Sri Lanka Tourism Development Authority Chairperson Kimarli Fernando
Sri Lanka’s tourism sector witnessed a major setback being hit by the double whammy of the Easter Sunday attacks and coronavirus (COVID-19) pandemic, both within a year.
The hit left hardly any room for the sector players to come up for air. However, having survived through the 30-year civil war in the country, the tourism industry is confident it will brave through the storm once again.
For a revival to take place, an effort that would uplift all those dependent on the sector for their livelihoods, support from the government is essential, according to Sri Lanka Tourism Development Authority (SLTDA) Chairperson Kimarli Fernando.
In a discussion with Mirror Business, Fernando noted that in the current global climate, the entire tourism industry has come to a standstill with all stakeholders severely affected.
Acknowledging the wider socio-economic impacts of this pandemic, leaving livelihoods at risk and mass unemployment, she shared that the authority is working towards realigning the industry to make space for itself in the new normal. A multi-fold plan is being conceptualised to strengthen the position of Sri Lanka Tourism to achieve this.
A vital economic sector for Sri Lanka, tourism accounts for more than 5 percent of gross domestic product (GDP) and provides direct and indirect employment opportunities for about 170,000 and 220,000 persons.
Recognised as the second highest net foreign income earning industry to the country, a status it boasted prior to the setback, the government identifies that developing tourism as an environmental and domestic culture-friendly industry, with extensive people’s participation, as a key priority.
While the tourism sector contributes to the government revenue through the Tourism Development Levy (TDL) and other relevant licensing fees, the Sri Lanka Tourism Promotions Bureau (SLTPB) has contributed approximately Rs.4.5 billion to the Treasury, in the last five years.
Placing people first
The sector has always acknowledged that what make the industry are those who serve it. However, due to stringent regulations and red tape, the number of entities and individuals registered with the SLTDA is not as significant as it should be.
Fernando pointed out that registered under the SLTDA are only 2500 businesses and a staggering 22,500 businesses continue to operate in the informal space.
Not being registered places such businesses in a disadvantaged position, as they will not have access to any relief or support measures extended by the government, she said.
The COVID-19 pandemic is an eye-opening experience for them to get on board as the STLDA was unable to provide any assistance to the businesses not registered with it, Fernando added.
“It is these smaller players who help in creating the experience for tourists at most instances and it is they who were also the most hit. With the pandemic, their means of income simply perished. It is rather unfortunate that we couldn’t help them either, since the relief measures are only for those registered,” said Fernando.
To simplify the process and to allow the informal sector players to get on board, Fernando said the SLTDA is in the process of issuing provisional licences, which allow such businesses to have accesses to the much-required support for the day-to-day survival.
Relief measures extended for survival
In an effort to support the sector players in this period of stagnancy, the SLTDA, in coordination with the Tourism Ministry, proposed a series of measures required, for which the Cabinet approval was granted. The relief received were as follows.
Employees’ wage support scheme – Loans at 4 percent interest rate, within the already approved Central Bank of Sri Lanka (CBSL) Circular 4 and 5, were received to pay the salaries of the hotel (accommodation) sector and DMCs/travel agents’ staff registered with the SLTDA, as at March 2019. This was computed at a rate of Rs.20,000 per person per month, over a period of six months, with no collateral, based purely on the EPF records through Bank of Ceylon. The loan is to be payable within a period of five years, with a two-year grace period.
Also extended was a loan package to pay the salaries of the employees of other establishments registered under the SLTDA, including restaurants, tourist-friendly eating places, spa and wellness centres, spice gardens, tourist shops and water sports centres. This was extended at a rate of Rs.15,000 per person, per month, over a period of six months.
A one-off payment of Rs.20,000 per person was given to tour guides registered with the SLTDA, to be dispersed by the authority itself.
Similarly, a one-off payment of Rs.15,000 per person to tourist drivers registered with the SLTDA was also given, which again is to be disbursed by the SLTDA.
The total estimated cost of the relief programme, for wage support alone, amounts to about Rs.16.42 billion, for which a portion was covered by the World Bank fund of US $ 65 million that was proposed for the Social Safety Nets Project (SSNP).
Payment relief for utility bills – Approval was granted to settle the cumulative electricity and water bills from March 1 to August 31, 2020, in 12 equal instalments, with effect from September 1, 2020, for the registered accommodation entities at the SLTDA, as at March 2019. The Ceylon Electricity Board (CEB) and National Water Supply and Drainage Board (NWSDB) are requested not to disconnect supply until such time.
Grace period for vehicle lease – The current six-month grace period given for all tourism-related vehicle leases was increased to 12 months. The vehicles currently on lease have been given a six-month grace period under the CBSL Circular 4 and 5 and it is requested to be extended for 12 months, without considering the existing lease agreement and without default charges during the grace period, considering the anticipated delay of the tourism industry returning to normalcy.
Settling into new normal
The path towards recovery requires the industry to adapt to the new condition, Fernando acknowledged. To make the best use of the time from the closure of the international borders to tourists, until it is safe to open, she said that plans are already being rolled out to uplift the sector, making it formalised and structured.
