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

COLOMBO (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.

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, 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, 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