Sri Lanka’s tourism industry is hoping that the new President will make the island a more compelling destination.
Reforms And Policies
Tourism revival would depend on the reforms and policies that will be adopted by the winner of this month’s presidential election.
Nassim’s ‘Dairy King’, which sells 22 flavours of homemade ice-cream, was just one of thousands of businesses crushed by the crisis.
The 2022 financial crisis and the COVID-19 pandemic, pummelled his 13-year-old business.
The crisis erupted after foreign exchange fell to critical lows, squeezing imports of essentials from fuel to fertiliser.
“That was the biggest hit we faced,” said 62 year-old Nasim.
“We haven’t been able to get back the pre-COVID business,” he added. “I don’t know when it will come back.”
Expectations From The New President
“The new president must be able to appoint the right people and run the country competently,”said M. Shanthikumar, president of the Hotels Association of Sri Lanka.
He added, “We cannot afford any hiccups.”
Tourism in the country of 22 million, famed for its pristine beaches, ancient temples and aromatic tea, was crushed as the crisis drove inflation to 70%, power tariffs jumped 65% and the currency depreciated by 45%.
Protests in Colombo by thousands angered at hours of power cuts, queues at fuel stations and hospitals with scarce medicine forced then president Gotabaya Rajapaksa to flee Sri Lanka, though he has since returned.
Prime Minister Ranil Wickremesinghe has led a tentative recovery underpinned by a $2.9-billion bailout from the International Monetary Fund (IMF) and restructuring of $25 billion in foreign debt.
Inflation And Interest Rates
Now inflation and interest rates are down to single digits.
During the crisis, the economy shrank 7.8%.
However, three per cent growth is expected this year
Tourism
Tourism is a key contributor to foreign exchange earnings.
The tourism sector directly employs 205,000 people.
Tourism made up 2.5% of gross domestic product (GDP) in 2023.
This year, Sri Lanka hopes to earn $3 billion from two million tourist arrivals, on par with 2019.
Although pleased at the rebound, Nassim says his income is still half that before the crisis, as few locals have returned to sample his ice-cream.
The New President Must Strengthen Regulations
Nassim wants the new president to strengthen regulations and make the island a more compelling destination to lure longer-staying big spenders.
Need For Foreign Exchange
“Sri Lanka needs foreign exchange and 85% of tourism earnings remain in the country,” said Hiran Cooray, chairman of Jetwing Symphony, which runs about 35 hotels and villas.
“Without doubt safety and stability are most important. If that is lost, then tourism will be a victim.”
All Candidates Have Promised To Fix The Economy
All the main candidates in the fray, from Ranil Wickremesinghe to opposition leader Sajith Premadasa and Marxist-leaning parliamentarian Anura Kumara Dissanayake, have promised to fix the economy.
Dissanayake has also promised a new agency to govern and promote tourism, and have direct flights with countries that send the largest number of tourists
Wickremesinghe targets infrastructure upgrades to double arrivals to five million within five years.
Premadasa has promised to cut red tape, spur investment, and boost safety for travellers.
“We need growth,” said Shiran Fernando, of business group the Ceylon Chamber of Commerce.
(With Inputs From Reuters)
