Tourism’s SMEs dismayed by state inefficiency

The tourism industry is made up of 80 per cent of SMEs that have kept the home fires burning these past 10 years but now these tour operators, reeling from the disaster that struck Sri Lanka on 4/21, are likely to close shop or resize in six months.

With no relief package to soften their woes, the soft loan offered by the government is hard to come as banks are not willing to take on the risk of financing SME tour operators or hoteliers. In this respect, Sri Lanka Association of Inbound Tour Operators (SLAITO) members will be pushing the government to intervene and underwrite the risk, Island Leisure Lanka Managing Director Chandana Amaradasa told the Business Times on Wednesday.

Incidentally these were the same banks running behind these SMEs during the good times offering loans that are now closing their shutters on the same sector that is struggling to rise up. Most SMEs were not willing to take on loans at the time now to their advantage, it was noted.

He noted that moreover, none of the SME members are ready to pay in two years since they are traditionally not asset based companies and whatever collaterals they may have are already exhausted. In this respect, they want a 5- year repayment period as opposed to the two years offered via the relief package.

Local tour operators generate nearly 75 per cent of the tourism business to the country; it was pointed out adding that of the total business over US$4.2 billion in revenue was brought in by them. SLAITO’s membership comprises around 240 that include a majority of SMEs while the Association of Small and Medium Enterprises in Tourism (ASMET) have a membership of about 100.

Since most tour operators spend their own money for promotions right now they were unable to do so as they need to sustain their businesses and the employees and in this respect have begun to cut down on their marketing spend as well.