Long-term impact of Easter Sunday Attacks on SMEs
The impact of the Easter Sunday attacks on the overall tourism sector has been documented widely, and larger hotel chains in particular have been vocal about the massive losses they have suffered and continue to suffer as a result of long-range cancellations and the general lack of security. However, there is a dearth of information on the event’s effects on small and medium enterprises (SMEs) and the informal sector.
“This is worse than the tsunami. I have 20 rooms in Colombo City Beds. I had 9 staff members – already I have had to send 3 of them home. I also have an inbound tour operation since 1978. This operation too has come to a standstill. We had many bookings for Summer (July-August) – all of this has been cancelled. My agents in Europe say they don’t get any queries for Sri Lanka anymore. We may have to close our operation if we don’t receive any funds for six months.” says Rohan Abeywickrema, ASMET President
Based on discussions with associations representing these smaller enterprises, as well as individual businesses, we outline below some of the key negative effects of the terror attacks on this section of the industry:
Downsizing and Subsequent Labour Shortages
According to the Association of Small and Medium Enterprises in Tourism Sri Lanka
(ASMET) – comprising about 100 small hotels, travel agencies, restaurants, and activity providers like bullock-cart riders – many businesses are downsizing by either discontinuing staff or sending them on compulsory leave (as providing food and accommodation is costly). Other service providers like safari businesses have also had to scale down, with one safari business noting that all 15 of its safari jeeps have stopped operating since the attacks. Several homestay owners and workers who are part of ASMET have started to look for work in the Middle East.
This is expected to result in a severe labour shortage once the industry begins to recover. The absence of skilled labour, as well a reluctance to join tourism as it is viewed as a risky industry, would present a challenge to a wholesome sectoral recovery. This would compound the labour challenges the industry was facing even before the attacks: tourism has long suffered from negative social perceptions, which in turn have inhibited young people and women from joining. Already, certain tourism training schools are seeing fewer admission applications. Given the current industry situation, industry players fear that better-skilled tourism workers are likely to go abroad looking for opportunities.
