Financial sector faces risks of collapse if tourism loans unaddressed: stakeholder

• Tourism loan exposure estimated at Rs.500bn

By Yohan Perera 
Sri Lanka’s financial sector could collapse if the current tourism sector debt portfolio which is around Rs.500 billion is not addressed soon, a tourism sector stakeholder said.

Chandana Amaradasa, a travel and tourism sector industry stakeholder said the total debt portfolio of the tourism sector is around Rs.500 billion currently. 

“The total debt portfolio of the tourism industry was Rs.300 billion in 2020, but it has risen to a staggering Rs.500 billion currently. This will result in the fall of the financial sector if not addressed urgently,” Amaradasa stressed. 

“In addition, only a few foreign aircraft are flying to Sri Lanka because of the present dollar crisis. There are 300,000 people directly involved in the tourism industry. Around 40 percent of the employees have gone out of the industry at the moment,” he noted. 

“Some industry members have asked for an extension of the debt moratorium. This is necessary.  Also, a high-powered committee has to be appointed to look into the revival of the tourism industry. Also restructuring the national airline is also necessary.  

I recommend that the government absorbs the debts of SriLankan Airlines in order to clean the balance sheet. Either the government can assign an expert company to manage it, or it can go for a public-private partnership. The revival measure should be implemented soon so that the tourism industry can gear itself for winter sales, which will begin from August,” he added.