COLOMBO (Reuters) – Sri Lanka’s tourism industry began to suffer from the political crisis in the middle of the peak tourist season, with uncertainty prompting business and leisure tourists to cancel trips.
Tourism accounts for about 5 percent of the Indian Ocean island’s $87 billion economy, but the president’s firing of the prime minister in late October sparked a crisis that credit rating agencies say has weighed on the economic outlook.
“Our cancellation rate is around 20 per cent,” said Chandra Mohotti, manager of the luxurious Galle Face Hotel in Colombo, the capital, which has about 200 rooms.
“Usually our hotels are full. We offer discounts because we are concerned that the quota will not be used.”
The peak season for holidaymakers from Europe, the main tourist source, as well as India and China, usually runs from December to March.
But a source at national carrier SriLankan Airlines told Reuters that many flight bookings had been cancelled, especially from Europe.
“The crisis starts when tourists decide where to go,” said the source, who spoke on condition of anonymity. “(It) discouraged a lot of them.”
Mahinda Rajapaksa, who succeeded Ranil Wickremesinghe as prime minister, lacked a parliamentary majority and was blocked by a court from taking office, delaying the 2019 budget and leading to violence in parliament.
However, it may be some time before flight cancellations are reflected in arrivals. Official data on Thursday showed tourist arrivals rose 16.8 percent in November from a year earlier, led by a 37 percent jump in arrivals from Europe, even as arrivals from China, Japan, the Middle East and Southeast Asia all fell.
More than 2.1 million people visited Sri Lanka last year, according to tourism authorities.
Business travel has also been hit by the crisis, with companies moving meetings elsewhere in Southeast Asia.
“Some hotels have been canceled and some have been moved to Singapore and Indonesia,” said Sanath Ukwatte, president of the Sri Lanka Hotels Association, adding that conference and exhibition bookings were the hardest hit.
Harith Perera, president of the Sri Lanka Inbound Tour Operators Association, said he, too, has seen cancellations by the corporate sector.
“Bookings have slowed at the moment and that’s a concern,” he said. “If the current crisis persists, the impact will be huge. It’s not just European tourists who are canceling their bookings, but tourists from all over the world.”
Reporting by Shihar Aneez; Writing by Alasdair Pal; Editing by Clarence Fernandez