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War drums dampen Sri Lanka`s tourism cheer
Tuesday, 21 December 2004 - 5:37 AM SL Time
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Sri Lankas tourism industry is set to wrap up its best year ever thanks to a truce between troops and Tiger rebels, but fears of a return to war have made the flourishing sector jittery once again.
The number of foreign holiday makers visiting this teardrop-shaped island off India`s southern coast crossed half-a-million by the end of November, compared to the same figure for the whole of last year. Hotels, which had been reeling under the effects of two decades of intense guerrilla war, had come out of the woods after the truce in February 2002. Room rates have sky-rocketed, according to industry officials.
Five-star rooms which could not sell for even eight dollars 15 years ago are now being grabbed at over $100 and hotels are posting `House Full` signs. However, a bombing at a Bollywood concert here last week, killing two people and wounding 19, jolted the industry and reminded them of the 'bad old days' when deluxe rooms were thrown in free to attract diners to restaurants. The Tourist Hotels` Association said they regretted the blast at Indian star`s concert. 'We are sorry that this incident took place, but we are more worried about the peace process, association spokesman Hiran Cooray said, If the peace process collapses, we will be in very, very serious trouble.
But, with the ceasefire on, we are doing very well. In fact, in the 17 years I have been in the industry, this year is going to be the best, said Cooray, who is also the managing director of Jetwing, a chain of de luxe hotels.
The future, however, is not that certain. Scandinavian truce monitors have warned that increased violations and a 20-month deadlock in peace negotiations could undermine the entire peace process and return the country to civil conflict.
Last week`s bombing is also seen as blow to the island`s bid to emerge as an entertainment hub of South Asia and attempts to attract a larger number of high-spending Indian holiday-makers. The official Ceylon Tourist Board had picked up part of the bill to sponsor the show, hoping it would be a good advertisement for the palm-fringed nation of 19 million people known for their legendary smile.
The Board`s director general Kalai Selvam said he believed the concert attack might have affect the number of Indians visiting the island, but there were no immediate reports of cancellations from other countries. We should be able to end the year with about 570,000 visitors and that would be a historic high, Selvam said. Tourism has been the only bright spot in the otherwise troubled Sri Lankan economy. The country`s trade deficit has hit a record high, the country is officially facing a foreign exchange crisis and year-on-year inflation reached 15.2 per cent compared to 0.2 per cent a year ago.
The investment community is concerned that inflation and a looming foreign exchange shortage could damage economic recovery prospects despite the success of the tourism sector, which has also helped keep the stock market buoyant. The rupee has weakened by nine per cent against the dollar after remaining stable last year, leading to a record trade deficit of $1.7 billion in the first 10 months of the year on soaring oil prices.
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