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.”
CBSL foresees brighter growth prospects in 2021
By Hiran H.Senewiratne
Sri Lanka’s 2021 GDP growth prospects seem positive despite the economy contracting by 1.7 per cent and 16.3 per cent in the first and second quarters of 2020. However, the economy rebounded in the third quarter of 2020 and registered a growth of 1.5 per cent, Central Bank Governor Prof. W. D.Lakshman said.
“However, the second wave of COVID-19 is expected to have dampened the momentum in the fourth quarter of 2020. Accordingly, the economy is expected to have contracted by around 3.9 per cent in 2020, Central Bank Governor said while releasing the CBSL monetary policy review yesterday.
“Nevertheless, the economy is well poised to rebound in 2021, supported by the unprecedented policy stimulus measures introduced by the government and the Central Bank, improved domestic economic sentiments, alongside the improving prospects of the global economy, Lakshman told the media online.
He said the Monetary Board has decided to continue with its accommodative monetary policy stance.
Headline inflation is projected to remain subdued in the near term and improvements in domestic supply conditions are expected to ease price pressures on a sustained basis.
The Central Bank Governor also said the CBSL will continue to monitor domestic and global macroeconomic and financial market developments and take further measures appropriately to ensure that the economy promptly reverts to its true potential of a high growth trajectory, while maintaining inflation in the targeted 4-6 per cent range under its flexible inflation targeting framework.
Accordingly, the Monetary Board of the Central Bank of Sri Lanka, at its meeting held on January 18, decided to maintain the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank at their current levels of 4.50 percent and 5.50 percent, respectively.
The Board arrived at this decision after carefully considering the macroeconomic conditions and expected developments on the domestic and global fronts, Governor Lakshman said.
“The Board, having noted the reduction in overall market lending rates during 2020, stressed the need for a continued downward adjustment in lending rates to boost economic growth in the absence of demand driven inflationary pressures, particularly considering the significant levels of excess liquidity prevailing in the domestic money market, Lakshman explained.
As announced in November 2020, the Board decided to introduce priority sector lending targets for the micro, small and medium scale enterprises (MSME) sector to support a broad-based economic revival, in consultation with the banking community.
‘Sri Lanka’s gross domestic product is projected to grow 6.0 percent in 2021, recovering from a 3.9 percent slump in 2020, Central Bank’s Director of Economic Research Chandranath Amarasekara said.
‘We now expect the economy to record a growth of 6 percent, Amarasekara told the media.
COVID-19 – elderly in isolation; how to manage their care?
The COVID-19 pandemic which appeared in 2020, has resulted in a drastic change to our lifestyles. From lockdowns and quarantines, the practice of social distancing and stringent travel restrictions instigate feelings of isolation and loneliness, especially among the elderly who sometimes live alone, with loved ones living far away.
The current pandemic elevates the need for proper and appropriate care for the elderly. Those aged 60 and above, with underlying medical conditions, are at higher risk for severe illness if contracted with COVID-19. Living alone during this time can be difficult for elders, as there are many variables that need to be looked after from; medication and physiotherapy to name a few. Additionally, the need for minimal interaction as a safety measure can result your elderly in feeling frustrated or depressed. This is a time when your elderly loved one requires someone to care for them and ensure their physical and mental well-being.
Founder and Managing Director of expert Home Nursing Service, English Nursing Sri Lanka, Richard Gould said, “Creating a reliable, high quality professional service, which takes care of your elderly loved one responsibly, with compassion and utmost dignity is vital. As our healthcare professionals are at the front line of battling the virus, we as a reliable home nursing care take it as our responsibility to step up and deliver for those unable to take care of their elders due to this global pandemic.”
How to manage their care?
English Nursing Sri Lanka; a home nursing and elderly care solutions provider, offers services to give your elderly parents or loved ones care and compassion in the comfort of their own home. Their services include; high quality Generic Home Nursing Services, Managed Maid Services and a Care Companion Service.
