Tourism sector disappointed for largely being ignored in Budget 2022

By Shabiya Ali Ahlam
The hard-hit tourism sector players expressed their displeasure on the Budget 2022 as despite much hope for State support for a quick recovery, the industry was largely ignored in the government’s policies proposed for the coming year.

Industry stakeholders across all segments of the local tourism sector had several representations with relevant authorities where proposals were also handed over to take into account during the consultation process of the budget formulation. 

 However, the repeated pleas for further assistance have fallen on deaf ears.

“We met with the authorities several times and discussed our situation. We were given some hope that this budget will address some of our major issues. But unfortunately, that was not done,” said The Hotels Association of Sri Lanka (THASL) President Sanath Ukwatte, presenting his views on the Budget 2022. Speaking on behalf of the industry at the KPMG Budget 2022 analysis webinar, Ukwatte said the lack of fiscal space in the current economic context is well understood, but as a high revenue generator for the country the sector was looking forward to proposals that would create a win-win situation for all. “I guess it is still under consideration, and we hope that the government will address this in the future,” he added.

One of the key proposals put forward by the tourism sector was the need for a debt restructuring exercise that would help tourism related businesses to stay afloat.

As of June 2021, the debt of the tourism sector as a whole stood at a record-breaking figure of Rs.350 billion. The figure excludes the growing burden of capitalised interest that is mounting since April 2019.

THASL has maintained that without a debt restructuring and rescheduling effort, hotels and tourism service providers will collapse.

A debt-restricting exercise for the tourism sector remains critical going forward given that the extended moratoria on the sector will expire in June 2022.

“This is our primary and number one need right now. We cannot afford to extend this moratorium.

The clock is ticking every day and we need to find a long-term solution because we are unfortunately sitting on a mountain of debt. We need to adjust this. We need support in order to do that,” Ukwatte asserted.