• THASL President M. Shanthikumar warns many hotels will close if debt moratorium not extended by another year
• Opines failure to give lifeline will endanger the pick-up in inflow of tourists
• Reveals booking trends indicate only 20-30% occupancy until April
• Cautions Govt., CBSL and all stakeholders that tourism industry should not be allowed to collapse due to any kind of crisis
• Estimates around 12% of country’s population is dependent on tourism

The tourism industry yesterday warned that many hotels will close if the debt moratorium is not extended for another year as the anticipated recovery remains elusive amidst rise in costs, especially electricity.

The Hotels Association of Sri Lanka (THASL) President M. Shanthikumar said the industry had several rounds of discussions with President Ranil Wickremesinghe, Central Bank Governor Dr. Nandalal Weerasinghe, Tourism Minister Harin Fernando as well as multilateral donor agencies such as the Asian Development Bank and others making a strong case for an extension.

“Even though we were very hopeful that the season will be good after stability returned to the country, the industry is presently experiencing very low bookings. Until April 2023 the hotels on average will not exceed 25 to 30% occupancy,” warned Shanthikumar.

“It is in this context as well as anticipated cost overruns that the moratorium must be extended. If not, most hotels will close down and there is a huge risk of the tourism industry collapsing,” THASL Chief emphasised.

He reiterated that hotels are an integral part of tourism and without accommodation tourism cannot survive.

“Due to the downturn in the economy, the cost of operations have skyrocketed. The energy costs increased to unfathomable levels. Some of these costs cannot be brought down. For example, if there were only 01 guest or 100 guests, a hotel has to keep the restaurants and public areas and swimming pools etc open. Air conditioning, lighting, purification plants, kitchen equipment etc have to keep working,” Shanthikumar explained.

THASL Chief was hopeful that President Wickremesinghe and CBSL Chief will be rational and take into account the continuous plight of the hotel industry and extend the moratorium.  This is critical to continue to cater to the inflow of tourists albeit still low in comparison to pre-COVID period.

“We shouldn’t let the tourism industry fall due to any kind of crisis. We are only requesting the Government to give us some breathing space and to allow us keep the hotels operational in 2023 without having to close down,” THASL Chief emphasised.

“Tourism is an important industry and plays a critical role to generate forex to the nation. Around 12% of the country’s population is dependent on Tourism as well,” pointed out Shanthikumar.

In 2022 Sri Lanka recorded the highest arrivals figure of 719,978 tourists post-COVID. Arrivals grew by 207% from 2021, but still 69% lower in comparison to record achievement of 2.3 million in 2018. Earnings from tourism in the first 11 months of 2022 grew by 313% to $ 1.3 billion from a lower base in 2021. In 2018 Sri Lanka earned $ 4.4 billion from tourism. Sri Lanka’s predicament is despite competing destinations having fully recovered post-COVID.

Shanthikumar opined that the negative perception created due to the political and economic crisis in 2022 followed by the mammoth protests made the travellers get an impression that the country is unsafe. “After stability returned the Sri Lanka Tourism Promotions Bureau (SLTPB) has not carried out an effective communication campaign over the past months to show the country is stable and it is safe for holiday travellers to visit,” he added.

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