Thursday Nov 14, 2024
Thursday Nov 14, 2024
Tuesday, 29 June 2021 02:29 - - {{hitsCtrl.values.hits}}
The Hotels Association of Sri Lanka (THASL) yesterday renewed its cry for urgent restructuring and rescheduling of tourism-related debt worth Rs. 350 billion.THASL added that this figure did not take into consideration the growing burden of capitalised interest in an industry that has been crippled since April 2019.
“THASL does not expect tourism in Sri Lanka to return to pre-pandemic levels until December 2022 nor back to pre-Easter Attack levels until December 2023. Hotels and tourism service providers have, as a consequence, become highly leveraged and distressed,” the industry’s leading body said in a statement.
THASL's solution to the debt crisis is as follows:
1. An interest forgiveness and waiver program – where all accrued and capitalised interest on tourism debt from April 2019 until December 2022 is waived by the Government.
2. A debt restructuring program – where all outstanding debt is restructured and re-profiled with up to a 10-year repayment period on a low interest rate.
3. Extension of the debt moratorium – where all tourism debt repayment is frozen until December 2022.
THASL said it is convinced that without the proposed debt restructuring and rescheduling, hotels and tourism service providers will collapse, with unprecedented consequences on the banking system and livelihoods.
“We urge the Government and the Central Bank to respond now and to take a proactive approach to the emerging debt crisis, before it is too late,” THASL said in its statement.
Sri Lanka tourism fared best in 2018 with 2.33 million arrivals earnings over $ 4.3 billion. In 2019, earnings dipped to $ 3.6 billion and 1.9 million arrivals due to Easter Sunday attacks and further to $ 0.7 billion and 507,704 arrivals due to COVID pandemic.
Since the reopening of borders in late January after a near 10-month COVID-induced closure, over 18,000 tourists have arrived. The Central Bank early this month said estimated earnings from tourism in the first four months of this year to be at $ 19 million, substantially low in comparison to $ 682 million earned in the first four months of the last year – the tail end of which saw the onset of the COVID-19 pandemic.
