The tourism industry has the potential to earn around USD 1 billion this year provided policy makers are keen to support the industry and the media plays a pivotal role in conveying positive vibes to the local and global travel and leisure community, said The Hotels Association of Sri Lanka (THASL) Past Chairman Hiran Cooray at a media briefing convened by THASL, the Sri Lanka Association of Inbound Operators (SLAITO) and the Association of Small and Medium Enterprises (ASMET) in Colombo last week to urge the authorities to extend the moratorium offered to the tourism industry.
The moratorium for the industry was due to end on June 30.
The three organisations have appealed to the policy makers to extend the moratorium by at least another six months for the industry which provides over 500,000 direct and indirect employment opportunities and generates around USD 4-5 billion in foreign exchange to survive.
“We are not asking things that are impossible but rather what is needed at this crucial juncture to keep head above water,” Cooray said.
THASL President M. Shanthikumar said Tourism Minister Harin Fernando has shown interest in getting the moratorium extended with a Cabinet paper submitted last month but so far there has not been a positive response from the authorities which is hard for industry to fathom the rationale for the silence maintained by the government to back an industry which is the second highest forex earning industry after foreign remittances.
The tourism industry brought in forex to the tune of around USD 4.5 billion in 2018, the best year for the industry in terms of income generation.
We are confident and positive about a re-bounce this year with the December winter and infrastructure in place to welcome travellers to the destination ranked second best place to visit after Fiji Islands by a leading global travel body said THASL Past President Anura Lokuhetty
The value of tourism is little known in the country as greater attention has always been on tea, rubber, coconut and apparel industries.
There is a multiplier effect of industry. It›s not just bringing the much needed forex to the country but also has benefits that filters down to grass-root levels where the guide, tuk drivers, jeep drivers, gem and jewelry, handicraft sellers, fishmongers vegetable and thambili sellers etc benefit immensely with the arrival of every tourist to the country, SLAITO Past President Nilmin Nanayakkara said.
The revenue earned from the informal sector of homestays etc are not tracked in the Government data analysis, he said. However, the industry estimate that this sector contribute at minimum an additional 10% to the tourism earnings to the country. What requires to be recognised is a fact that all forex earnings from Tourism remains in Sri Lanka as
The industry does not import raw material and has no paybacks. The travel and leisure industry rebounded with the opening of the airports in September 2021 and started generating revenue since then with an income of around USD 400 million within the first three months this year, THASL past Vice President Asoka Hettigoda said.
The exposure of the hotel sector in the banking sector is in the mid single digit level while its contribution to the GDP is around 12. 5 percent far above the banking sector, Hettigoda said adding that the estimated debt including the accumulated interest now is estimated to be over 500 billion rupees.
The industry stakeholders called for swift intervention by the authorities to extend the moratorium without which would lead to adverse repercussions on the industry particularly the SME sector which has been the most affected segment since 2019.
The industry is on the verge of collapse and accommodation providers and other service providers are on the brink of closure or has already closed the official of THASL, SLAITO and ASMET said adding that hotels that employ over 70% of the workforce were able to sustain the staff and cover the basic costs due to the past relief measures.
“We had met the ADB and were due to meet other donor agencies to come to our rescue. They well understand the value of Tourism as they have provided financial assistance to the Tourism sector in many other countries to overcome challenging times. Unfortunately, in Sri Lanka, they are awaiting the signing of the IMF agreement to give any kind of commitment,” Hettigoda said.
The THASL and SLAITO members alone invest over Rs. 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.
The three bodies had presented their case to the Prime Minister, Governor Central Bank of Sri Lanka, Tourism Minister and even the leader of the opposition and hope they will understand the value behind this industry and its ability to bring in the much needed dollars to the country.