SL tourism industry pens for financial aid from Govt.

16 May 2021

SL tourism industry pens for financial aid from Govt.

16 May 2021

By Zahida Rizvi – Sri Lanka’s tourism industry has tabled a financial aid request to the Government in an attempt to revive the industry from the unprecedented global health crisis, the third Covid wave, The Sunday Morning Business learnt. Speaking to The Sunday Morning Business, The Hotels Association of Sri Lanka (THASL) Chairman Sanath Ukwatte noted that the sector is in dire need of financial support, coupled with moratoriums expiring in September and existing debt to be paid off. “THASL, as a measure to survive for the next two to three years, has requested the Government to grant a two-month working capital loan to meet the current challenges, with an additional debt restructuring plan to waive off the interest from 2019 following the Easter attacks. Accordingly, we urge the Government to overlook and vaccinate all hotel staff,” he said. THASL further predicted that the ongoing travel restrictions imposed on tourists, the slow vaccination process, and further delays in introducing the vaccine passports will have a major impact on the tourism industry. The effects of the pandemic have threatened the existence of the local hotel industry and micro, small, and medium-scale tourism enterprises who rely entirely on foreign tourists for their livelihoods. The Sri Lankan Government, in an attempt to cushion the damage impacted on the tourism industry, has granted a financial package to the tourism and hospitality industry with a loan scheme with 4% interest to destination management companies and hoteliers to pay the salaries of their staff, a relief period to pay electricity and water bills of the hotels, and an extension of the six-month grace period to 12 months for the vehicles leased for tourism purposes. Accordingly, the Central Bank of Sri Lanka (CBSL) in its Annual Report claimed that Sri Lanka’s tourism sector contracted negatively following the aftermath of the pandemic. Nevertheless, the CBSL last month declared an extension of debt moratoriums as financial relief for Covid-19-affected businesses and individuals in the tourism industry. Meanwhile, the Sri Lanka Tourism Development Authority (SLTDA) claimed that there has been a steep drop in tourist arrivals by 63% from January to September in 2020 in comparison to 2019. Commenting on the present situation which has taken a toll on the tourism industry, Sri Lanka Association of Inbound Tour Operators (SLAITO) Chairman Thilak Weerasinghe told The Sunday Morning Business that the industry will not survive without a working capital loan since there isn’t a sufficient income yielded. “Discussions are currently underway to obtain a foreign credit line to support stakeholders in the industry from the grassroots level. The credit line will provide a two-year grace period, enabling industry stakeholders to settle the loans with a special rate. Thereby, it will create an opportunity for the industry to survive sufficiently for the next two years,” he stated. Sri Lanka had re-imposed the 14-day mandatory quarantine period for visitors to the country as the third Covid wave erupted, resulting in the Ministry of Health imposing a new set of health guidelines for people coming to Sri Lanka from abroad regardless of their vaccination status. Speaking to The Sunday Morning Business, Minister of Tourism Prasanna Ranatunga pointed out that currently, further discussions are underway with the CBSL for further support appealed by the tourism industry to the Government. Following the outbreak of the pandemic last year, Sri Lanka reopened its borders on 21 January after a 10-month pandemic closure. According to official data, foreign tourist arrivals were recorded to be 5,048 in the January-February period of 2021, which was a decline in comparison to the 420,941 tourist arrivals in the same 2020 period. Therefore, total arrivals in 2020 was recorded to be 507,704, as compared to 1.9 million in 2019. The main source markets this year were Kazakhstan, Ukraine, Germany, and Russia. The airport was closed in mid-March although national carrier SriLankan Airlines, Qatar Airways, Emirates, Etihad, and Turkish Airlines have been operating for repatriation, cargo, and departure flights. Accordingly, by the end of 2019, the SLTDA recorded 1.9 million arrivals, which was a drop in comparison to the 2.3 million tourist arrivals of 2018.

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SL tourism industry pens for financial aid from Govt.

SL tourism industry pens for financial aid from Govt.

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