Financial Times

Rs 400 mln national ‘rescue fund’ proposed for tourism sector


Sri Lanka’s Tourism Development Authority is looking at setting up a national fund for tourism industry “rescue operations,” according to the Chairman of the Sri Lanka Tourism Development Authority (TDA). The proposed fund is expected to accumulate Rs. 400 million over a period of 5 years.

“… I have discussed with the senior management of the Sri Lanka Tourism Development Authority, who came up with the proposal to establish a fund, which will have approximately Rs. 400 million over a period of 5 years. Such a fund can be used to carry out rescue operations in different situations,” said the Chairman of the Sri Lanka Tourism Promotion Bureau and Sri Lanka Tourism Development Authority, Bernard Goonetilleke, in a statement issued by the state agency.

The fund is to act as a safety net against uncertainties like the current global recession. Growth projections for international tourism, for 2009, is a low 6% due to the global recession, but the local authorities say things could get worse than this. “This year, tourist receiving countries will be happy if they can achieve 2% growth. And next year’s growth will not be any better,” said Mr Goonetilleke.
But Sri Lanka’s tourism numbers started sliding significantly since 2007. In 2007 arrivals dipped 11.7% compared to 2006. In 2008, arrivals dropped by 11% to 438,475 compared to 2007.

Fortunately, when the Minister of Tourism, Milinda Moragoda, realised that “all is not well with the industry,” another committee was appointed, on top of the existing national authorities, to look into the matter. The committee met twice in the tail-end of 2008.

“The second point is that, when the Minister of Tourism realised that all is not well with the industry, he appointed a committee called ‘Tourism Strategic Action Group’, under my Chairmanship, with a mandate that it should come up with solutions to the key concerns on a priority basis. The committee consists of representatives of the industry, heads of tourism associations and officials of Sri Lanka Tourism. The committee met twice, on 8th and 15th December 2008, and decided on a course of action, which is being followed by us,” said the TDA chief.

More plans

At this point, according to the press release, the authorities have many industry development plans.
In early 2009, the project office of the Kalpitiya Integrated Tourism Development Project is due to begin work, which will focus on developing 14 islands on an extent of 4,000 acres.

A similar project is on the cards at Dedduwa in Bentota. Another project is a US$ 20 million sustainable tourism development project with the World Bank. The government is also in the process of finalising an agreement with the European Investment Bank, which has a 10 million Euro facility, part of which can be used by the tourism industry.

The statement says that five priority action areas have now been identified for the industry. This includes setting up a safety net for the industry, setting up a strategic action group, focussing promotional activities in key tourism markets, developing domestic tourism and refurbishing tourism properties belonging to the national tourism authorities.

The authorities also have short-term activities to promote the industry. This includes talks with SriLankan Airlines to promote the country, and sustaining ongoing promotional activities.

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