23 March 2021 09:28 am
The Hotels Association of Sri Lanka (THASL) yesterday stressed that the moratorium alone is insufficient to tackle the ongoing crisis faced by the tourism sector and measures should be taken to extend an “innovative” stimulus package.
According to THASL President Sanath Ukwatte, the industry is looking at innovative stimulus packages to restructure debt to avoid financial system instability.
“To support the industry’s position, THASL has recommended the government to implement innovative structural measures to help restructure the ballooning tourism-related debt.
THASL is asking for the government and Central Bank to step in and help restructure tourism debt, in order to avoid the cascading defaults and financial sector instability,” said Ukwatte. He shared that the local banks hold over Rs.350 billion of tourism debt.
To further smoothen the sail through the crisis, Ukwatte said THASL has proposed an interest waiver and debt-restructuring programme.
The proposal calls for all tourism-related debt interest from April 2019 to be waived and for the remaining debt to be rescheduled at a
concessionary interest.
“Any bank losses arising from the interest waivers can be appropriately compensated through reductions in banking taxes or government rebates,” he said. THASL chief pointed out that without a stimulus, such as the proposed, “it is very difficult to sustain the hotels and maintain the livelihoods of the employees”.
“Besides, we needed to invest more to maintain and refresh our hotels during the crisis. Both the Easter Sunday attacks and the pandemic have struck the industry incredibly hard and brought it to a virtual standstill,” he added.