Tourism industry scrambles over rupee fluctuations
A lack of consensus looms over Sri Lanka’s tourism industry about new changes proposed to permit transactions in dollars between hotels and travel agents. Expecting to make a ‘fast buck’ out of the recent frequent rupee fluctuations, the tourism industry has come up with a new problem as to who should benefit from all of this.
Some term it as a benefit to the industry while others opine it could be detrimental since all stakeholders would request for this to be extended to them as well.Business Times spoke to the industry heads to ascertain their views. Tourist Hotels Association of Sri Lanka (THASL) President Anura Lokuhetty said this proposal was very important as it was made at a time when the dollar was constantly fluctuating.He pointed out that since they were unable to obtain rupee loans dollar transactions this would allow them to obtain foreign dollar loans.
Commenting on the gains made by the industry, he explained it could provide for massive investments for construction of hotels.
While charter operators currently pay in dollars, it was observed that this new proposal should help travel agents as they were paid in foreign currency and using the exchange rate change “becomes a mess.”
If jewellery shops and the garment industry could be engaged in this type of transactions, he questioned why this could not be extended to the tourism industry as well.About three weeks back discussions were held with the Economic Development Ministry officials who are believed to be in favour of the proposal, Mr. Lokuhetty said. The current practice however, is for both the Sri Lanka Association of Inbound Tour Operators (SLAITO) and THASL to gether with the Ceylon Chamber of Commerce (CCC) to meet twice a week to fix a rate that would be used within the industry.
Although the client would pay in dollars the transactions would be carried out against the dollar rate and paid back in rupees, new SLAITO President Mahen Kariyawasam.Appointed just last week at its recent AGM, he said this move would create a demand for other stakeholders within the industry to make payments with tourists and travel agents in dollars.
Mr. Kariyawasam explained that paying in dollars would undermine the Sri Lankan rupee noting that this could become an issue in the future.At present hoteliers were said to lose only a marginal amount of 0.5-1%, he said adding that if the new proposal should get underway it could result in the travel agents losing out.
He observed that despite fuel price hikes or increases in entrance ticket they could not pass it onto bookings that were already made. In this respect, he said the fixed rate was the “cushioning effect” but agents would stand to lose this as well under the new proposal.
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