Following the Easter Sunday attack and the disturbances which followed, the hotel industry of the country is facing the biggest challenge of retaining the staff required to carry out the operations of hotels.
A higher number of youth and women had joined the industry during the last 10 years where most of them have gone through the required training and are experienced, if a loss of this staff occurs at this stage, it will take another three years or more to train a new entrant. Thus priority should be given to support the staff.
“Hotels are maintaining their permanent cadres and some hotels are even maintaining the casual and contract cadre but if the government can grant the much talked about working capital loan that is, a soft loan, speedily, then most hotels will be in a position to maintain the staff levels continuously,” President, The Hotels Association of Sri Lanka (THASL), Sanath Ukwatte told the Daily News Finance. He also said that they had appealed to the government to consider offering the industry a guarantee for these loans so that the banks can disperse these funds without a further delay.
Recently the Finance Ministry has issued a fresh gazette effective from June 1 to revise the Value Added Tax (VAT) percentage charged on services rendered by a hotel, guest house, restaurant or other similar business providing similar services registered with the Sri Lanka Tourism Development Authority (SLTDA) to 7% from the earlier 5%. The same percentage will be charged on inbound tour operators and travel agents registered with SLTDA.
“It’s a good move by the government as THASL had always been lobbying for a reduction of top line taxes in the tourism industry,” he said.
Due to the fact that Sri Lanka has been noncompetitive due to taxes such as VAT, NBT, TDL based on turnover he said that any reduction in the top line taxes will help the country to attract more visitors.
As a result of Easter Sunday attacks, many countries imposed travel bans and tourists fled the country causing massive scale of cancellations of future bookings. “Although the travel bans have so far being relaxed with the improved security in the country, for us to get back to where we were, will take 17 to 24 months,” he added.
Therefore, the government’s financial relief package is of vital importance for the industry to sustain livelihoods of the employees and to retain skilled staff within the country. The other important need to do is to regain the confidence of the travelling public that Sri Lanka is a safe tourist destination. “Thus we need to use our embassies worldwide to convey the message that Sri Lanka is safe to travel,” he said.
With the travel advisories relaxed, the tourism sector of Sri Lanka must immediately commence the international marketing and public relation campaign to promote and restore the positive image, the country held so far within the globe. Ukwatte also added that the hotel occupancy rate has been dropped in contrast to the expected rate this year even though the three hotels that were affected by the attacks are open for business.
“Our only goal is for the destination to recover together as soon as possible, so that the entire industry can progress,” he further said.
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