Proposed new Tourism Act comes under fire for ‘divorcing private sector involvement’

By Hiran H.Senewiratne

Leading travel and tourism industry specialists, Anura Lokuhetty and Nilmin Nanayakkara, both counting over 40 years of experience in the industry lashed out at the proposed new Tourism Act, which divorces the private sector involvement in the industry completely.

Both specialists stated in one voice to “The Island Financial Review” that, firstly, this is not the time to bring a Tourism Act and secondly, there was no need to bring a new Act. “This is detrimental to the entire industry. It dilutes the importance of the private sector, which contributes more than 90 per cent to the industry, they said.

Lokuhetty the former president of the Tourist Hotels Association of Sri Lanka (THASL) recalled that the Tourism Act was first introduced in 1968 and then a new one was introduced in 1978. It created four separate bodies overseeing, Tourism Promotion (SLTBP) Regulation (SLTDA) HR Training (SLITHM) and MICE (SLTCB).

Lokuhetty added: “The private sector plays a 99 per cent role in the industry and has invested billions of rupees to build hotels, maintain them and employ over 600,000 staff.

“The industry brings in around USD 4.5 billion annually (pre Covid-19 era), making it the third forex earner, contributing 12.6 per cent to GDP and there are around 2 million dependents on the industry.

“Unlike in other countries, Sri Lanka travel sector stakeholders did not retrench staff even when the hotels were closed down during Covid-19 and Easter Sunday attacks, shouldering that financial burden as well.

“In addition, we also provide 1 per cent from our turnover and not from profits to the government (in addition to other taxes) as a Tourism Development Levy which is used for promotions and other matters.

“Today there are over 38,000 rooms and 50,000 other accommodation providers, including home stayers, in the industry. Under the present Tourism Act the private sector is very well represented in these four bodies creating a ‘good mix’ and when key decisions are taken the private sector ‘voice’ is represented.

“Under the proposed Act, one body is going to be created scrapping three of the institutions (excluding SLITHM), which will weaken the say of the private sector when it comes to decision making in key sectors, like land allocations (tourism has a large land bank spread all over Sri Lanka), providing budgets for promotions, overseas tours and other key areas and there would be no proper ‘check and balance’ system. One other area is the maintenance and deployment of the TDL fund which is now worth several billion.

“The Act is also going to be passed in a major hurry and this also raises suspicions over the bona fides of bringing such an Act. Some stalwarts of the industry too are not briefed properly and their views too have not been sought out.

” If Sri Lanka Tourism wants to make changes, they can always bring in amendments and not a completely new Act also not at a time when hoteliers are facing the biggest threat to their survival.

“Arrivals have dropped due to Covid -19 and hoteliers are facing power cuts, lack of diesel and gas and also skyrocketing commodity prices and other issues and to burden them with a new Act does not ‘fit’ well at this time.”

Meanwhile, a Tourism Ministry official when contacted said that the industry would only gain by bringing a new Tourism Act since it would speed up decision-making and lead to the betterment of the industry. “Today we have to upkeep and coordinate four bodies and obviously when they are trimmed to two, there are advantages. Still, there would be representation from the private sector and already over 70 tourism associations have endorsed this and are eagerly waiting until it is implemented to reap benefits, he said.

The official added: “It’s the large tourism hoteliers who oppose this as they are only ones reaping benefits from the industry and don’t want ‘small players’ to propose and get involved in the decision-making process. We have also had a series of discussions with several bodies and have also obtained Cabinet approval for this new Act which will help to increase the benefits of the revenue from the industry among small timers as well.”

Meanwhile, Nilmin Nanayakkara, former president of the Sri Lanka Association of Inbound Tour Operators (SLAITO) said that the so-called 70 plus associations that Sri Lanka Tourism claims are supporting the industry were never even heard of four years ago and they have suddenly sprung up. “The leading associations are SLAITO, THASL, and ASMET (representing the SME sector) and all of them are against the Act. The current four bodies in tourism are not burdens but assets working towards the betterment of tourism as professionals are in them and they provide valuable inputs to the industry which are highly respected.”