Hotels seek clarity on financial relief
Hoteliers are seeking a clarification from the Central Bank (CB) on the circular issued pertaining to the relief measures as interpreted by the banks.
Hotels Association President Sanath Ukwatte told the Business Times that the banks had interpreted in different ways the circular of the CB regarding obtaining of the Rs.25 million loan.
He noted that in this respect they would write to the CB for a clarification and hoped they would receive an immediate response as payment of April salaries would get delayed as institutions would close for the New Year holidays.
In the meantime, he noted that they would also request the government to support employees of hotels earning less than Rs.40,000 else they would have to borrow money to pay the salaries. A wage support scheme is being sought from the government for a 6-month period.
“All companies are cutting salaries of executive cadre of those earning Rs.100,000 and above while the industry is trying to maintain others on their normal salaries even though they are at home, since they don’t earn a service charge,” he explained.
In addition at the expiry of the 6-month wage-support scheme, hoteliers have proposed to expand the time period of the current Rs.50 billion re-financing facility until tourism rebounds.
“We propose for tourism businesses to continue to have access to low-interest working capital loans to pay the salaries of employees until tourism rebounds with the repayment period for these loans to be long term between five to 10 years in order to reduce the impact on business,” the statement issued by the association stated.
The industry has also requested a waiver of the EPF/ETF contribution until April 2021 considering the liquidity position of the tourism businesses that is “fast eroding.”
A further waiver of electricity and water bills for a period of six months is requested by the industry as hotels are experiencing zero occupancy, and hotels incur heavy utility costs to maintain their facilities.
The industry has also requested a 6-month moratorium on debt capital and interest payments.
Since the Easter Sunday attacks, the industry has been surviving on high levels of debt, and in this respect, the industry has proposed the government assist them with a debt restructuring programme and bring all debt undertaken by the tourism industry, excluding soft loans, into a seven per cent low interest, long term facility with a two year, repayment holiday.