Sri Lanka’s burgeoning reputation for Irish honeymooners and well-off holidaymakers will take a hit that will be difficult to recover from in the short term after the terror attacks on Easter Sunday.
That is according to the chief executive of the Irish Travel Agents Association, Pat Dawson, who said Irish visitors to Sri Lanka tend to spend large amounts over weeks at some of its top hotels.
According to holiday firm Travel Counselors, bookings in January this year were up 100% for Japan and 40% for Sri Lanka, putting them on the top 10 list for the first time for long-haul holidaymakers.
Mr Dawson said: “For many, Sri Lanka is a trip of a lifetime or a honeymoon where Irish visitors will spend up to three weeks on top hotels. This attack will affect bookings, no doubt.
“It took Tunisia a long time before we saw any sign of it coming back after its terror attacks,” he said.
Cathy Burke of Travel Counselors said it is a huge blow to Sri Lanka.
“I was in Sri Lanka 18 months ago and it is an amazing and diverse country, with the friendliest people I’ve come across in a long time. Our focus at the moment is looking after our clients on the ground and those due to travel in the coming days and weeks.
We are working with airlines and other suppliers to rearrange travel for those affected. I am confident that Sri Lanka as a destination will bounce back.
Sri Lanka faces a likely collapse in tourism following the bomb attacks on churches and hotels, which would deal a severe blow to the island’s economy and financial markets, and potentially force it to seek further IMF assistance.
Last month, the IMF extended a $1.5bn (€1.34bn) loan for an extra year into 2020, a key step in keeping foreign investors involved in what so far this year has been a top-performing frontier debt market.
However, with growth and therefore state revenues now likely to slow significantly, the budget targets agreed with the IMF may have to be reviewed.
There is even a possibility that more IMF money may be needed if foreign investment falls, adding to the hard currency gap left by plunging tourism receipts.
The Sri Lankan stock index dived 2.6% in its first day of trading after the attacks that killed more than 300 people, while the heavily managed rupee held steady.
Tourism is Sri Lanka’s third-largest and fastest growing source of foreign currency. A fall in tourism receipts is bound to weaken the rupee over time. The central bank is likely to have to raise interest rates.