Sri Lanka’s tour operators were all fired up when they knew time was running out on a circular sent out by hoteliers insisting that payments be made in dollars starting November 1. Lawyers representing the Sri Lanka Association of Inbound Tour Operators (SLAITO) stated in a letter addressed to The Hotels Association of Sri Lanka [...]

Business Times

Hotels want dollars from November 1

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Sri Lanka’s tour operators were all fired up when they knew time was running out on a circular sent out by hoteliers insisting that payments be made in dollars starting November 1.

Lawyers representing the Sri Lanka Association of Inbound Tour Operators (SLAITO) stated in a letter addressed to The Hotels Association of
Sri Lanka (THASL) dated October 27, 2021 that the invoice by THASL to receive payments for bookings made by destination management companies and travel agents and inbound tour operators only in US dollars or in any foreign currency has no legal basis nor is there any right; contractual or otherwise, which has accrued to the THASL to demand payment from them.

THASL in their Circular No. 46 of 2021 dated August 30, 2021 has stated that the Management Committee had unanimously decided that effective November 1, 2021, all hotels will invoice and receive payments in USD for bookings made by DMC’s (travel agents).

It was pointed out that if the decision is not revoked the SLAITO members are likely to “strongly canvass the suspension and/or dismissal of such decision in the appropriate forum/s.”

The letter further noted that “the underlying condition precedent is the voluntary consent of both parties” and cannot be “imposed” on SLAITO members when they are not agreeable to it.

It was pointed out that SLAITO members invests over US$7.5 million per annum in marketing of the destination that benefits all THASL members and that without such investment “it may not be commercially viable for the vast majority of the said member hotels of your organisation to carry on with its operations.”

In this respect, the letter also adds that SLAITO “vehemently objects to your unilateral decision to invoice and receive payments from destination management companies only in USD or other foreign currency, and that the members of my client will refuse to make any payments in USD to any hotel but will continue. Hoteliers receive payments from the tour operators in rupee value based on the dollar rate existing on the date on which the tourists check-in. But now it is learnt that hoteliers want to resort to an attempt made in the past as well to demand payment in dollars from tour operators.

It is learnt that during a meeting between SLAITO and THASL regarding the issue the former had been made to feel small by the hoteliers; as a result of this many queried how they could hold a discussion when they were treated disrespectfully.

SLAITO Past President Nilmin Nanayakkara said, “They can’t bully us and this I personally don’t like – and my personal feeling about being bullied has nothing to do with the lawyer’s letter from the collective SLAITO committee decision.”

“The committee decision was that we will not allow any association to forcibly interfere in our right, but we should be open for discussion if they are reasonable,” he noted, adding: “But they must learn to respect the partner in business without trying to act like the big brother.”

“They implemented the minimum rate within 48 hours and then wanted to compel us to pay in dollars but we have never acted in a manner without being cordial to them in the past,” Mr. Nanayakkara said.

Sri Lanka’s tourism industry has been facing a severe shock with all stakeholders in the industry impacted with closures and facing difficulties in loan repayments since the outbreak of the pandemic. The industry is now opening up with expectations high on winter traffic but this new turn of events has come as a blow to the industry’s one voice concept.

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