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Tourism sector warns of collapse
Continuing shortages of fuel, cooking gas, regular power cuts, and import restrictions on housekeeping and kitchenware will lead to the collapse of the tourism industry, stakeholders warn.
Hotel Suppliers Association president Azad Manzoor warned that the introduction of licences last month by the Finance Ministry for imports of kitchen and housekeeping equipment and items such as bed linen, as well as kitchen utensils, crockery and cutlery would impede the operations of hotels, restaurants, and bars.
Tourists in Sigiriya: The economic crisis is heavily impacting tourism
“More than half of the hotels need to import new items after the pandemic. Unfortunately, hotels are forced to use old items because of the inefficient licencing system,” he charged.
Hotels will lose out to neighbours such as the Maldives, and even Thailand and Vietnam.
“Our membership was asked to apply for licences with the Finance Ministry. There, we were asked to put our applications in a box. Although many weeks have passed, we do not know what happened to our applications.
“There is nobody to inquire about those applications in the ministry. The usual answer we get every time we make inquiries is that the applications are ‘being processed.’ We are left high and dry, and hotels and restaurants are suffering indefinitely because of irresponsible actions of the people concerned. The development of tourism is not merely [about] bringing in more tourists, but also improving the infrastructure as well,” he emphasised.
A new city hotel in a prime location in Colombo managed by an international chain that was scheduled to open last June, has yet to do so as necessary items could not be imported, said Mr. Manzoor. He said an application for a licence for a client, a star class hotel, to import equipment worth US$30 million (Rs 9.66 billion) had been pending approval by the Finance Ministry for more than three weeks.
None of the 45 members was consulted before issuing gazette notices by the Finance Ministry, claimed Mr. Manzoor.
Kandy Hoteliers Association President Rodney Armstrong is concerned about possible shortages of imported food and beverages.
“We are already short of various flours, whipping cream, baked beans, and meat. These are not locally produced, but remain essential ingredients in meals.”
Tourists need international food, regardless of how much they enjoy Sri Lankan food, he pointed out.
“The quality and taste of food is vital for any hotel for its survival,” he asserted.
“We have some stocks, which will run out soon,” he cautioned.
Although the Sri Lanka Tourism Development Authority has issued fuel priority cards for tourist coaches and hotels to buy diesel from Sri Lanka Transport Board depots, diesel is not available most of the time, he complained.
The economic crisis is heavily impacting tourism. 
At Hotel Insight, a four-star property in Ahangama in the south, cancellations in March were 22% due to the economic crisis and the war in Ukraine, said resident manager Niroshan Jayakody.
Hotel occupancy forecast for the off-peak months of May and June was more than 50%, which is well above average for that period. But, the war in Ukraine and the economic crisis dragged down room occupancy. Unusually high occupancy had been forecast due to travel limitations during the pandemic.
“Most tourists who had booked rooms online, cancelled after March 15,” Mr Jayakody said. Many of them are surfers who would stay for one or two months. “These cancellations and a drop in online bookings certainly hurt our income.”
The room occupancy rate at the beginning of March was around 85% and with cancellations it had fallen to 63%, he lamented.
The online booking rate, which was an average of six a day, dropped to zero. “More often than not, there are days without a single booking,” he disclosed.
The hotel found it extremely difficult to find diesel to run generators during daily power cuts. Requests to authorities to ensure cooking gas supply fell on deaf ears.
“Earlier, cooking gas cylinders were home delivered on credit by the company, but now we go to the regional depot to buy them with cash, even that with great difficulty because of the shortage.’’
A small hotel operator in Ella also reported cancellations.
“We had cancellations of three foreign tourist groups during March and that was devastating for a small hotel like ours,” said Mr Sunil who manages a small tourist hotel in Ella, a popular destination in the central hills. “Only two groups showed up in March as tourism was picking up after the pandemic. We had to struggle to find cooking gas and diesel to run generators during power cuts.”
He said that many hotels did not have water and air conditioning as the hotels ran out of diesel.
Chauffer Tourist Guide Lecturers Association President Hirantha Perera was critical of the shortages.
“The collapse of the industry is inevitable if the authorities do not address these basic issues,” he warned.
He said there had been many instances when vehicles transporting tourists had run out of fuel.
Priority cards issued by SLTDA allowed for diesel purchases from SLTB depots. However, this facility has been stopped.
“I have written to the Tourism Ministry Secretary regarding this issue on April 3, but I am still waiting for a positive response,” Mr. Perera said.
SLTDA Director General Dhammika Wijesinghe said that import restrictions on some of the items could be lifted by next winter.
She said the SLTDA made representations to the Controller of Export and Import Department. “This is out of our control,” she maintained.
She suggested that import licence delays be put to a special committee considering the depletion of foreign reserves. “But, some of these restrictions would be lifted by the third-quarter of this year,” she said.
The Finance Minister on March 9 issued a gazette restricting imports of 367 items, including frozen fish and meat, kitchenware, glasses, dairy products, fruit, cereal, beer, wines, spirits, tobacco, perfumes, shampoo, soap, candles, stoves, sanitary ware, and air-conditioners.
These were categorised as “non-essential,” in the hope of preserving what was left of the foreign reserves. Importers were asked to apply for import licences from the Finance Ministry.
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