The Generic home nursing is the more popular option, where a well-trained, certified nurse conducts a thorough study on the house environment to understand all resources required for the best care routine. Encompassing these details, a unique customized plan is curated and executed, making the most of your investment towards caring for your senior loved ones.
Recently, English Nursing also introduced its ‘Managed Maid Service’, the first of its kind in the country which allows people to up-skill their existing housemaids to provide proper eldercare, alongside certified tried and true techniques when it comes to looking after ailing seniors at home. The service is much more affordable for customers in the long run and is a great option if you trust your existing help and would prefer him/her to continue helping around at home.
For people looking for more affordable short-term care or for a simpler more companion based service for their parents or other senior citizens, English Nursing Sri Lanka offers its ‘Care Companion’ service. It opens the doors for people to access various eldercare services on demand for relatively healthier seniors that don’t require full-time care and attention.
Rising startups keen to tap stock market for external funding
Board members of The Startup Council-Standing (L to R) Chandula Abeywickrama(Founder & Chairman – Lanka Impact-Investment Network). Achala Samaradivakara (Co-Founder & Managing Director – Good Market) Imal Kulathotage (CEO – nCinga) ,Yasura Samarakoon (Manager – Business and Trade Promotion, The Ceylon Chamber of Commerce).Seated (L – R) Prajeeth Balasubramaniam (Managing Partner -BoV Capital- chairman- Startup Council). Shalin Balasuriya, (Co-founder -Spa Ceylon), Brindha Selvadurai-Gnanam (Co Founder –Hatch),Mangala Karunaratne -(Founder & CEO – Calcey Technologies)
by Sanath Nanayakkare
Rising startups in Sri Lanka are keen to tap the stock market for external funding for product development, product launches and scale up and expand their their businesses in new markets, The Island Financial Review learned at a forum held by the Council For Startups, established by the The Ceylon Chamber of Commerce.
The Council provides entrepreneurs with exclusive opportunities and access to international markets
Prajeeth Balasubramaniam Founder, Lankan Angel Network/Managing Partner, BoV Capital who is also the chairman of the Council speaking to The Island Financial Review said,” Today people who have money pour that into the stock market because interest rates have come down. People who used to make higher interest rates are not making that and they are putting that into the stock market because they feel they can get better returns. Similarly if they can channel some of that money through the banking sector or other sources into startups it would be good. The CSE is regulated and the private sector is not going to put money into startups. If the government regulates startup projects and their funding structures then banks and private investors will feel that the risks are minimized and then they will join in to reap the rewards by investing in them”.
“Spring Singapore is a government startups initiative. Singapore state investor Temasek Holdings has put a lot of money into that. If we can create a similar situation people will be convinced that they won’t end up in trouble by investing in startups,” he said.
Imal Kalutotage, CEO of nCinga said,”nCinga was highly fortunate to expand regionally with the support the Ceylon Chamber and its global partners. Via the Chamber, its global partners and members, we were able to attract customers for accelerated growth and investors who also helped us with exit in December 2019. We now have a national body to help provide invaluable market access for startups and am happy to be a part of this to help other entrepreneurs grow”.
The Ceylon Chamber of Commerce recently established the Council for for Startups to address the key needs and challenges of SMEs and startups through allocation of a range of easily accessible opportunities, including access to local and international markets for various partnerships.
Inaugurated in September 2020, the Council for Startups primarily aims to foster a thriving ecosystem of entrepreneurship, which facilitates economic growth and empowerment of startups and SMEs in Sri Lanka.
Offering a highly influential and knowledgeable advantage, the CCC provides the cumulative support of 600 members to promote business opportunities for startups. These alliances (20 Global Chambers, 38Trade/Product and Service Associations and 21 Bilateral Business Councils) position the Chamber in an ideal position to promote business opportunities.
The Council recognizes the benefits of sustaining ripe economic conditions and marketing opportunities for startups and further aims to use its resources and partnerships with high commissions, foreign Chambers of Commerce for startups, and consulting firms in order to create a secure infrastructure that drives optimal business performance.
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