Shares to be offered to settle tourism debt - Sri Lanka Tourism Development Authority
The Sri Lanka Tourism Development Authority (SLTDA) is looking to attract foreign investors to acquire shares of local hotels to help them secure funding to repay their debts, stated SLTDA Chairman Priyantha Fernando.
In an interview that aired on Derana a few weeks ago, he said there are about Rs. 480 billion worth of loans taken by the tourism industry, and that the sector is in no position to repay these loans once the moratoriums are lifted.
Fernando said that out of the 47,000 rooms available in Sri Lanka, there is about a 17% occupancy rate, which is not sufficient for the larger hotels to break even.
He said that foreign investors have shown interest in investing in the tourism sector, and added that if Foreign Direct Investments (FDIs) are brought into the hotels, then two issues could be addressed – the foreign exchange shortage and the inability of the tourism sector to repay loans.
Moreover, he noted that FDIs in the tourism industry have fallen greatly, and the SLTDA is looking for investments in its resources in Passikuda, Kuchchaveli, Kalkuda, and Yala to earn a return.
According to the Central Bank’s annual report, the Investor Relations Unit (IRU) of the SLTDA received 45 new investment projects related to the tourism sector amounting to $ 134 million in 2021, with a collective capacity of 1,328 rooms. Meanwhile, the IRU granted approval to 30 tourism-related projects during 2021, amounting to $ 104 million, with a collective capacity of 922 rooms.
Further, Fernando said that an Indian party has approached the SLTDA with a proposal for a $ 15 million investment to build an entertainment centre in Colombo, to address the lack of entertainment for tourists in Colombo.
The Indian party has requested a 10-acre land in Colombo to build an entertainment centre with a capacity of over 20,000, and hold events by bringing international artists to Sri Lanka, targeting Indian tourists.
Also, he said that Royal Orchid Hotels group in India, which owns and manages a chain of 70 hotels in India, has shown interest in acquiring four to five hotels in Sri Lanka to manage, guaranteeing to increase the occupancy rate in those hotels by 65%-75%.
Source: Sunday Morning
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