ECONOMYNEXT – Hotels in Sri Lanka’s east coast which has its peak tourism season from May through September was hit even worse from the Easter Sunday attacks than the rest of the country which was running through its off season.
“It’s a tough time for the hotels in the area,” said Neranjan Morais, General Manager of Uga Bay in the eastern resort of Passikudah, famed for its calm beach and watersports.
Trincomalee, the northernmost of the east coast, is a whale and dolphin watching destination, while Arugambay in the southern reaches is a world-class surfing spot.
Ship wrecks, mostly World War II Allied vessels bombed by the Japanese, dot the east coast and are popular among divers.
East coast hotels charge premiums during the five-month peak season. Discounts are offered from October through April, when there are heavy rains and rough seas.
Morais said that peak season profits fund hotels during the lean season, but there was no such surplus built in 2019, due to April’s Easter Sunday attacks, which resulted in mass cancellations.
Hotels across much of the country however have its peak season from November through March, and were spared disruptions to their most profitable months.
Arrivals to Sri Lanka had recovered rapidly following the Easter Sunday attacks, which had targeted three luxury hotels and three churches, killing over 250 persons.
Occupancies had recovered from less than 10 percent in May to around 60 percent in August for many hotels which were offering 50-60 percent discounts on room rates.
In August, which forms a mini-peak season for the country due to a cultural festival in the central hill city of Kandy, tourist arrivals were projected to have fallen just 15 percent from a year earlier, compared to a 71 percent fall in May.
However, occupancies at the east coast lags even as arrivals recover.
“The occupancy is about 40 percent in east coast hotels in August and we are expecting a drop again in September,” Morais said.
Annual average occupancies had been around 73-75 percent over the past three years in the region, according to official data.
“It would be helpful if we could get some soft loans and government support,” Morais said.
He said that government loan programs are still in the pipeline.
East coast occupancies are also down as the region does not benefit from fast transport infrastructure such as highways, which the country’s main resorts along the south coast enjoy, analysts say.
Sri Lanka is projecting about 2.1 million tourists to arrive in 2019, down 10 percent from 2018, compared to a 30 percent fall estimated immediately after the bombings.
Tourism is Sri Lanka’s third largest foreign exchange earner, after worker remittances and apparel exports.
The tourism sector generated 4.4 billion US dollars in foreign exchange last year. (Colombo/Sep03/2019)