Tourism revival Cabinet Sub-Committee meets today to iron out relief package teething issues

• Industry concerned by “case by case” moratorium relief 
• Stresses that original request was blanket support 

By Charumini de Silva

The Cabinet Sub-Committee tasked to revive tourism post-Easter Sunday attacks is scheduled to meet in full today, to iron out teething issues related to the relief package approved on Tuesday.

Finance Minister Mangala Samaraweera and International Trade and Development Strategies Minister Malik Samarawickrama, who could not attend the inaugural meeting last week due to being overseas, will participate at today’s meeting, along with five other Ministers of the Committee chaired by Tourism Minister John Amaratunga. The other members are: Transport and Civil Aviation Minister Arjuna Ranatunga; Internal and Home Affairs Minister Vajira Abeywardena; Minister of Primary Industries Daya Gamage; and Non-Cabinet Minister of Economic Reforms and Public Distribution Dr. Harsha de Silva.

Sources said that the travel and tourism industry was wary over teething issues concerning the Government relief package, as banks are slow to act on the assured moratorium on capital and interest repayment, whilst 15% VAT continued to be charged, as opposed to the Government stating it will be reduced to 5%.

Tourism industry leaders said that the original demand was for a blanket moratorium, whereas the Central Bank direction to banks were “on a case by case basis”, and banks “may” consider. 

When contacted by the Daily FT, Tourist Hotels Association Chairman Sanath Ukwatte clarified that at the meetings with both President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe, the industry representatives categorically stated that the one year moratorium must be blanket. The industry insisted the same when the Central Bank expressed reservations.   

“We objected to the case-by-case proposal even during the discussions, and agreed we get a common coverage for all companies registered under SLTDA. In the past, Government refinanced interest rates and gave a blanket cover to all travel industries at the need of the hour,” Ukwatte stressed.

Given the stalemate, the travel and tourism industry has also sought an urgent meeting with Treasury SecretaryDr. R.H.S Samaratunga and Central Bank Governor Dr. Indrajit Coomaraswamy to clarify matters. 

Whilst THASL, the City Hoteliers Association and Inbound Tour Operators (SLAITO) welcomed in principle the relief package, approved by Cabinet on Tuesday and made public by State Minister of Finance Eran Wickramaratne on Wednesday, the lack of sincerity in extending wholehearted support has made the tourism industry frustrated.

The 21 April Easter Sunday extremist terror attacks on three churches and an equal number of five star hotels killed nearly 260 people, including 45 foreigners, and injured over 500. Tourism, which accounts for 6% of GDP, earned $ 4.4 billion in foreign exchange earnings, and impacts the livelihood of 2 million people,has been the worst affected.  Tourist arrivals plunged by 60-70% since the Easter Sunday attacks, whilst occupancy in city hotels has crashed to 5%, and overall countrywide to below 10% from 75% previously.

The industry is also concerned that relief was not extended to employees, whose service charge income has dwindled, and who are facing serious issues in servicing personal loans and leases. 

Apart from the one year moratorium, the Government offered 2 year working capital loans at a concessionary 3.4% interest rate for the travel and tourism industry, to tide over the immediate challenges, whilst all imported security equipment was made duty-free.