While Sri Lanka has become a magnet for scores of Chinese visitors, it has also attracted the illicit business practices of some Chinese outbound tourism players.
Some Sri Lankan agencies have lost hefty sums as a result of their Chinese counterparts defaulting on payments.
“We have lost over US$800,000 over the past two to three years and spent another US$25,000 on costly litigation,” said Cammy Gunesekera, director at Viluxur Holidays Sri Lanka, one the biggest local agents handling the Chinese market.
Viluxor says it is now more cautious in dealing with agents in China, while also shifting its focus to Europe.
Industry sources place the total amount lost in dues from defaulting Chinese agents who operated tours on 180-day credit terms at around US$6 to US$8 million over the past few years. Around 40 to 50 Sri Lankan travel companies handle the Chinese market.
Harith Perera, president of the Sri Lanka Association of Inbound Tour Operators, acknowledges the problem but points out that half of the victims are not their members. “We have urged our members to be cautious in dealing with dubious agents. Agents should sort out this creditworthiness amongst themselves,” he said.
A larger problem, he noted, is the influx of unofficial Chinese guides accompanying a tour group, often using a small-time local agent as a smokescreen. They are not licensed, as required by Sri Lankan law, and their earnings go untaxed.
“This is a serious problem and we have even complained to the Chinese Embassy here. These unofficial Chinese tour guides are rampant,” said tourism minister John Amaratunga. “They are coming on visit visas and working as unlicensed guides, and taking away the business of licensed local guides.”
The industry has also been complaining about Chinese tourists entering into the country on short-term visas and setting up travel agencies fronted by a Sri Lankan.
Udaya Nanayakkara, an industry veteran who stepped down earlier this month as chairman of the Sri Lanka Tourism Promotion Bureau, also highlights a “nil revenue” ruse by Chinese agents, similar to the zero-fee tours in Thailand which have been banned by the Chinese and Thai authorities.
“Other than a free air ticket to the agent (who acts as an unofficial guide), there is no other fee. The agent comes along with the group, takes them to local shops and gets a huge commission, sometimes as much as 50 per cent. This is the agent’s revenue and all that money goes back,” he explained.