Business

Covid-hit hotel industry seeks urgent support from government

Published

5 years ago

2020/12/28

Sahan Weerasooriya

THASL Chief says support needed to prevent widespread devastation

Hotel industry alone employs approximately 250,000 staff

Seeks loan interest waiver for Rs. 350 bn debt till business rebounds to pre-pandemic level

Says banks are very understanding but they are reluctant to take a haircut

‘If govt reduces bank taxes by 2-3%, banks would be happy to accommodate our request’

‘There’s a lot of international donor funding available for hospitality industry’

‘None of the hotels have defaulted on any loans before’

‘Industry looks forward to 2021 with determination’

BY HARISCHANDRA GUNARATNA

As the hotel industry is forced to live with zero revenues with international travel becoming a long forgotten phenomenon in this Covid world, The Island Financial Review recently spoke with Sanath Ukwatte, President of The Hotels Association of Sri Lanka (THASL) to find out how the whole thing is weighing on his mind.

Following are excerpts from the interview we had with him.

“THASL is recognised for the incredible work it has done to support tourism in Sri Lanka. No other association or industry body of any industry has done so much under so much pressure. The fact that THASL has managed to obtain almost everything we have asked from the government to support the industry is remarkable. No other industry body has managed that”.

“At the moment the entire tourism industry has collectively taken loans amounting to Rs. 350 billion. 80% is from hotels big and small. It’s not as big compared to the assets. Total hotel assets are worth around $10b at present valuations. This fact was mentioned by Prime Minister Mahinda Rajapaksa during the Budget speech recently. None of the hotels have defaulted on any loans before. Moratorium is only a temporary solution as interest is accumulating during the moratorium period”.

“Since Easter attacks hotel debt is on moratorium. Pandemic came from no where. And again we are on moratorium. That’s why we are requesting the government for an interest waiver for 2 years or until international travel is restored and industry gets back to normal”.

“Banks are very understanding but they are reluctant to take a haircut. If the government reduces their taxes by 2-3% they would be happy to accommodate our request or else the government will have find another mechanism. There’s a lot of international donor funding available for hospitality industry as this is a global problem. 1 in 10 workers is employed by the travel industry, whether it be hotels, airlines, cruise lines, travel agents, theme parks, restaurants, retail etc”.

“As the worst affected industry due to COVID-19, governments world over have announced targeted relief for the hotel sector. Naturally THASL seeks government assistance to grant short-term and medium-term relief for the industry until the business bounces back”.

“We must also remember that our sector was completely crippled by the Easter Sunday attacks and as we were just about recovering from January this year onwards, industry came to a grinding halt in March as a result of this pandemic. Both these unfortunate events were out of our control. Now we are in a serious situation. Our priority is to maintain the livelihoods of 500,000 direct and indirect employees. Hotel industry alone employs approximately 250,000 staff who have undergone years of training. It’s a pity to lose staff who are committed and have made a career in the industry. In total there are 2 million dependents on tourism industry both indirectly and directly.

“In 2018, in addition to the salary, average service charge of a hotel employee was Rs: 25,000 per month. Now all that is lost. Hotels are struggling to pay monthly salaries to their permanent employees as company reserves has now depleted. Already nearly 20,000 have lost jobs. They were mainly trainees or who have worked for less than one year. Even the restrictions between inter provincial travel and 50 people limit for weddings and events have badly impacted on local business”.

“New Year’s Eve which is an important day for all hotels in the country in terms of revenue is all subdued now due to government’s call to restrict gatherings. The businesses are in danger. Cash flow has become a serious issue for hotels and jobs are at risk. That’s why we seek government support to restructure hotel debt with a two year interest waiver and a long term settlement plan for capital repayment”.

“Currently total hotel debt stands around Rs 350 billion. We have also requested the government to grant us the wage support scheme for the most vulnerable employees for which the Cabinet has already given the go-ahead. As a result of the 2nd wave of the virus UNWTO has revised the prospect for the international tourist travel for 2021 to a negative growth. Although we welcome the government’s decision to re-open the airport for tourists from January – a step in the right direction – it will take a minimum two years for the industry to rebound. Small and medium sized enterprises consist about 70% of the tourism industry. That’s why we call for financial and political support to enable critical recovery measures as speedily as possible.”

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Business

SL’s economic outlook for 2026 being shaped by M-E conflict

Published

13 hours ago

2026/04/11

Thilina Walpola

The top table at the ADB media briefing

Sri Lanka’s economic growth is expected to moderate to 4.0% in 2026 and climb to 4.2% in 2027, following two consecutive years of strong 5.0% growth.

