Tourism industy elated by Cabinet decision to allow imports of 1000 vehicles

The Tourism Ministry Secretary will chair two committees that will recommend criteria for the import of vehicles for the tourism sector, Sri Lanka Tourism Development Authority (SLTDA) Chairman Priantha Fernando said.

The Cabinet this week granted permission to import a limited number of vehicles for the tourism sector.

The Cabinet’s decision to resume the import of automobiles for the tourism sector is expected to boost the industry.

Mr. Fernando said, “The infrastructure issue is significant, as the vehicle fleet is twenty years old. The pandemic and economic downturn have led to numerous individuals losing their vehicles. This is why the resumption of vehicle imports was considered,” he said.

The approval for the import of 750 vans with a seating capacity of 6–15 people and 250 buses—small buses with 16–30 seats or large buses with 30-45 seats, including electric and hybrid vehicles—without special tax relief was granted by the Cabinet. This was in recognition of the vital role that transportation infrastructure plays in stimulating the tourism industry and propelling economic growth.

This comes as stage 1, as the requirement is much greater, Mr. Fernando said.

The deteriorating state of current vehicles has raised concerns, despite the tourism industry’s standard practice of restricting for six years the use of tourist transportation vehicles.

The situation has stained Sri Lanka’s standing as a top travel destination, in addition to lowering the calibre of visitor experiences.

A key step in reviving the travel and tourism industry and supporting the nation’s economic recovery initiatives is the importation of modern automobiles, Mr. Fernando said.

Mr. Fernando expressed optimism about a surge in tourist arrivals this year.

The Sri Lanka Association of Inbound Tour Operators (SLAITO) President, Nishad Wijetunga, said the Cabinet move was not only for electric and hybrid vehicles but also diesel and petrol cars.

Mr. Wijetunga also noted that, as much as electric vehicles are the way forward for sustainable growth, Sri Lanka does not have sufficient infrastructure, including charging stations around the country, to facilitate an EV fleet for tourist travel.

There will be strict conditions as the vehicles will be for tourist transport only. The SLTDA will formulate the conditions after the approval of the two committees, he added.

The quantum of foreign exchange brought into the country and being a registered tourism service provider will be a basic requirement, according to the SLAITO Chief.

Destination Management Companies (DMCs) in Sri Lanka confront the biggest challenge with the aged vehicle fleet. So, Sri Lanka's tourism-related entities welcome the decision that they have been awaiting for more than a year and a half since it makes the fleet reliable.

Touching on the hurdles that the sector is currently confronted with, Mr. Wijetunga said that besides the delay in the global marketing campaign, the Minimum Room Rate (MRR) in force in city hotels continued to pose challenges.

An increase in Ad Hoc Tour (a packaged travel product provided by an operator as a one-time occurrence) entry fees to tourist sites without a warning is also another problem encountered by tourists.

"However, we remain hopeful that the MRR will be removed and a global campaign expedited," Mr. Wijetunga said.

Meanwhile, SLTPB Chairman Chalaka Gajabahu attributed the recent rebound in the tourism sector to its effective crisis management.

State authorities and the private sector are utilising limited financial resources to explore cost-effective strategies for global promotions to boost the industry and the economy.

Sri Lanka’s tourism industry is focusing on achieving a target of 2.5 million arrivals next year and increasing foreign exchange inflows to combat the existing economic challenges.

A global thematic campaign titled “You’ll Come Back to Sri Lanka” will be accelerated. Moreover, Extreme, a leading adventure brand, has partnered with the SLTPB to enhance Sri Lanka’s tourism industry and make it a top adventure and leisure destination.

Touching on combining digital tools, Mr. Gajabahu said more technology-based approaches would be introduced soon for outbound and inbound tour operators.

The Vehicle Importers’ Association of Sri Lanka (VIASL) President, Prasad Manage, expressed despair that only vehicles used for the tourism sector have been allowed to be imported.

"The idea of importing vehicles was not a smart one for a single market. What will become of the car importers who depend on the company? The government ought to give other industries, especially agriculture, more consideration," Mr. Manage said.

According to the Ministry of Finance, the government intends to lift the prohibition on car imports by January next year.

The Tourism Ministry said the criteria for the importation of vehicles had not yet been finalised. With cabinet approval, two committees comprising representatives from the Ministry of Finance, the Ministry of Tourism, and tourism-related organisations would be formed.

Cabinet approval for the importation of vehicles for the tourism sector was granted, according to State Finance Minister Ranjith Siyambalapitiya, since automobiles used for tourist transportation should not be kept in service for longer than six years, after which their condition is unsatisfactory.