• Hoteliers thank CBSL Governor for mandatory forex payments 
• CBSL stipulates new guidelines via Extraordinary Gazette 
• All SLTDA registered hotel service providers have to sell accepted forex to banks or credited into a Business Foreign Currency Account of the hotel service provider, within 3 business days 
• Same applies to all payments made through electronic fund transfer cards
• Hotels can accept payments in rupees from foreigners on submission of original documentary evidence to effect that such local money represents forex converted through authorised dealer 
• All hotel service providers required to submit statements to SLTDA and CBSL

THASL President M. Shanthikumar

CBSL Governor Nivard Cabraal

The Hotels Association of Sri Lanka (THASL) yesterday declared that requiring non-residents to pay in foreign currency augurs well for the tourism industry and the country as it would boost reserves and encourage aggressive destination marketing.

On Friday, the Central Bank (CBSL) via an Extraordinary Gazette stipulated new guidelines following Monetary Board approval.  

“We are very grateful for the prompt action taken by CBSL Governor Nivard Cabraal to assist the hotels by bringing the required regulations into place with immediate effect,” THASL President M. Shanthikumar said. 

“The Hotels Association of Sri Lanka on behalf of the entire Hotels sector in the country thank Governor Cabraal for understanding the plight of hotels and for making it mandatory for hotels to receive their dues in foreign currency from all agents, individuals and others for accommodation and other services provided for non-residents.” 

Shanthikumar said Governor Cabraal, in a detailed discussion, well understood the liabilities of the hotel sector in terms of settling foreign currency loans and interest payments, import of machinery, and advertising and promotional costs for direct marketing in international markets to increase arrivals.

“This (latest CBSL move) will undoubtedly help the country to acquire much needed foreign currency to flow into the established formal channels which will assist the Government's economic growth efforts. It will also help hotels to be even more aggressive in promoting Sri Lanka and overseas to increase the tourist arrivals for the future,” Shanthikumar emphasised. 

He said the hotels sector was the largest investor in the tourism industry with over $ 15 billion and was a key player in attracting tourists with its diverse and unique product offerings with hotels/villas situated in different parts of the country.

Shanthikumar said the accommodation sector also had the highest work force in the entire tourism industry and contributed the highest revenue to the Government. He added that tourism earnings stood as the number one net foreign exchange earning industry with over 90% revenue floating in foreign currency to the country during normal times.

“The Government has been extremely supportive. We are appreciative of the Government relief extended to the tourism industry during these extremely troubled times and thank the leadership for the same,” Shanthikumar said. 

The Government is relying on a quicker rebound of the tourism sector to boost foreign reserves. Two years of the pandemic saw the country losing a potential foreign exchange earnings of $ 10 billion from tourism. Actual earnings in 2020 and 2021 amounted to only $ 1 billion, whereas in 2019 it was $ 3.6 billion despite the Easter Sunday attacks in that year. In 2018 earnings from tourism were a record $ 4.4 billion.

The Extraordinary Gazette (No. 2263/31) requires hotel service providers registered with and licensed by the Sri Lanka Tourism Development Authority to accept payments in respect of services rendered to persons resident outside Sri Lanka only in foreign exchange with effect from 21 January.

Foreign currency so accepted should be sold to a licensed commercial bank or to a permitted licensed specialised bank or credited into a Business Foreign Currency Account of the hotel service provider, within three business days from the date of acceptance of such foreign currency.

All payments made through electronic fund transfer cards should be credited into a Business Foreign Currency Account of the hotel service provider.

A hotel service provider may accept payments in respect of services rendered to a person resident outside Sri Lanka in rupees provided that such person submits original documentary evidence to the effect that such rupees represent the foreign currency brought into Sri Lanka by persons resident outside Sri Lanka and converted through an authorised dealer or restricted dealer.

A hotel service provider should endorse the original documents provided to him by a person resident outside Sri Lanka and retain copies of such documentary evidence for a period of six years or such other record keeping period imposed by law as may be applicable, from the date of acceptance of such rupees.

All hotel service providers should submit reports and/or statements to the Sri Lanka Tourism Development Authority with a copy to the Department of Foreign Exchange of the Central Bank of Sri Lanka, as may be required from time to time, by the Director General of the Sri Lanka Tourism Development Authority and/or the Director of the Department of Foreign Exchange of the Central Bank of Sri Lanka.

All hotel service providers are required to provide unencumbered access to the officers of the Central Bank of Sri Lanka, as may be authorised by the Governor or the Deputy Governor, as the case may be, to inspect or examine the records maintained for the purposes of these rules, and review all actions taken by such hotel service providers in ensuring full and strict compliance with these rules.

The Director of the Department of Foreign Exchange of the Central Bank of Sri Lanka has the right to initiate action against any non-compliance with, or transgression of these rules, by any hotel service provider.

 

Sri Lanka draws nearly 59,000 tourists in first 22 days of Jan.