This forecast is based on an early stabilization scenario for the Middle East conflict, according to the Asian Development Outlook (ADO) April 2026, Asian Development Bank’s (ADB) flagship economic publication. Sri Lanka’s recovery held firm in 2025 despite the late-year disruption of Cyclone Ditwah. Private consumption surged amid low inflation and easing interest rates, while remittances hit a record high, as did the primary budget surplus. The current account posted a third consecutive surplus, and official reserves climbed to their strongest level in years.

The outlook for 2026 is increasingly shaped by the conflict in the Middle East, even as post-Ditwah reconstruction spending provides some support for growth. Private consumption will remain the main growth driver, though higher inflation will temper household spending power, and private investment is expected to recover only gradually amid heightened uncertainty.

Higher energy costs, potentially weaker remittance inflows, and disruptions to trade and tourism will weigh on household incomes and external buffers and drag on economic growth. Inflation is projected to accelerate sharply to 5.2% in 2026, driven largely by the Middle East conflict.

“Sri Lanka has come a long way since the recent economic crisis, and its economic performance over the last two years is a major achievement,” said ADB Country Director for Sri Lanka Shannon Cowlin. “However, the risks ahead are real and significant. This is not the moment to ease up on reforms. Fiscal discipline must be maintained and resilience must be strengthened against the external shocks that will keep testing this economy. At the same time, scaling up and executing public investment will be essential to sustaining the recovery.”

ADB is a leading multilateral development bank supporting sustainable, inclusive, and resilient growth across Asia and the Pacific. Working with its members and partners to solve complex challenges together, ADB harnesses innovative financial tools and strategic partnerships to transform lives, build quality infrastructure, and safeguard our planet. Founded in 1966, ADB is owned by 69 members—50 from the region.(ADB)

Business

Hameedia unveils “Threads of Culture”

Published

13 hours ago

2026/04/11

Thilina Walpola

This Avurudu season, Hameedia introduces its latest campaign, “Threads of Culture,” celebrating the traditions that connect generations while embracing a more conscious and forward-thinking approach to fashion.

Rooted in the spirit of Sinhala and Hindu New Year, the campaign highlights the importance of preserving culture while evolving with modern values. This year, Hameedia places a strong emphasis on ethical and sustainable fashion, encouraging customers to move away from fast and imitation fashion towards quality, authenticity, and responsible choices.

As part of this shift, Hameedia presents a refreshed festive collection crafted using lightweight cotton and linen fabrics, designed specifically for Sri Lanka’s climate. The collection focuses on breathability, comfort, and timeless style, offering customers clothing that is both practical and refined for the season.

Commenting on the campaign, Fouzul Hameed, Managing Director of Hameedia, stated, “Avurudu is a time of renewal, reflection, and meaningful connection. With ‘Threads of Culture,’ we wanted to go beyond celebration and inspire a shift in mindset, encouraging Sri Lankans to choose authenticity over imitation, quality over quantity, and responsibility over convenience. As a homegrown brand, we take pride in upholding craftsmanship and ethical practices, and we believe fashion should not only look good but also do good.”

Marking a key milestone in its expansion, Hameedia is also set to open its newest outlet in Galle, further strengthening its presence across the island and making its signature craftsmanship more accessible to customers in the southern region.

Business

Colombo Shopping Festival 2026 declared open for 5 days of Avurudu Shopping

Published

13 hours ago

2026/04/11

Thilina Walpola

The much-anticipated 41st Edition of the Colombo Shopping Festival (CSF) – Avurudu Fair was ceremonially declared open at the BMICH Exhibition Centre, marking the beginning of five exciting days of festive shopping in celebration of the Sinhala and Tamil New Year.

The ceremonial opening commenced with the traditional lighting of the oil lamp on 8th April 2026, in the presence of guests, industry leaders, and invitees. Organized by Aitken Spence Conventions and Exhibitions, the event continues to reinforce its position as one of Sri Lanka’s premier consumer exhibitions.

Running from 8th to 12th April 2026, from 10:00 a.m. to 10:00 p.m. daily, the Colombo Shopping Festival brings together over 200+ Micro, Small, and Medium Enterprises (MSMEs) from across the island, offering a vibrant marketplace that supports local businesses while delivering exceptional value to shoppers.

This year’s Avurudu Fair promises an unmatched retail experience, featuring a wide range of products including fashion, lifestyle, homeware, beauty, and more. Visitors can shop top brands such as Boss, EL Holdings, Vantage, Miniso, Governor Shirts, Edge Casual, Avirate, Cetaphil, Phoenix, Rite Shu and many more top brands, alongside a diverse selection of Indian stalls offering exclusive collections at massive discounts.

The festival creates the perfect opportunity for families and shoppers to prepare for the New Year with unbeatable deals, festive offers, and a lively atmosphere filled with seasonal excitement.

With its strong legacy and continued commitment to empowering local entrepreneurs, the Colombo Shopping Festival stands as a key highlight in Sri Lanka’s event calendar—bringing together commerce, culture, and celebration under one roof.