The storm shall pass and we will bounce back stronger, says THASL President

Sanath Ukwatte

Following is the full speech made by The Hotels Association of Sri Lanka (THASL) President Sanath Ukwatte at the Association’s 2020 Annual General Meeting.

Our Chief Guest, the  Prasanna Ranatunge, Minister of Tourism and Aviation has informed us that he is travelling from Bentota and getting slightly delayed. He has requested us to start the proceedings. Our Guest of Honour, Ajith Nivard Cabraal, Minister of State for Money and Capital Markets and State Enterprise Reforms, Members of the government, the Management Committee of THASL, friends from the media, dear industry colleagues present here and connected to this event online and the President and Past Presidents of the apex body of incoming travel agents of Sri Lanka (SLAITO), ladies and gentlemen. 

 A very warm welcome to all of you to our 55th Annual General Meeting reception. The Hotels Association of Sri Lanka completing 55 years of service to it’s members is no doubt a great achievement in itself. 

Today we have over 240 members in our Association. I thank the membership for electing me as the President for the 5th consecutive time and placing your trust and  confidence in me. I am proud to say that despite the challenges our industry is still facing, our Association continues to achieve its goals of delivering value to its members and to be a strong voice in our community. 

This would not have been possible without the support and the perseverance of the Management Committee, past Presidents, our Regional Heads, the CEO, and the secretaries, all of whom who have contributed their time to our Association. And my special thanks go to all them. 

As the ongoing Covid19 pandemic has completely turned the word topsy-turvy, we are today conducting this event with limited attendees, who are maintaining social distancing. We call this the new normal. It is sometimes said that individuals are far less important in the march of nations than historical trends and development. This may be broadly true, but there certainly are exceptions. The right personality in the right place can make all the difference. 

We in the tourism industry have no doubt that this certainly applies to my friend, the Nivard Cabraal. He brings to the management of our economy a proven track record, a firm grasp of concepts, a background of knowledge and experience, and the most enacting standards of professional competence. We are quite certain that his insights and dedication will have a decisive impact on preserving the vitality and prestige of the tourism industry in Sri Lanka. 

A very warm welcome to the Secretary of ministry of tourism and aviation Hettiachchi, Chairperson and also the Direction General  of Sri Lanka Tourism for being here this evening. On behalf of the industry, I wish to convey our deep appreciation for the wonderful job all of you are doing to get the industry to greater heights with some innovative ideas.

The pandemic
 With closed borders and cancelled flights, COVID-19 has not only destroyed world economies but it has also transformed the world of travel bringing the local hotel industry to a virtual standstill. 

 After a distressing year, things are beginning to look brighter, as we begin to get on the right track. With the planning of the staggered opening of borders from Boxing Day, we are hopeful that our Industry will begin its path to recovery in 2021. We are honoured to have Udayanga Weeratunga, former ambassador who has almost single handedly arranged 38 charter flights from Ukraine, Russia and Kazakhstan to come between end December and January as a pilot project prior to formal opening of the airport. 

This will help the industry to understand the new health protocols before the country opens up to welcome foreign visitors. 

People’s desire to travel, explore and experience remains very strong. People all over the world are craving for social contact, family gatherings, parties, weddings and of course holidays. 

It’s natural that people want to travel and enjoy their lives. It’s in our DNA.  No pandemic can stop that. So, our industry is not dead. We are confident that we will come out of this crisis stronger than ever. I have no doubt in that.

 We will bounce back but it will take at least two years to fully re-bounce. Even though an implementation of an effective vaccine and immunity passports are fast becoming a reality, more and more travellers will be confident of going on long-haul holidays, we must understand that travelling will look different than it did pre-pandemic. 

It’s my belief that as an industry we must go forward with caution. A recent TripAdvisor survey showed that travellers are more likely to consider a hotel’s health and safety practices before making bookings. So, we must accept and adapt to the new normal for the time being. 

 Wearing masks, using sanitizers, screening tools, reducing touch points and social distancing in hotels are all healthy habits. These may fade away over time but in these extraordinary times, we must adapt. It’s similar to how post terrorism events have changed how we travel for good and how we enter a hotel, especially in the city or any internationally branded hotel in the country. 

