Sri Lankan tourism debt portfolio to banks, insurance companies and other areas have increased to a staggering Rs. 450 billion and if urgent steps are not taken to mitigate this the industry will collapse in three months.
Tourism expert and veteran hotelier Chandana Amaradasa said that the tourism debt portfolio was at around Rs. 300 billion in 2020 and due to low arrivals it has increased.
He said that the downfall of the industry started with the Easter Sunday attacks and was followed by the global C-19 pandemic. Subsequently the ongoing power cuts, current political unrest, street violence and shortage of essential items like gas, fuel, milk power and also long queues to purchase them has aggravated the situation resulting in tourist arrivals dropping from around 2,500 to less than 500 per day.
Leading global tour operators like TUI which accounted to around 45% of local arrivals too have temporarily stopped their operations to Sri Lanka while adverse travel advisories and negative media and social media posts too has resulted in tourism arrivals getting bleak. In addition, due to rise of Jet fuel prices and lack of Dollars have also resulted in sky-rocketing of air tickets and also several airlines reducing their frequencies to Colombo. (A London return on economy which was less than Rs. 100,000 has now shot up to around Rs. 325,000 while the business class fare increased to over Rs. 1 million!)
Amaradasa with over 30 years experience in the hospitality sector said that tourism will face its biggest challenge when the moratoria offered to them ends in three months. “Hotels don’t have business to earn and pay back and the industries as well as banks are in quandary as to how to overcome this.”
He said the Prime Minister and new Minister of Finance will firstly have to urgently create a ‘special tourism subcommittee’ to study and spell out a bailout package. Secondly, Sri Lanka should look at creating a special fund with the assistance of foreign donors to provide some working capital for the industry specially for the SME sector hoteliers.
Thirdly and most importantly, political stability should be established and the government must ensure that essential items such as gas, fuel and uninterrupted power supply are provided to hotels. In addition, a new focused global marketing campaign too should be launched with the assistance of local foreign missions based abroad.”
Tourism accounted for around 12.5% of GDP in 2018 and there are over 3 million dependents from the industry with a workforce of around 250,000.
“Industry brings in around USD 4.5 billion annually and urgent attention should be given to save the industry from collapse as a quick revival of the industry will back not only livelihoods but dollars as well.”
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