Sri Lanka tourism industry begins to recover after attacks, election is next hurdle

Shangri-La Asia

09/08/2019 10:21

By Shihar Aneez and Ranga Sirilal
    COLOMBO, Aug 9 (Reuters) - Sri Lanka's tourism industry,
badly hurt by Easter day bombings, is showing signs of gradual
recovery, industry executives say, although a national election
later this year is likely to weigh on holiday season arrivals.
    The island nation's tourism sector, one of the country's top
revenue streams, suffered a massive blow following April 21
Islamist militant bombings of churches and luxury hotels, which
killed more than 250 people, including 42 foreign nationals.
    Tourist arrivals from Europe and Asia-Pacific, which
together account for 90% of the total visitors to Sri Lanka,
nearly halved in July from a year ago, according to the latest
data from the country's Tourism Development Authority.
    SriLankan Airlines, the country's lone carrier, will likely
post a loss of as much as $160 million in the financial year to
end-March 2020 as it lost business after the attacks, its chief
executive officer told Reuters.  urn:newsml:reuters.com:*:nL4N2533PY
    To be sure, Sri Lanka is trying to woo tourists back: it has
offered a raft of discount deals, scrapped the fee on tourist
visas for 48 nations, including China, India and the United
Kingdom, and simplified the visa process for visitors from those
countries.
    Those moves have started to pay off, hospitality executives
said.
    "(We are) almost 50% booked for the winter and see a pickup
in bookings," said Sanjeewani Yogarajah, an executive at
Hikkaduwa Beach Hotels in the southern coastal belt of
Hikkaduwa, 112 km (69 miles) from the capital Colombo and
popular for water sports.
    "This time also we hope we will get around 90% (bookings) by
winter," she added.
    Tourist footfall is gradually reviving, said the high-end
Taj Samudra and Shangri-La hotels in Colombo.
    While the Taj, operated by the Indian Hotels Company
 IHTL.NS , said it was hoping for a recovery as the winter
holiday season draws nearer, the Shangri-La hotel, which is part
of Shangri-La Asia  0069.HK , said the pace of winter bookings
was slower than previous years.
    The holiday season, from November through January, is the
busiest time of the year for Sri Lanka's tourism industry, which
accounts for nearly 5% of the country's GDP and was its
third-biggest source of foreign exchange in 2018.
    Even though arrivals to Sri Lanka have improved in the
months since the attack, tourist inflow in July was almost half
of what it was a year ago, hurting revenues and profits for
hotel chains and tour operators.
    Revenue from the sector in the first half of 2019 has fallen
13.4% to $1.89 billion, according to official data.
    Boosting it will likely be a challenge as an impending
presidential election, preceded by political campaigning, could
persuade tourists to steer clear of Sri Lanka.
    Given Sri Lanka's volatile ethnic and religious mix there
will be come concerns about communal violence. The politically
powerful Sinhala Buddhists make up about 70% of Sri Lanka's 21
million population, Hindu's constitute almost 13%, Muslims 10%,
while about 7% are Christians.
    The country was plagued by 26 years of civil war which ended
with defeat of the Tamil Tigers in 2009, allowing peace to
return to the island.
    "Of course, the election will have an impact on tourism,"
said Sanath Ukwatta, chairman of the Sri Lanka Hoteliers
Association. "We have to convince people to come here. There is
still fear psychosis among consumers that Sri Lanka is not
safe."

 (Reporting by Shihar Aneez and Ranga Sirilal; Additional
reporting and writing by Sankalp Phartiyal;
Edited by Martin Howell)
 ((sankalp.phartiyal@thomsonreuters.com; +91-22-68414377;))