Tourism industry wants loan restructuring solutions
Tourism authorities met the International Monetary Fund (IMF) last week where they raised concerns that act as hurdles for the industry’s progress like a permanent solution to restructuring loans obtained by the sector.
Sri Lanka Tourism Development Authority (SLTDA) Chairman Priantha Fernando told the Business Times that during their meeting with the IMF officials the previous week they had reiterated concerns regarding the imposition of the 18 per cent VAT component on a sector that had not been charged in the past. The meeting was held at the Tourism Ministry chaired by the Ministry Secretary H.M.B.P. Herath.
In this respect, it was pointed out that they hoped the IMF could consider waiving off this levy at least for a limited period.
Moreover, it was explained that if the industry was to target high end travellers to the destination then they needed to upgrade the product offerings as well as expectations of tourists need to be met.
This would mean the hotels would need to carry out renovations, refurbishments; and though banks are prepared to provide loans they need a permanent solution for the restructuring of the existing loans.
Sri Lanka is losing out on Foreign Direct Investments (FDIs) as well as there is no proper climate for investments compared to others in the region like Cambodia With the country’s tourism industry on the road to recovery, Mr. Fernando noted that they need to increase their room capacity as they are likely to run short of it by 2025 if arrivals keep increasing at the current pace.
It was highlighted at the meeting that the sector was capable of contributing over US$4 billion to the economy and this number is likely to exceed $5 billion in 2025.
With the dollar depreciating against the rupee operational costs have been increasing and it is imperative that the stakeholders be taken care of in order to ensure smooth progress in the sector.
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