For that, a series of measures are being taken, starting from certifying every single service provider, which is made mandatory, if the entities wish to operate.
Certification – All service providers, accommodation, restaurants, tourist sites and tour operators, amongst others, are required to be certified by the Health Ministry, affirming they have complied with the guidelines that have been put in place to ensure all the necessary measures have been taken to prevent the possibility of a COVID-19 spread.
Fernando stressed that only those registered with the SLTDA will be able to opt for the COVID-19 certification. The current process allows those holding provisional licences to be certified as well.
The fee for the COVID-19 certification, renewable annually, will initially be absorbed by the SLTDA. However, if they fail to comply in the initial screening, the reapplication will be charged for.
Fernando shared that to ensure all protocols are followed, an independent audit firm has been selected to assist with the certification process that would be carried out by the Health Ministry.
Change of visitation timings of tourist sites – While all tourist sites will be require to be COVID-19-certified, Fernando shared that discussions are currently underway to explore the possibility of having separate opening times for tourists and locals. The rationale behind the decision that is yet to be finalised is to prevent any possible community spread.
Creation of an all-inclusive travel app – Fernando shared that currently in the works is the creation of an all-inclusive travel app. The Version Zero of the app is being developed with funding from the UN.
“We have looked at all the top travel apps in the word and features of such are being incorporated into the SL Tourism app. It is a one-stop shop,” she said.
Fernando added that the app would be upgraded to allow tourists to have all the necessary information required to get around the island. In-app purchase would also be incorporated into the upgraded version, allowing tourists to have their experiences paid for even before they arrive.
Fernando shared that inter-ministerial cooperation is key to create a viable travel app.
Setting up SLTDA branches islandwide – To allow smoother roll out of services to tourists and the service providers of the sector, Fernando shared that plans are afoot to have centres in each province.
“In the past, the provinces worked separately but now we are looking at an ‘all of country’ approach for tourism. For this, we are working closely with the provinces and the relevant authorities. So far, the support extended for the initiative is commendable,” Fernando said.
The SLTDA is on the lookout for suitable locations across the country for the setting up of the branches and local authorities of three provinces have already provided the sites to establish the same.
Work on setting up the branches will commence soon after the upcoming parliamentary elections are held. Fernando explained that the establishment of the branches cannot take place before the red circled event, as transfer of staff cannot be facilitated.
Fernando shared that the setting up of centres across the country is to fulfil three key objectives.
The first is to serve as a centre of assistance for any tourist; the second is to facilitate infrastructure improvement in the province, making sites more tourist-friendly and the third is to support the businesses engaged in tourism activities.
Conversion of informal sector to formal – Fernando shared that the current focus is to pave the way for the informal sector to register with the authority and the establishment of the islandwide branches will allow the conversion to take place with minimum hassle. The branches will facilitate registrations and renewals.
“Right now those in the informal sector have to come to the SLTDA to register and they probably find the process inconvenient, thus refrain from registering. We want to make it easier, so the setting up of branches is one for the efforts to allow the transition,” she said.
Going forward, with all accommodations, restaurants and entities engaged in serving tourists required to be COVID-19-certified by the Health Ministry, the certification would require the businesses to be registered with the SLTDA.
Establishment of satellite accounts
Sri Lanka will also see the establishment of Tourism Satellite Accounts (TSA) that would help in capturing the relevant tour and spending patterns of tourists. The TSA is a standard statistical framework and the main tool for the economic measurement of tourism.
It has been developed by the World Tourism Organisation (UNWTO), Organisation for Economic Cooperation and Development (OECD), Statistical Office of European Communities (Eurostat) and United Nations Statistics Division.
The establishment of the TSA, which is slated to be launched by end-2020 or early 2021, will allow to capture pertinent data such as in bound, domestic tourism and outbound tourism expenditure, internal tourism expenditure, production accounts of tourism industries, gross value added (GVA) and GDP attributable to tourism, employment, investment, government consumption and non-monetary indicators.
Speaking on the relevance of the TSAs, Fernando said at present it is challenging to make informed decisions on tourism development-related matters, as no data is captured on tourism.
“What we have is only those by the airport authorities. That doesn’t tell us anything besides the number of those coming in. We don’t get any data. If we don’t have it, we cannot make decisions. The TSA and dashboard for the source markets will certainly allow us to add value and uplift the way in which we offer our services and experiences to tourists,” Fernando said.
Central planning for investment – According to Fernando, despite the setback, foreign investors have expressed their keenness in investing in the tourism sector in the country. In an effort to streamline the investment process, the Board of Investment (BOI), Urban Development Authority (UDA) and SLTDA have been integrated. Currently underway is moving the new consolidated framework onto the digital platform.
“This is essential since structures are made, which are not sympathetic to the environment. Sometime the BOI has the authority to make a huge structure but according to the SLTDA regulations, it cannot be done.
The agencies will work closely together to ensure that there is a central planning. There are issues in the existing projects but in untouched areas, we can look at working together,” said Fernando.