Although, it may increase our operational cost slightly and it may require investment to implement these measures I believe as a responsible industry which is engaged in people to people contact, we must provide an experience that is as safe and cautious as it is enjoyable to our guests. 

 We are confident that the Government’s COVID19 health guidelines, will build up visitor confidence in our hotels and the country. It will spread the message that Sri Lanka is a safe place to travel. 

 Therefore, I wish to convey our thanks to the Minister of Tourism who is doing a magnificent task in getting our industry back on track and to Sri Lanka Tourism for developing these Guidelines for hotels after extensive discussions with our Association and with the Ministry of Health. 

 Not stopping at that SL Tourism has implemented a monitoring method for these guidelines through international auditors, which will add more credibility to the entire process and will benefit the travelling public, hospitality staff and our citizens because it will give certain assurances that hotels are safe places to visit. 

 People have a genuine fear of infection, and we believe that these guidelines are important to restore the confidence of the visitors. 

 Tourism remains the worst impacted industry in the country from the pandemic. And, since our industry consists mainly of small and medium businesses,  THASL is doing everything we can to help you stay afloat. We are thankful to our people for their understanding, and the government for enabling our survival.

THASL’s initiatives
Several initiatives were taken by THASL post the Easter Sunday Attacks to assist our members in strengthening their respective security in hotels across the country.

Last year our AGM saw an unprecedented number of members attending. It was a great privilege to have had Sir Tim Clark, President of Emirates Airline  gracing the occasion together with other dignitaries. Sir Tim’s visit endorsed Sri Lanka as a ‘safe to travel’ destination once again and boosted the morale of our industry.

Following WHO declaring COVID-19 as a pandemic, THASL looked at some of the best practices in Health and Safety followed by international brands and circulated same to our members for their knowledge and understanding.

We worked closely with SLTDA to formulate the SLTDA Health and Safety Guideline for hotels which is an extended version of the Ministry of Health guidelines. 

In partnership with MDF and SLTDA, a ‘Health and Safety’ awareness programme on the guidelines was carried out in 12 regions to reach the senior management of hotels across the country. 

But THASL’s work did not stop at looking after the health and well-being of our members, we realised that the hotel sector was going to be the victim of a double blow and that immediate Govt assistance would be required to protect the survival of our industry.

We carried out extensive lobbying with the Government, including the Treasury, the   Central Bank, the Tourism Ministry and the SLTDA and are thankful for the support we received. We also arranged a series of webinars and media interviews with senior hoteliers to communicate the gravity of the situation faced by the industry.  

Through THASL’s sheer effort we were able to obtain the following support measures for our industry:
a) Exemption from VAT;
b) Abolishing NBT;
c) A moratorium on capital and interest on hotel related debt and an extension on loan repayment periods;
d) Low interest working capital loans for tourism businesses to survive the crisis; and
e) Moratorium on loans obtained by tourism industry employees. 
We are grateful for the Government to the support they have provided us.

THASL’s requests
However, this pandemic is unprecedented and for Sri Lanka’s tourism industry, the twin crises of the Easter Sunday attacks and COVID-19 has been crippling. No other major tourism destination has suffered like we have in these last two years. 

This has created a grave situation for our industry. Ours is an industry that has never lost faith in Sri Lanka. Even during our 30 years of war, we continued to invest and believe in our country. Since 2009, we have invested nearly US$ 10 billion in new developments. I do not know if any other industry has invested so much in the country. But, from generating over US$ 4.5 billion in foreign exchange earnings in 2018, today we are earning almost none,  and through no fault of ours we have been crippled. And in our time of need, we ask the government to invest and continue to have faith in our industry.  

We request the following from govt. 
a) First, to introduce a Government backed and guaranteed long term debt restructuring mechanism for the tourism industry. This should include an interest waiver for two years commencing April 2020. Today, the tourism industry is in over Rs 350 billion in debt. 

   This is an unsustainable level considering tourism has suffered from no receipts from foreign visitors for nearly  two whole years.     

