South Asia’s tourism sector is yet to recover to its former levels since the COVID-19 pandemic. Except for Maldives others have only had approximately 40% recovery of arrivals from pre pandemic figures. This is the case for Sri Lanka as well.
Amidst this situation, Colombo is going to add another 2000 rooms, bringing the total rooms available in Colombo to approximately 7000. Colombo hoteliers are worried about filling their rooms at 5-star rates.
It is no secret that 5-star hotels have given out rates as cheap as $ 60 per double room on bed & breakfast basis per night since the COVID-19 pandemic. With the new proposal to re-implement minimum rates in Colombo; will hoteliers be able fill their rooms at $ 168 ($ 130 ++) per room, per night on room only basis? Will this work with the present tourism business in Colombo?
How can a quick increase of more than 100% of rates from 1 Aug 2023 help Colombo hoteliers? Can they even achieve a breakeven?
Above figures may not be 100% accurate, but when we place Colombo as a destination among other leading cities, anyone will understand the difficulty in marketing Colombo as a city tourism destination.
Investors must understand that adding rooms and long buffets will not be the unique sales points of Colombo hotels. What marketing strategies can be used. Pinching sales staff from neighbouring hotels, will definitely not help hotels to recover their ROIs. Colombo as a destination is not an obligatory overnight stop for beach stays or round trips for European tourists. In order to fill the empty beds, which market will fit in? Both Indian and Chinese markets are very price sensitive and understand the real value for money. They are well conversant with the 5-star hotel rates in the region. Indian MICE market and wedding market would be ideal; but the Indian Government has imposed a 20% tax on the Incentive market, which discourages Indian MICE market from looking for other Asian destinations but encourages them to stay in India. Indian air ticket prices are also at a massive increase. This too will, no doubt, discourage massive MICE travel groups.
Is there a new marketing strategy for Colombo?
Colombo could no doubt be marketed as a biodiverse city. It is the first capital to become a Ramsar Wetland City in the world in 2018. The many wetlands around Colombo with mangroves, the flora and fauna, birds, butterflies and beaches could be our USPs. Even diving on the many shipwrecks off the coasts of Colombo and the new coral reefs could be used as our future USPs.
The moment authorities decide to ban all the single use plastic in Colombo, it will be attracting the attention of new trend travellers. Colombo’s air quality has to be improved when comparing the other four cities. However, according to the world air quality index map, Colombo is not in a danger zone, but it is in a better condition than Dubai.
