- Hoteliers thank CBSL Governor for mandatory foreign currency payments
- CBSL stipulates new guidelines via Extraordinary Gazette
- All hotel service providers registered with the SLTDA must sell accepted currencies to banks or credit them to a foreign currency account of the hotel service provider, within 3 business days.
- The same applies to all payments made by electronic funds transfer card
- Hotels may accept payments in rupees from foreigners upon presentation of original documentary evidence that this local currency represents currencies converted by an authorized dealer.
- All hotel service providers required to submit reports to SLTDA and CBSL
|THASL President Mr. Shanthikumar|
|CBSL Governor Nivard Cabraal
The Hotel Association of Sri Lanka (THASL) said yesterday that requiring non-residents to pay in foreign currency bodes well for the tourism industry and the country, as it would increase reserves and encourage a aggressive destination marketing.
On Friday, the Central Bank (CBSL) via an Extraordinary Gazette stipulated new guidelines following the approval of the Monetary Council.
“We are very grateful for the swift action taken by CBSL Governor Nivard Cabraal to assist hotels by putting in place the required regulations with immediate effect,” said THASL Chairman Mr. Shanthikumar.
“The Hotel Association of Sri Lanka, on behalf of the entire hotel industry in the country, thanks Governor Cabraal for understanding the plight of hotels and for making it mandatory for hotels to receive their dues in foreign currency of all agents, individuals and others for accommodation and other services provided to non-residents.
Shanthikumar said that Governor Cabraal, in a detailed discussion, fully understood the responsibilities of the hospitality sector in terms of settling foreign currency loans and interest payments, importing machinery and advertising and promotion costs for direct marketing in international markets to increase arrivals.
“This (latest move by the CBSL) will undoubtedly help the country acquire much needed foreign currency to flow through the established formal channels that will aid the government’s economic growth efforts. It will also help hotels to be even more aggressive in promoting Sri Lanka and overseas to increase tourist arrivals in the future,” Shanthikumar stressed.
He said the hotel sector was the largest investor in the tourism industry with over $15 billion and was a key player in attracting tourists with its diverse and unique product offerings with hotels/villas located in different parts of the country.
Shanthikumar said the accommodation sector also has the highest workforce of any tourism industry and brings in the highest revenue to government. He added that tourism revenue was the top net foreign exchange earning industry with more than 90% of revenue floating in foreign currency to the country in normal times.
“The government has been extremely supportive. We appreciate the assistance given by the government to the tourism industry in these extremely troubled times and thank the leaders for it,” said Shanthikumar.
The government is counting on a faster rebound in the tourism sector to increase foreign exchange reserves. Two years of the pandemic have seen the country lose a potential $10 billion in foreign exchange earnings from tourism. Actual profits in 2020 and 2021 were only $1 billion, while in 2019 they were $3.6 billion despite the Easter Sunday bombings that year. In 2018, tourism revenue reached a record $4.4 billion.
The Extraordinary Gazette (No. 2263/31) requires hotel service providers registered with and licensed by the Sri Lanka Tourism Development Authority to accept payments for services rendered to persons residing outside Sri Lanka only in foreign currency from January 21.
Foreign currency so accepted must be sold to a licensed commercial bank or licensed specialized bank or credited to a foreign currency account of the hotel service provider, within three working days from the date of acceptance of such currency foreign.
All payments made using electronic funds transfer cards must be credited to a foreign currency business account of the hotel service provider.
A hotel service provider may accept payments in rupees for services rendered to a person residing outside Sri Lanka, provided that such person presents original supporting documents certifying that such rupees represent the foreign currency brought into Sri Lanka by persons residing outside Sri Lanka. outside Sri Lanka and converted through an authorized dealer or restricted dealer.
A hotel service provider should endorse original documents provided to it by a person residing outside Sri Lanka and retain copies of such supporting documents for a period of six years or such other record retention period as may be required by law, as the case may be, from the date of acceptance of such rupees.
All hotel service providers shall submit reports and/or statements to the Tourism Development Authority of Sri Lanka with a copy to the Foreign Exchange Department of the Central Bank of Sri Lanka as required from time to time by the Director General of the Sri Lanka Tourism Development Authority and/or the Director of the Foreign Exchange Department of the Central Bank of Sri Lanka.
All hotel service providers are required to provide free access to officers of the Central Bank of Sri Lanka, who may be authorized by the Governor or Deputy Governor, as the case may be, to inspect or examine the records maintained for the purposes of these rules, and review all measures taken by these hotel service providers to ensure full and strict compliance with these rules.
The Director of the Foreign Exchange Department of the Central Bank of Sri Lanka has the right to take legal action in the event of non-compliance or transgression of these rules by any supplier of hotel services.