ECONOMYNEXT – Sri Lanka will remove controversial minimum room rates imposed on hotel from May 2024, Tourism Minister Harin Fernando said.
“There is good news, we are taking out the minimum room rate from the 30th of this month,” Minister Harin Fernando said.
“I think the market forces have to run. That’s what we believe in also, but there was a reason that this was. Even if we put the minimum room rate, Shangrila and all sell for much higher rates – they go 180-200.With ITC coming they have lifted the benchmark.
“So it is up to the hotels also to do their own marketing and they also have to go out there , do their marketing, get their promotions done.”
“Because we are the tourism ministry, we are responsible for this, but it also the responsibility of the tourism agencies who also work on their own marketing campaigns.”
Other hoteliers also echoed the Minister Fernando’s words.
Angelina Ondaatjie, Chairperson of several Tangerine group hotels told reporters in Colombo as a hotelier she naturally wanted the highest price but it was not possible to get the highest price from all properties at all locations just because the owner wanted it.
Grand Hotel in Nuwara Eliya for example was marketed at a high rate, but it the same could not be done at a hotel in the Southern Beach strip.
Because prices were dynamic it also could not be done all year around.
“People think that just increasing your price is a marketing tool,” Ondaatjie said. ‘It is not. If you want to sell a hotel, it has to be competitive, within the region, within the country as well within the whole of South East Asia.
“People say we are cheaper than Maldives. And everyone will come here. It does not work like that.”
The minimum room rate had also come with breakfast controls. Each star class hotel had to charge a certain price for breakfast.
Though hoteliers owned the hotel, their hands were tied in not only is selling the the room but also for breakfast.
The minimum room may have rate had done some damage already.
A European operator, who was running summer charters to Sri Lanka last year, had decided to bypass Sri Lanka this year as costs were suddenly higher in Sri Lanka.
On inquiry she found that informally hotels in the area had decided to follow high prices, after a good winter season on top of higher airport charges, which made Sri Lanka no longer viable.
The private visa fee crisis from had come on top of this in the lean season. (Colombo/May03/2024)