More dollars please!!
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I was tired of the rantings by the trio as they often – week in week out – discuss the problems in the country – queues for gas and milk powder, shortage of other essentials etc. It’s depressing to listen to these negative developments over and over again. However, this week there was a pleasant surprise in store for me as they discussed a more positive development: The pick-up in tourism.As Aldoris, the choon-paan karaya, left the neighbourhood on Thursday after his daily sales exercise, the trio retired to the margosa tree with their hands full of ‘maalu paans’ and mugs of tea. “Mata den ahenawa ape sancharaka anshaya den hondai kiyala (I hear tourism is doing well now),” said Kussi Amma Sera, settling down to her breakfast and tea.
“Hotal wala weda karana mage samahara nadeyo den santhoshai egollange rassawal aarakshithai kiyala (Some of my relatives who are in the hotel trade are happy because their jobs are secure),” noted Mabel Rasthiyadu.
“Ape balaporoththuwa sancharaka anshaya hondata wei kiyala, aapahu lokdown ekakata muna denne nethuwa (We hope it will do well and will not be affected by another lockdown),” added Serapina.
It was ironic that they were discussing tourism as this was the topic that I was working on after a conversation on Wednesday with ‘Koththamalli’ Fernando, the Kokatath Thailaya (oil for any ailment) expert who has a remedy for any issue. He was discussing tourist arrivals and hoping this would rejuvenate the wellness industry which he is a part of.
“I hope the Europeans will start coming back. They are heavily into wellness and generally use our Ayurvedic spas and treatments,” he said, adding that wellness was also somewhat popular among visitors from the former Russian states like Ukraine and Kazakhstan, which are key tourism source markets for Sri Lanka these days.
“I think it will pick up though quite a few of the arrivals, particularly during December, were Sri Lankan expatriates,” I said.
There have been mixed views about increasing tourist arrivals: While hoteliers welcomed the resurgence of tourism, the travel trade is of the view that since many are Sri Lankan expatriates they may not be spending large sums of foreign currency in the country and also not staying at hotels or using the trade services of those dependent on tourist income. Sri Lankan expatriates who have foreign passports are considered ‘foreigners’ at the immigration counters and thus come under the ambit of ‘tourists’.
Koththamalli was, however, positive on tourism trends saying that Sri Lanka Tourism had projected a target of 1.2-1.3 million arrivals this year on the basis of an average 100,000 per month. “I think we will recover,” he said enthusiastically and thereafter after discussing other trends in the industry, we ended the conversation.
While up to 1.3 million tourists are expected this year, last year’s arrivals totalled 194,495 (as the country recovered from COVID-19 lockdowns and other disruptions) and India was the country’s highest source market in 2021, accounting for 89,357 visitors.
India was followed by Russia, the UK, Germany and Ukraine in the top five markets, while France, the US, Kazakhstan, Canada and China constituted the other top five source markets.
Tourist arrivals totalled 89,506 in December 2021, a marked improvement from previous months, largely due to Sri Lankan expatriates catching up with relatives and friends here, but far short of 253,169 recorded in December 2018, Sri Lanka’s best year in tourism with a total of 2.3 million arrivals that year.
As far as tourism earnings are concerned, 2018 recorded the highest-ever earnings in foreign exchange of US$4.3 billion, making it the third-largest source of foreign exchange after migrant worker remittances and garments’ exports. Due to fewer arrivals, foreign earnings from tourism last year were just $261 million, while it was $682 million in 2020 (when tourism existed for a few months only before the airports were closed).
There were other multiple developments in the tourism industry with the Central Bank this week reiterating that hotel service providers can only accept foreign currency as payments for services rendered to tourists and non-resident Sri Lankans.
However, the banking regulator said that hotels can accept payments in Sri Lanka rupees provided those using these services submit original documentary evidence to prove that such rupees represent the foreign currency brought into Sri Lanka and converted through a licensed bank or an authorised money changer.
Until this regulation came into force, all payments by foreigners and non-resident Sri Lankans had to be made – through an archaic law – in rupees. Since hotels gave a low foreign exchange rate, foreigners would exchange their dollars at banks or money exchange dealers who offered a better rate of exchange.
According to the new rule, hotel service providers are required to deposit such foreign currency into a Business Foreign Currency Account of the hotel service provider or sell to a licensed bank within three business days.
The move was welcomed by hotels which said this would help them repay their foreign currency loans with dollars earned through hotel services. But small-time hotel owners and guest houses were wary of the development saying they would not have enough foreign currency cash to settle bills if some balance, after settling the bill, had to be returned to customers.
In other related developments, some weeks back hotels were facing a serious cooking gas shortage with one 5-star property reportedly using firewood in their kitchens, amidst other shortages.
Some local tour operators said they are being asked by overseas operators whether the shortage of essential food in the country could affect the tourism industry. That situation, however, has eased.
Another development which drew the ire of industry stakeholders was a clause in Sri Lanka’s new draft Tourism Act which has proposed to grant impunity to state officials for any act carried out in “good faith”.
Industry officials said some might use this as cover to resort to acts that might not be carried out in “good faith”.
As I walked into the kitchen to get my second mug of tea, I could hear the trio still discussing tourism trends, realising that the hopes of many people – dependent on tourism – lie on a quick recovery of this key economic sector.
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