SME sector hoteliers call for urgent State intervention | Sunday Observer
Reaching a point of no return

SME sector hoteliers call for urgent State intervention

1 November, 2020

The global pandemic continues to take a heavy toll across all sectors of which the SMEs in the hospitality industry as all other SME businesses have reached a point of no return due to the absence of adequate policy direction towards the sector which is a vital cog in the tourism industry.

Villa, bungalow and boutique hotel operators have shut down operations with zero occupancy for the past three years marked by repeated blows to the smooth functioning of business.

The October 2018 political instability, the April Easter Sunday attacks and the current health crisis has brought mayhem particularly to the small, micro and medium sector businesses which have no adequate buffer to confront such challenges.

Managing Director, Arvani Hotels, Anomi Jayasinghe who with her parents runs two properties in the South, said since launching operations of the first property in 2017 occupancy had been extremely low making the business unsustainable. “The government encouraged setting up villas, bungalows and boutique hotels to lure in the high end travel segment and boost the rural economy but left the operators to find their way with few promotional material such as a directory on properties across the country. We need much more policy attention especially at a time like this when small scale businesses are severely affected by the current crisis,” said Jayasinghe.

Most SME sector hotel operators share the same sentiments that the Government should step up revival measures to put the tourism sector back on its feet if the country is to re-bounce with the much needed foreign exchange to keep the economy going.

“The banking sector could wave off interest and not charge interest on new loans for SME sector businesses at least for the next two to three years till the dust settles from the current crisis. This is the time everyone from the First citizen to Citizen Perera should make major sacrifices to support the country to come out from the turmoil,” Jayasinghe said, adding that many SME leisure sector businesses are even unable to service the four percent interest not that the moratorium of most loans have come to an end.

She said the family had invested over Rs. 100 million on two properties one in Galle and the other in Tangalle but have failed to make any headway in business due to lack of policy attention and financial mediation to keep nose above water particularly during a time of crisis.

“We have shut both our properties but have continued to pay the staff despite zero occupancy for the past seven months,” Jayasinghe said, adding that if the trend continues without the authorities intervening to support all affected hotel operators will be forced to call it a day soon.

Arvani Tangalle, a 100-year-old house turned into a two–bedroom luxury villa was launched in 2017 and Arvani Galle built to a Dutch concept is a four-bedroom villa which opened in 2019.