Prices of Sri Lanka’s Colombo city hotels will be increased from Oct. 1 under a Minimum Room Rate (MRR) with an aim to elevate the island nation’s capital as a high-end tourist destination, but local hoteliers vary of the move.
Piyantha Fernando, Chairman of Sri Lanka Tourism Development Authority (SLTDA) last week announced plans for MRR, adding that the charges within the city hotels are “ridiculously low rates”, such as 65 dollars a night with bed and breakfast on some 5-star properties.
“The price conveys an indirect message as well. The quality standards will be perceived by the price and will likely affect the way Sri Lanka is positioned on the global map,” he said.
From October 1, the minimum room rate charges for hotels below the 3-star rating will be 50 dollars upwards, 3-star hotels are to charge 60 dollars upwards, 4 star establishments are to charge at 75 dollars upwards, and 5 star hotels are to charge 100 dollars upwards.
Failure to comply with the legislation would result in cancellations of license, ineligibility for renewals and re-registration, along with a fine of 5 million rupees.
However, exceptions would be made for those travelling in for business related purposes, or else known as Meetings, Incentives, Conferences, and Exhibitions (MICE) travelers, he said.
President Ranil Wickremesinghe has reiterated the need for Sri Lanka to attract 2.5 million high-end tourists on a yearly basis, under the ‘Visit Sri Lanka’ tourism plan that is yet to be made public.
Local hoteliers, however, vary on the SLTDA’s MRR move.
“Tourists have access to seek more competitive and realistic pricing within the [Asian] region. If not Sri Lanka, they will pick competing destinations in the region and Sri Lanka as a destination will lose out altogether,” Nishad Wijetunge, President of Sri Lanka Association of Inbound Tour Operators (SLAITO), told EconomyNext.
“There is a surplus of hotel rooms in the city and the best way forward is to create events and activities in the city that would increase the demand for the city. Once that happens, the hotel rates will automatically go up.”
Tourist arrivals into the island nation have jumped over 67 percent in the first seven months of this year to 767, 913 while the revenue from the industry also has risen over 43 percent to 1.1 billion US dollars.
Both the arrivals and revenue have increased compared to the last three years, but still below the peak the country saw in 2018.
Industry analysts say attracting high end tourists may not be as easy because of soaring inflation and prices in countries where Sri Lanka is targeting high-end tourists.
