Sri Lanka's tsunami-hit tourist south feels cost of war

KOGGALA, Sri Lanka, Aug 22 (Reuters) Standing by the razed foundations of his home in Sri Lanka's southern tip, tsunami survivor Namal Kumara is far removed from fighting in the country's north between Tamil Tigers and the military.

But the 24-year-old is paying a heavy price for the renewed conflict, which is deterring tourists from holidaying along the tranquil, sun-kissed beaches that skirt Sri Lanka's south coast.

The violence has begun to hurt job prospects in the tourist-dependent south and shatter the dreams of Kumara and other survivors of the 2004 Indian Ocean tsunami who were hoping to earn tourist dollars to put lives and homes back together.

''I need money to rebuild my house, and that comes from tourists.

But the war is stopping tourists from coming,'' said Kumara, dressed in a traditional red-and-black sarong and gazing at an empty beach.

The auto-rickshaw Kumara used last season to scoot European ourists between bars, hotels and craft shops along the coast stands idle under a tarpaulin by the ruins of his lost home.

Since the tsunami swept away his home, Kumara has lived in a tiny wooden shack that serves as both a place to sleep and a soft drink stand for tourists.

About 230,000 people were killed in the tsunami, around 35,000 of them in Sri Lanka.

The country's tourist industry had just begun to recover when the latest round of fighting between Tamil Tigers and the military erupted about three weeks ago following a four-year lull since a ceasefire deal was brokered in 2002.

Sri Lanka's tourist board maintains that tourist arrivals are forging ahead despite rising violence that many now view as the latest episode in a civil war that has spanned two decades.

WAR HURTS TSUNAMI RECOVERY But beach resorts are practically empty, foreign governments have issued travel advisories against visiting Sri Lanka's north and east and suspected rebels mounted three attacks this month alone in the capital, Colombo.

''If the war carries on, we won't have any business. I am expecting cancellations,'' said hotel owner Aruna Weerasekera.

He is worried about meeting payments for the 9 million rupees (86,500 dollars) loan he borrowed to rebuild his tsunami-battered hotel in the nearby village of Kathaluwa.

Five of the 10 rooms he has rebuilt since the 2004 tsunami are now occupied by mainly repeat German customers.

The island is heading into low season and hoteliers say the acid test will be when the peak season starts in November.

Some tsunami-gutted hotels sit in ruins, their owners unable to raise the capital to rebuild them. Thousands like Kumara live in temporary wooden shelters, some even still sleep in tents.

''There is a dramatic drop in tourists compared to last year,'' said Rasika Weeratunga, front office manager at the much larger Koggala Beach Hotel. ''People don't like to come to a country where there are lots of checkpoints.'' ''I have so many people asking what the situation is in the country, every day,'' he said, clutching a fax from a group of German tourists who he fears will cancel their planned vacation.

No one has yet cancelled existing bookings, he said. But the number of foreign tourists at his hotel has fallen by two-thirds compared to last year, and he is scrambling to compensate by holding wedding receptions and targeting domestic tourism.

''There has been trouble here for years. We've tried to come here many times before. The war stopped us 18 years ago. Then again. Then there was the tsunami,'' said housewife Francoise Gaits, visiting from Tarbes in southern France.

''So we thought, let's come anyway. There is no country completely free of problems these days. I'm not afraid.'' If the fighting in the north and east continues, as many analysts expect, a local economy already struggling to get back on its feet after the worst natural disaster in living memory will suffer a major setback.

''With the fighting with the Tamil Tigers, lots of people don't want to spend money on their businesses, and that means less work for the surrounding community,'' said 26-year-old guide Elpityawithana Nalaka, scouring for tourists in the southern port of Galle.

''There's a lot of people around here who have nothing to do,'' he added. ''We have to wait and see what the government does with the Tigers. Otherwise we'll all have to retrain and look for other jobs. But tourism is all I've ever known.'' REUTERS DKA VC0947