Tourism, Leisure and Global Change, volume 2 (2015), p.TOC-57 Papers from the 7th Tourism Outlook Conference/Tropical Tourism Outlook Conference, 8-10 August 2014, Dambulla - Kandalama, Sri Lanka <http://geog.nau.edu/igust/srilanka2014/> (Copyright: CC-BY-NC-ND) Socio-Economic Impacts on Local Community through Tourism Development with Special Reference to Heritance Kandalama Geethika Nayomi a , W.K. Athula Gnanapala b a. Undergraduate, Dept. of Tourism Management, Sabaragamuwa University of Sri Lanka, P.O. Box 02, Belihuloya, Sri Lanka. nayomi.7733@yahoo.com b. Senior Lecturer, Dept. of Tourism Management Sabaragamuwa University of Sri Lanka, P.O. Box 02, Belihuloya, Sri Lanka. athulatmsusl@gmail.com (Corresponding Author) Abstract Tourism is considered as one of the largest and fastest developing sectors of the world. Its high growth and development rates bring considerable volumes of foreign currency inflows, infrastructure development, employment generation, regional development, economic multiplier effects and introduction of new management and educational experience actively affect various sectors of economy, which will be positively affected to the social and economic development of the country. However the industry also generates a number of other negative socio- economic and cultural impacts on local communities. Therefore, the study considers the main social and economic impacts on local community trough tourism development in Kandalama area of Sri Lanka. Heritance Kandalama, a star class hotel, commenced its operations in 1994 beside the Kandalama Lake in a picturesque environment. During the construction stage there were many protests against the hotel and may parties claimed that the hotel will pollute the natural and the socio-cultural environment in the area. Finally, the company built an award winning environmental friendly hotel and introduced many programs to deliver benefits to the local community through their CSR activities. The study mainly target to identify the social and economic impacts on local community and their perception towards the tourism development in the neighborhood. The study is adapted the mixed methodology and the data is generated through structured questionnaire survey, personal interviews and discussions. The study identified that community has developed positive attitudes about the tourism development and the community is accepted tourism as a major income source through active and passive participations. The hotel also has taken numerous policy decisions and practices to ensure the delivery of benefits of tourism to the local community. As usually the industry has generated both positive and negative impacts in the area. However, the negative impacts are at a minimum level when compare with the positive impacts. It is suggested that to have more community awareness and education programs in order to obtain positive benefits and to minimize the negative impacts of tourism. Community empowerment and their capacity building is highly important in this context. Key Words: Tourism Development; Socio-economic Impacts; Community Perception; Sustainable Tourism Development