Hotels in crisis, loan repayment deadline nears
Sri Lankan hotels are facing a critical stage as time is running out on the June 30 deadline for moratoriums. If an extension is not granted they will face an imminent collapse with layoffs and complete shutdown of the industry.
The hotel industry has been meeting Prime Minister Ranil Wickremesinghe on several occasions with the latest being on Thursday and even with the banks and the Central Bank in a bid to ensure that an extension of their moratoriums will be granted for another six months as the industry is at a critical stage, currently operating less than 10 per cent of hotel occupancy.
Hotels Association President M. Shanthikumar said the government has already approved a Cabinet paper submitted on June 7 seeking an extension of the present moratorium on loan repayment up to December 31.
However, he noted that no direction has been issued yet to extend the moratorium or implement the decision taken by the Cabinet. Bookings are said to be coming in since the relaxation of the travel advisories lately, which the industry believes is a positive sign.City Hotels Association President Rohan Kaar explained that today only around 200 tourists arrive daily and in this context the industry simply cannot pay wages if they are burdened with the loan repayment.
“But we are confident with the authorities that there will be some sort of an arrangement but it is not clear yet,” he said.
Sri Lankan hotels will have to go for a complete shutdown if the moratorium on their loans are not extended by a further six months, Hotels Association Past President Anura Lokuhetty told the Business Times.
He noted that with three million livelihoods depending on their survival from the hotel industry, 600,000 jobs of direct and indirect work force is at stake. Moratoriums top approximately Rs.475 billion that is about 6 per cent of the total loan repayments to the banks from a sector that generates one of the highest revenue.
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