Tourism in Sri Lanka: One step forward, two steps back | Business and Economy News

Colombo, Sri Lanka – Tourism in Sri Lanka can’t seem to catch up with the respite.

Three years ago, tourist numbers dropped 18% following the Easter Sunday bombings in April 2019. The coronavirus pandemic that followed in 2020 was particularly bad. Tourist arrivals plummeted and showed no signs of recovering until November 2021, when the government lifted all quarantine requirements for fully vaccinated travelers, encouraging those vacation to this island nation.

It’s a welcome change as tourism is the country’s third-largest source of foreign exchange – after worker remittances and the apparel industry – a major employer and an important source of dollars. help the government run the country.

But now as Sri Lanka grapples with the worst financial crisis the country has ever faced, daily power cuts and people are forced to queue for kilometers to buy fuel and cooking gas. Inflation is 17.5 percent in February and the government has tighten its restrictions on imports, exacerbating shortages. All of this once again keeps tourists away – at a time when The government is struggling to find a way to repay a large amount of foreign loans and needs those tourist dollars.

“We need to find a solution for these people as soon as possible,” said President Gotabaya Rajapaksa speak in his national address on Sri Lanka’s independence day in early February. “Therefore, while strictly following health recommendations, we have taken action to restart the tourism industry in phases.”

Worse economic conditions

“Business has been very good for a few months,” said Kate Hopkinson, an expat who owns a restaurant and a breakfast restaurant in Weligama, a popular seaside town in the south of the country. via. However, the current economic conditions are making it extremely difficult for her to maintain her business.

“Because we ran out of gas, we had to buy it on the black market, food prices skyrocketed, [and] Flour and imported goods are becoming more and more difficult to source. We run an Italian restaurant and we need cheese, but that supply is in short supply due to import restrictions and local alternatives are becoming more expensive due to dairy shortages,” said Hopkinson. speak.

A boy holds empty barrels as he and family members buy kerosene for a kerosene stove amid a domestic gas shortage in Sri Lanka
Sri Lanka is facing a serious gas shortage [File: Dinuka Liyanawatte/Reuters]

Hopkinson is not the only one suffering. Restaurant owner Rasika Lakmal and lifestyle and tourism ambassador Paloma Monnappa run tourism businesses in the popular seaside towns of Galle and Unawatuna.

“We are facing power cuts that last four to seven hours daily. Fishermen were forced to cut back on fishing due to lack of fuel, [and] Monnappa said.

“Every time you think of a possible solution, you face a new problem or obstacle. You buy a generator but don’t have the diesel to run it. We desperately need tourists, but how do we serve them? My Sri Lankan friends told me the economy wasn’t this bad even during the war,” she said.

While some restaurants are buying gas from other cities like Colombo and Matara, Lakmal says that’s not an option for him. “If we did, the price would be around 10,000 Sri Lankan rupees ($35), more than double the normal price. We can’t afford that,” he said.

People queuing to refill gas cylinders in Galle, Sri Lanka
Locals buy gasoline on the black market or from other cities, when available [Courtesy: Paloma Monnappa]

The spillover from the Russo-Ukrainian war

Sri Lanka’s top tourist source markets are typically India, China, the UK and Germany, but since the tourism industry reopened, many visitors have come from the Eastern bloc, with Russia and Ukraine brought in 25% of visitors from January to mid-February, thanks in part to aggressive marketing by tourism authorities targeting those regions.

However, Western sanctions against Russia such as the ban on the international payment system SWIFT have now also spilled over into Sri Lanka. Dimitra Fernando, the manager of a chain of villas for tourists, told Al Jazeera: “The requests from Ukraine and Russian citizens have completely stopped. “We had Russian guests who were already in the country, but they canceled all their bookings with us because they didn’t have the money to pay. They cannot use their card and cannot withdraw money either. “

But the main issue continues to be the economic situation of Sri Lanka. For example, the UK government has updated its travel advice for Sri Lanka and warned travelers about power shortages and blackouts. “Questions from UK and the Middle East market has slowed down a lot after the travel advisories,” said Fernando. “We manage eight villas, but we haven’t had a single booking since.”

Nuwan Amarasuriya, who works for a travel agency that receives most of its business from UK tourists, told Al Jazeera that the company’s customers are “very concerned” about shortages. ongoing fuel and other essentials, “so we are in regular contact with them to reassure them”.

Authorities have assured that tourist vehicles will be given priority in refueling lines, but this has caused anger among locals, who have been forced to queue for hours. A heated argument broke out in a town in Colombo this week when police officers tried to allow a tour coach to pump fuel ahead of others.

Lack of labor

Besides the immediate problems, the industry also has to deal with the shortage of labor.

While growing tourism is important to the Sri Lankan economy, the country has been grappling with labor shortages since long before COVID-19. In 2018, Malik Fernando, head of the industry body, the Tourism Skills Commission, told a range of tourism stakeholders that the country needed 100,000 more tourism industry employees within the next three years. “However, we only train about 10,000 people a year,” he said.

Lakmal has been struggling to find staff for his restaurant in Unawatuna, most of whom have “switched over” to other industries and occupations after the past few bad years. “They don’t want to work in the tourism industry anymore,” he said.

With the ongoing economic crisis, skills shortages could be exacerbated as many tourism workers are looking to move abroad or are not interested in returning to an uncertain industry. .

“The problem with the Sri Lankan tourism industry is the salary structure,” said Ahamed Nizar, a travel consultant. “There is a low base pay based on service fees and tips, but that depends on the performance of the property. So obviously there haven’t been any tourists, workers have earned almost nothing in the last few years and it’s very difficult to survive.”

Nizar said he has seen many skilled tourism workers migrate while unskilled workers have found alternatives with stable wages. One of his customers is no longer providing dinner service because of staff shortages, while another is working with a boneless employee, he said.

The bumpy road ahead

While COVID-19 appears in the rearview mirror within Sri Lanka, the worsening economic situation has cast a heavy shadow on tourism. The government’s attempt to maintain the meager foreign exchange reserves it has with measures such as restrictions on imports of food items has had a severe impact on the availability of essential commodities.

“Some restaurants had to close for days because they ran out of gas; Some have had to remove or reduce menu items due to import bans and soaring prices of local food items. The power cut is very difficult to explain to tourists. They empathize with our plight, but no one wants to come on vacation and sit in the dark and the heat,” sighed Nizar.

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