The Cabinet approved a six month moratorium for the Tourism sector 21 days ago but it’s yet to be implemented, a tourism stakeholder said at a joint press conference yesterday.
Asoka Hettogoda said that with the US dollar loans that were taken the tourism stakeholders owed around Rs. 500 million (with interest) to banks and the industry is asking for a six month moratorium for this. “This will also not have a major negative impact to the banking industry as our industry total borrowings are only around 5% of the total landings of the bank.”
However in contrast if the industry is not offered this moratorium and they are unable to meet their debt obligations it will have a negative impact on the banks non performing loans ratio which in turn will reflect badly on banks rations. He also said that the tourism sector has also been very faithful paymasters and when the industry recovers the due to the banks can and would be settled.
Also another stalwart in the industry Anura Lokuhetty said that already some hotels specially in the SME sector are closing down and if the moratoria is not extend for another six months there will be a total job loss of around 40% which is around 200,000, a very alarming scenario for the economy. “It must be said that if this happens with the dependents they are talking about the loss of livelihood would be around one million people.”
Hiran Cooray said that they are confident that the industry is on the recovery path and the industry is confident that they can net in tourism FOREX in the excess of USD 1 billion from the remaining six months. “Sri Lanka is heading for the winter season and we see a very positive trend in our forward bookings despite the current economic and political issues in Sri Lanka. We saw this positive vibe even during the LTTE separatist war.”
Due to the Russian war travel to the EU is restricted and we expect the Russian and the Chinese market also to reopen soon allowing us to go beyond the USD 1 billion revenue mark for the next six months. Meanwhile Nilmin Nanayakkara said that they are asking for moratoria because the arrivals have dropped due to the May 9 incident and political mismanagement. “The industry did not create this negative sentiment and we are not responsible for this and this makes it a request by the industry to call for a moratorium.”
President Tourist Hotels Association Shanthi Kumara said that while thanking new Minister Harin Fernando for getting swift Cabinet approval for the moratoria expressed surprise for the almost one month delay to implement it by the Central Bank and another committee appointed to oversee it.
The industry is on the verge of collapse and accommodation providers and other service providers are on the brink of closure or have already closed.
“We have to save this industry from drowning. Since the Easter Sunday bomb blast followed by the pandemic, the sector survived purely due to the moratorium extended by the Government and the relief package given for its survival. Hotels that employ over 70% of the workforce were able to sustain the staff and cover the basic costs due to these relief measures.”
The THASL and SLAITO members alone invest over rupees 2 Billion annually to promote Sri Lanka in overseas markets. This is over and above the contribution of 1% of the turnover from the industry to SLTDA in the form of TDL to develop and promote Tourism. In 2018, this was an additional 1.5 billion rupees.
The amounts paid as levies, taxes, license fees etc are additionally to the above. All of these will stop if the industry completely closes down.
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