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Sanctions bite Lanka’s tourism sector: Need for proper payment mode for Russian tourists stressed
View(s):- Russia tops arrival figures, but its tourists can’t pay for services with Mir cards here
- Some resort to providing transport and accommodation services to other tourists to cover expenses
By Wasantha Ramanayake
With Western economic sanctions preventing Russian tourists from using Mir payment cards, Sri Lanka’s tourism industry stakeholders are calling for the adoption of a proper payment mode for Russian tourists, some of whom are resorting to unwelcome practices to meet their expenses here.
The Russian embassy said several modes of payment were under consideration to help Russian tourists whose arrivals have swelled in recent months.
Addressing the media at the Unawatuna beach on Wednesday, Unawatuna Hoteliers’ Association President Sumith Ubesiri said this was a serious situation overlooked by the regulators.
He said that around 90 percent of tourists currently patronising hotels in Unawatuna were Russians and Ukrainians. However, to meet their expenses most of them were unlawfully and secretly providing tourism-related services such as transport and accommodation to foreigners. “As a result, even local tuk-tuk drivers are deprived of their earnings,” he said.
Russian Speaking National Guide Association (RUSSO) President Tissa Hettiarachchige said this was because Russian tourists could use neither the Ruble, their local currency, nor the Mir card to make payments in Sri Lanka.
These Russian tourists here contact Russian tourists who want to visit the country and make arrangements to provide services such as transport, food and lodging. As payment for these services, these visiting tourists are asked to credit rubles into certain bank accounts back at their home countries, explained Mr. Hettiarachchige.
After western nations imposed sanctions on Russia following Moscow’s annexation of Crimea in 2014, Visa Inc., MasterCard Inc., and other western financial institutions suspended operations in Russia. To circumvent the issue, Russia introduced the Mir card system supported by its Central Bank in 2017.
Only a few countries accept the MIR card.
“If Russian tourists are allowed to use the MIR card in Sri Lanka, these malpractices could be easily curbed,” Mr. Hettiarachchige argued.
“I took a group of Russians to a restaurant in the Dutch Hospital in the Colombo Fort. They could not settle their bills with their cards or online payments. They had to scrape together enough dollars with great difficulty to pay the bills,” the RUSSO president said.
In October, the Central Bank announced that it could not, for the time being, allow Russia’s MIR cards because of the US sanctions.
This prompted the People’s Bank to introduce an alternate payment system for visiting Russian tourists. “This system according to some in the industry is in the initial stage,” said Mr. Hettiarachchige.
The People’s Bank, however, said the new remittance mechanism efficiently and conveniently transferred funds from Russia to accounts in Sri Lanka.
The bank said it had entered into an agreement with the National Investment Industrial Bank in Russia to facilitate the mechanism.
According to this arrangement, Russian tourists will be able to remit funds directly to an account at the People’s Bank in Sri Lanka prior to their visits, through the Bank in Russia. Upon arrival in Sri Lanka, tourists will be issued debit cards which can be used to make payments from the remitted funds.
The Chinese UnionPay card is another option used by Russian tourists, but this has limited acceptance. “Only about 20 percent of outlets accept the UnionPay card. This is a downside,” said
Mr. Hettiarachchige.
“We have scheduled a meeting with Tourism Minister Harin Fernando to discuss this payment issue,” he added.
However, the Russian Embassy refutes claims that Russian tourists find it difficult to pay for goods and services.
“Russian tourists are not suffering from disability to pay for the services during their stay in Sri Lanka,” the embassy’s media secretary said in response to a Sunday Times query.
There is no formal mode of payment that Russian tourists could use to pay for their services, he said.
“There are different modes under consideration, but all of them – without using US dollars,” the press secretary said.
Sri Lanka Tourism Development Authority (SLTDA) statistics show Russian tourists topped the tourist arrivals into the country, pushing India, which for long held the number one position into second place.
The first week of December reported the arrival of some 16,169 tourists. Of them, 3,404 tourists were from Russia — a low figure compared to Russian tourist arrivals to other Asian countries. Some 2,856 tourists arrived from India followed by tourists from the United Kingdom and Australia. Up to December 07, the country has welcomed 644,186 tourists for this year.
The Russian National carrier Aeroflot is operating thrice weekly flights to Colombo from Moscow, bringing the bulk of the Russian tourists to Sri Lanka. After suspending services in June this year due to a dispute over a court case, Aeroflot resumed flights to Colombo on October 9, initially operating twice a week.
Aeroflot also resumed daily flights to Bangkok from October 30.
Thailand is most Russians preferred destination in Asia, according to OneTwotrip travel planning service, followed by Indonesia, Vietnam, the Philippines, and the Maldives.
Sri Lanka’s economic crunch prevented tourists from making early bookings, and this resulted in low tourist arrival for the winter season.
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