Support to Sri Lanka’s Tourism Sector Strengthens Small Business Resiliency
USAID CATALYZE Private Sector Development Activity (PSD) Assists Small Businesses to Sustain and Grow during COVID-19 and Economic Crisis
Tourism was one of the hardest hit sectors during the COVID-19 pandemic with all parts of its value-chain being negatively impacted. Millions of jobs were at risk, mainly in micro-, small-, and medium-sized enterprises (MSMEs) that employ a high percentage of women. Tropical Asia Tours, a business offering a wide range of hospitality services, faced a severe economic crisis during the pandemic. Lockdowns led to a drastic reduction for the tourism sector. During this time, Tropical Asia Tours struggled with serious cash flow issues and an inability to pay employee salaries and essential maintenance costs, which led the small business to temporarily suspend the work of some employees. Additionally, Tropical Asia Tours was unable to invest in new product development and engage in branding activities, which limited its ability to diversify products or access new markets.
In January 2022, the USAID CATALYZE Private Sector Development Activity (PSD) provided Tropical Asia Tours a COVID-19 relief grant to retain employees, maintain health and safety standards, and develop marketing materials. The support received through this grant also helped Tropical Asia Tours to train new employees, hire additional staff, and produce new product catalogues and brochures to increase their visibility, which translated into greater sales. The company was also able to maintain the required health and safety standards, as stipulated by the Government of Sri Lanka, enabling the company to renew its safe and secure certification for the year 2023.
This grant also enabled Tropical Asia to have a positive impact on the economic growth in Sri Lanka, generating much-needed income in foreign currencies, as the country faces an inflation rate of 64 percent this year. Through the tours and excursions the company provided, the SME was able to support many businesses in the local communities as well as local suppliers, including guides, handicraft shops, handloom shops, local restaurants, tea plantations, and many more businesses, helping to boost job creation and incomes, particularly for women in the tourism sector.
As a responsible Destination Management Company, the grant also helped the company renew its safe and secure certification for 2023.
“Our relationship with PSD has truly helped our business survive in these difficult times,” said Chandana Deshapriya, Director of Tropical Asia Tours.
Due to economic and political instability in the country, there were many cancellations that resulted in no sales during March and April in 2022. However, with the support of the grant, CATALYZE helped the company to survive and grow its business during the pandemic and support many other MSMEs promoted through Tropical Asia Tours’ new excursions and services, further increasing inclusive growth, competitiveness, and resilience in the tourism industry across Sri Lanka.