                                              
   Of course Local business has helped us immensely meet some of the overheads,  but industry like ours with huge capital outlays and employees can not sustain only on local business. Local business accounts for only 20 percent of revenue. Once the moratoriums are lifted, we are concerned that there will be a large number of defaults, and high unemployment.             

                                
  We are thankful to the Minister for appointing a Ministerial Committee headed by the Additional Secretary to Tourism Minister to look into this.

   However, time is of the essence. There is no tourism with shut hotels. Other tourism destinations are looking at establishing an asset management agency for tourism related debt. A similar approach was followed for housing debt during the 2008 financial crisis. And there are many other  solutions which we can consider.     

               
   We urge  the Government to play a proactive role,  as solving our debt crisis until such time the industry recovers is a task of great importance to all our members, big and small. 
 
b) Our second ask is for a moratorium on all hotel electricity bills to be extended till March 2021.  Reduced occupancy has not meant reduced inventory for hotels. Our bills remain high as our properties must be maintained. Our occupancy levels with domestic tourism is not enough to pay our staff salaries. We are not in a position to pay our electricity bills until there is some recovery in tourism.
 
c) Our third ask is to settle the long outstanding matter of discriminatory municipal and local government taxes, which have still not been addressed. We are simply asking the Government to place us in the same category as all other industries and charge the same levy as others from the inception. Tourism is subject to an unfair municipal tax of 1 percent of total revenue. This is not a tax on profit or room nights. This is a tax on our revenue, irrespective of whether we make a loss or not. It is unfair, unsustainable and should be abolished. 
 
d) Our fourth ask is to implement the Cabinet approved wage support scheme for the most vulnerable staff in tourism. The Cabinet already has approved this scheme, which is similar to other schemes adopted across the world. However, it is still not implemented.
 
e) Our fifth and final ask is to either refund or extend our current excise licence fee to next year. Our restaurants and bars have been mostly closed this year. Yet, we have paid our excise licence fees to the Government. I am certain you agree that it is both unfair and unsustainable for hotels to pay licence fees when we have had to close our bars and restaurants on Government instructions. 

 
We sincerely hope that the government and officials present here would grant us these requests. We are happy to actively participate in implementing these decisions and provide you with all the necessary assistance. It is in all of ours interest that tourism survives these extraordinary and unprecedented twin crises. 

 We understand the pressures the government is under and are grateful for the support we have received so far. We have braced ourselves to contend with the current adverse circumstances, and we are deeply appreciative of the Government’s sustained efforts to support us in every way. In particular, we are highly appreciative of the support we have received from President Gotabaya Rajapakse.           

                       
His views on tourism contains many valuable insights regarding the development and expansion of the tourism sector in particular, incentives to attract high value tourists and greater professionalism in marketing our country’s unique potential. 

For our part, we have the firm resolve to work in partnership with the Government. I am confident we can work together, to protect Sri Lanka’s gift to the world – our tourism industry. 
 
Concluding
This period has also been an ideal time for us to turn the searchlight inwards and to ask what  our industry can do to revive post Covid tourism. Tourism is a widespread industry. In Sri Lanka, We have reached every nook and corner of our paradise island. We bring people together across cultural, religious and national borders. We help people experience, appreciate and celebrate differences. Through tourism, we show that diversity is strength and not something to be feared. People all over the world travel to Sri Lanka because they value and celebrate our diverse offerings not just our historic and natural diversity but the diversity and vibrancy of our people.
 
Tourism can therefore easily be a catalyst for both economic and national solidarity. As I speak, there are new hotel investments happening in the country. 

They are creating job opportunities for our youth, women and other marginalised people and giving hope to many more. In our industry, we believe-in and strive for equal opportunity for all. We are Sri Lanka and we celebrate Sri Lanka in all her glory.

We believe that our strength is in our people and their resilience and that our smiles will turn the darkest of days to the brightest of moments. That is why I am confident that we will succeed and come out of this crisis stronger than ever. 

My friends, this storm shall pass and out of it, will come a stronger, more confident industry and nation.