THASL calls on govt. to respond to debt restructuring request

As the debt of Sri Lanka’s crippled tourism sector exceeds Rs.300 billion, the Hotels Association of Sri Lanka (THASL) called on the government to respond to their repeated pleas for assistance.

In a statement to the media earlier this week, THASL said it would like to remind the government and the Central Bank (CBSL) once again on the need to restructure and reschedule tourism related debt.

“We urge the government to respond now and to take a proactive approach to the emerging debt crisis, before it is too late. 

 “THASL is convinced that without the proposed debt restructuring and rescheduling the hotels and tourism service providers will collapse, with unprecedented consequences on the banking system and livelihoods,” the Association said.

According to THASL, the debt of the tourism sector stands at a record breaking figure of Rs. 350 billion. The quoted figure is without taking into consideration the “growing burden” of capitalised interest that is mounting since April 2019. 

 Asserting that the industry is in distress, the Association put forward three proposals for consideration.

The first is to have an interest forgiveness and waiver programme where all accrued and capitalised interest on tourism debt from April 2019 until December 2022 is waived by the government.

The second is to kick off a debt restructuring programme where all outstanding debt is restructured and re-profiled with up to 10-year repayment period on a low interest rate.

Lastly, the Association requested for debt moratorium to be extended, where all tourism debt repayment is frozen until December 2022. 

THASL said it does not expect the local tourism scenario to return to pre pandemic levels before December 2022, and to pre-Easter attack levels until December 2023.