ECONOMYNEXT – Sri Lanka’s hoteliers have urged the government to extend the industry’s debt moratorium and implement the cabinet approval that was given to extend the moratorium that ends on June 30 by another six months.

Hiran Cooray, the past-President of the Hotels Association of Sri Lanka (THASL), urged the government to extend the loan moratorium by six months.

“One of the ways Sri Lanka can recover and earn is through tourism. That is why we are appealing to everybody: we need to bounce back and bounce back fast,” said Cooray.

“I strongly believe we can earn one billion dollars but for that tourism must survive. We have been requesting a moratorium [among other things]. That is just to make sure the tourism plant does not close down. We need the help to go forward.”

On June 08, the cabinet of ministers approved a proposal to extend the debt moratorium till the end of the year.

The industry’s debt is about 500 billion rupees, officials said.

However, the authorities have yet to extend the moratorium.

“We are not asking too much, and it is just for a period of six months,” said Anura Lokuhetty, Vice President of the Galle Face Hotel, speaking at a conference.

“We can’t understand why they should even think twice about it. Already there is cabinet approval. Its a case of implementing, which needs to be done immediately.”

Lokuhetty warned it will be a national disaster if the hotels and accommodation service providers are allowed to close down.

“It is a very dangerous situation. If the moratoriums are not extended the whole hotel sector will collapse and with the failure of the hotel industry all the other dependent sectors such as three-wheeler drivers, fisheries, food and beverages all will be affected.”

Hoteliers said many of the hotels are finding it difficult to pay salaries.

However they say they are confident that with the removal of travel advisories the industry will recover faster, despite a drop in air frequency.

The industry is also talking to the International Finance Corporation ( IFC) and the Asian Development Bank (ADB) to restructure their loans and are looking at green bonds.

“THASL started this discussion in 2021 but the then government was reluctant to obtain any foreign facilities because there was a belief there was enough money,” Asoka Hettigoda, Chairman and Managing Director at the Siddhalepa Group said speaking at the conference.

“However, when we approached ADB, they were keen to help us but they are waiting for Sri Lanka to sign a letter of intent with the International Monetary Fund (IMF).”

Hettigoda said the industry has prepared a proposal on how it’s going to pay and restructure its loans.

“We have discussed several options including a special purpose vehicle, bank-to-bank concept. We have looked at obtaining facilities from foreign donor agencies. We have also discussed a new concept of green bonds,” he said.

“Our current request is to look at these six months. We want to urge the government to immediately make this decision and not to let us get into non-perfomring loans.”

From January to April, the industry has earned 600 million US dollars and aims to earn about a billion dollars in the next six months.

However, air frequency to the island and tourist arrivals have more than halved with daily tourist arrivals numbering around 1,000. (Colombo/Jun29/2022)