Lankan culture while sharing it with the world.