Cabinet to agree today on lifeline for Easter Sunday terror-crippled tourism

Cabinet sub-committee tasked with reviving tourism post-Easter Sunday terror attacks at their first meeting yesterday along with industry representatives

By Nisthar Cassim

The Cabinet meeting today is expected to agree to a crucial lifeline for the Easter Sunday terror-attacks crippled tourism sector, as the country limps back to normalcy with safety and security.

A host of recommendations put forwarded by the travel and tourism industry came under the microscope yesterday, at the first ever Cabinet-appointed Sub Committee of seven Ministers tasked to revive the tourism industry, the worst hit by the extremist-led 21 April terror attacks in churches and five-star city hotels, which killed over 250 including 44 tourists and injured over 500.   The cry to survive by the $ 4.4 billion tourism sector, suffering from 60-70% drop in tourist arrivals and 5% occupancy, as opposed to 75% prior to Easter Sunday, is following strong representations made by the industry, led by Tourist Hotels Association of Sri Lanka (THASL) and Sri Lanka Inbound Tour Operators (SLAITO), to President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe last week. Daily FT learns that the relief to be approved by the Cabinet at today’s meeting includes a moratorium on capital and interest repayment for one year of the loans taken by the travel and tourism industry, soft loans for working capital and cash flow related borrowings, removal or reduction of 15% Value Added Tax and 2% Nation Building Tax on room rates, and duty-free import of latest security equipment. An aggressive public relations campaign, along with lobbying for a change to favourable travel advisories from the present adverse ones from nearly 40 countries, and a Government-backed travel insurance guarantee for willing tourists, are some of the other measures that the Cabinet may consider. 

Another is a freeze on repayment commitment of loans and leases taken by employees in the travel and tourism sector. 

The justification for such support for the tourism sector is that it accounts for 6% of the country’s economy, and is responsible for the livelihood of around 2 million people. 

Most of the industry recommendations were considered favourably by the Cabinet Sub-Committee chaired by Tourism Minister John Amaratunga, and comprising Transport and Civil Aviation Minister Arjuna Ranatunga, Finance Minister Mangala Samaraweera, Development Strategies and International Trade Minister Malik Samarawickrama, Internal and Home Affairs Minister Vajira Abeywardena, Minister of Primary Industries Daya Gamage, and Economic Reforms and Public Distribution Non-Cabinet Minister Dr. Harsha de Silva. Either being overseas or indisposed, Ministers Samaraweera and Samarawickrama were absent at yesterday’s meeting, which included a select group of business leaders in the likes of  Harry Jayawardena, Dhammika Perera, and Sanjiv Gardiner, who have extensive exposure to the leisure sector. Representatives of premier blue chip John Keells Holdings, which also has a wide footprint on the leisure sector, were present. 

Sources said that at the informal pre-Cabinet meeting last night, there was consensus on the urgency of support needed for the tourism sector, as proposed by Minister Amaratunga. 

Last year, Sri Lanka attracted a record 2.3 million tourists, and was forecasting 2.7-8 million arrivals this year. However, given the impact of Easter Sunday terror attacks, estimates were revised for a 30% dip by year-end, and a loss of $ 1.5 billion in foreign exchange earnings. 

However, Sri Lanka Tourism Chairman Kishu Gomes and industry heads expressed hope for a quicker recovery, provided the security situation improves and there are no further incidents, as well as a stepped-up PR and advertising campaign, in tandem with removal of adverse travel advisories.