Tourism sector hit by ‘tsunami’ of cancellations | Sunday Observer

Tourism sector hit by ‘tsunami’ of cancellations

The Kingsbury after the blast       File photo
The Kingsbury after the blast File photo

The sea breeze sweeps into the dining parlour through the backdoor that opens to a lonely swimming pool. Less than 200 metres away, the Indian ocean crashes against the shore as three persons seated across the room seems to be lost in thought. On the television a movie plays at high volume.

The three occupants are employees of the 10-room hotel, the Southern Star, located in Induruwa, a village on the South Western coast. For a destination that depends exclusively on tourism everything seems to be in place except for one crucial component- the tourists.

Government relief packages

The Easter Sunday attacks and its overwhelming effects on Sri Lanka’s tourism industry is just the tip of an iceberg, Founder and Coordinator of the Master’s degree in Tourism Economics and Hotel Management, University of Colombo, Prof. Suranga Silva said.

He said that though the Government is announcing relief packages to hoteliers and tour operators there is a ‘silent sector’ that is hit the hardest.

“The informal sector that makes a significant contribution to the country’s economy are overlooked,” he said. This sector, which includes the thambili seller, beach boys, three-wheeler drivers, river boat operators and home stay operators, accounts to over 50 per cent of the total tourism industry. Statistics by the Central Bank shows while the direct employment created by the industry is a little over 169,000, the indirect employment created is over 219,400. Also, though the number of registered rooms is around 36000, travel metasearch engines have recorded around 90,000 rooms in Sri Lanka.

“These statistics is proof that the informal sector is a major driver of tourism. Also, they are the most vulnerable at this time,” Prof. Silva said. He explained that this is a good time to register accommodations and empower those involved in the informal sector.

“Tourists, especially repeat tourists, come to Sri Lanka because of their connection to the local communities. That connection is made by the local guide or a beach boy,” he added.

“All our bookings were cancelled. Our hotel is empty. It was never this empty,” its manager Gaya Kamal said.

A tsunami of cancellations hit the country’s thriving tourism industry following the Easter Sunday terrorist attacks on April 21. Hotel room cancellations reached 80 per cent and foreign tourist occupancy in city hotels dropped to a startling five per cent, bringing the US$4.4 billion tourism industry to a standstill.

The attackers targeted three churches in Colombo, Negombo and Batticaloa, and three luxury hotels in Colombo- Shangri-La Hotel, The Kingsbury and the Cinnamon Grand Hotel. A suicide bombing also took place in a budget hotel- The Tropical Inn- in Dehiwala.

Investigations found that the Taj Samudra was also targeted but spared when the suicide bomber’s detonation failed. The bombings claimed 257 lives. The fatalities included 44 foreigners from Denmark, United States, Turkey, Bangladesh, China, India, Japan, Netherlands, Portugal, Saudi Arabia, Spain, Switzerland, UK and Australia.

The Islamic State (IS) claimed responsibility for the attacks.

Travel bans

Shortly after, Sri Lanka was slapped with travel bans and advisories from all countries. Five of them have advised citizens to visit the island only on essential travel assignments. They include European destinations from where Sri Lanka receives the highest number of tourists from.

Statistics by the Sri Lanka Tourism Development Authority shows that in April 2019, Europe was the largest source of tourist traffic to Sri Lanka making up 52 per cent of the total traffic, followed by Asia and Pacific (38 per cent), America (six per cent), Middle East (three per cent) and Africa (one per cent). The total number of international tourists’ arrivals the same month saw a dip of 7.5 per cent in comparison to the same period last year. Meanwhile, by end of April 907,575 tourists had visited Sri Lanka. A 2.2 percent growth compared to the same period last year. By the end of last year 2.3 million tourist arrivals were recorded.

Though the industry is entering the off-season, the Sunday Observer is told that tourists from Arab countries, China and India usually keep the occupancy rate at over 50 per cent in accommodation. However, that does not seem to be the case this year.

In Induruwa, many hotels are closed, employees are asked to stay home till further notice, three-wheeler parks are empty and restaurants suffer without business. These are clear tell-tale signs of the devastating aftermath of the Easter attacks. Nishantha Alwis who owns Canal Villa in Bentota (situated in close proximity to Induruwa) said he has had to lay off employees and close his hotel.

“I was in this industry for 27 years and this is the worst it has ever been. I simply can’t keep my hotel open,” Alwis said explaining the move helped to cut down hotel maintenance costs.

This week, the Government took steps to launch a relief package for the tourism sector. It will cover extended loan repayment periods for loans taken for travel and tourism businesses, re-documentation of existing loans, and the provision of a Working Capital Loan subsidy under Enterprise Sri Lanka, in which the Government bears 75 per cent of the interest rate of the loans with a two-year repayment period.

The relief package also includes tax exemption on security inspection equipment such as walk-through and hand held metal detectors, vehicle scanners and baggage x ray inspection equipment

Tourism Minister John Amaratunga said, the 15 per cent VAT charged from hotel and travel agents will be reduced to five per cent from April 1, 2019 to March 31, 2020. The State is also looking at providing a debt relief to the owners of leased vehicles used in the tourism industry.

Meanwhile, the Sri Lanka Tourism Promotion Bureau is planning a global promotional plan. Also, a sum of Rs. 464 million will be invested in a short-term promotional campaign to revive the island’s tourism industry. The Bureau is awaiting the green light from the Cabinet to go ahead with plans that involve a global agency which has handled campaigns of destinations affected by similar attacks before. City Hoteliers Association President M. Shanthikumar told the Sunday Observer that the industry is also planning special travel promotional packages for tourists. “We are discussing with airlines, Destination Management Companies, and hoteliers to reduce prices charged from tourists till the situation improves,” Shanthikumar said, adding that discussions are underway with the Government to reduce entrance fees at tourists’ sites such as national parks. He stressed that, however, it is important that the Government issue a statement ensuring security in the country to encourage countries to lift travel bans and promote tourist inflow. In addition to the promotional packages discussed by the Government and associations, individual tour operators and hoteliers are giving attractive special offers that are better than usual to attract tourists.

The Managing Director of Tangerine Tours and the vice-president of The Hotels Association of Sri Lanka, Angeline Ondaatjie said Sri Lanka’s case is not an isolated one in the tourism world. “We are not the only country that was hit by terrorism. We are no different to destinations such as Bali and Paris that were also under attack,” she said pointing out that these destinations recovered fast.

Safe country

She also said the Government has to issue a statement ‘in one voice’, leaving political inclinations aside, and communicate that Sri Lanka is a safe country to visit.

Responding to the request, Minister Amaratunga said there is no need for a special statement as President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe have continuously assured total security in the country. “We are back on track. The situation is fully under control. The tourism sector is recovering from the effects of the incident,” he said. The minister said that they are currently discussing with embassies and high commissions in lifting travel bans and advisories. He said the industry is deemed to recover fully by October this year.

The Minister’s statement on security does not resonate in key tourist destinations such as Bentota. Canal Villa’s owner Alwis said he is unsure when he will be able to reopen his property for business. “I don’t know if the terrorist situation is contained. I don’t know what to do or how to tell our clients to come here despite the security risks,” he said adding he is considering going abroad with his family.