Senior hotelier calls for debt restructuring

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As uncertainty lingers in the economy and the road ahead for the tourism industry appears to be an uphill climb, a senior hotelier calls for debt restructuring.

The Government and the Central Bank of Sri Lanka offered debt moratoriums to the tourism industry following the tragic Easter Sunday bombing in 2019 and extended it further following the global Covid-19 outbreak.

As per reports the debt moratoriums ended on Thursday (30).

“Over the past three years of unprecedented hardship, the macro-level relief granted to the industry via debt service relief and other non-financial support were instrumental in manoeuvring through the crisis,” Pegasus Hotels Chairman D.R.C Gunawardena said.

“As dark clouds continue to loom, the industry is in dire need of sustained macro-level support, specifically to restructure its existing debt burdens on more sustainable terms,” he said.

He proposes authorities to consider new options for debt restructuring, by allowing extensions for grace periods and payment terms, and introducing concessionary interest rates for loans to relieve the financial distress experienced by all local hospitality-related establishments at present.

As further means of support, hotels could be permitted to accumulate foreign reserves to hedge against future cost increases pertaining to their capital investments, he said.

He believes that such policy action focused on liquidity management would be fundamental to keep the industry alive and rekindle its growth.

By Mario Andree