Tourists enjoy a trip to Independence Square in Colombo 7 – Pic by Pradeep Pathirana
- Starting August 1, the five-star will have to pay $130 plus taxes instead of the current $60 because of lower rates.
- President of the Hotels Association of Sri Lanka M. Shanthikumar and President of the Colombo City Tourist Hotels Association Rohan Karr hail the upcoming move; thank you Govt. to intervene at the right time
- Express’s move of confidence will help boost the city’s hotel business; save jobs and increase company profits
- Dispel claims that MRR will upset India’s largest travel market; it shows that SL has not yet found enough potential in the Indian market
- Opins’ move helps dispel negative perceptions of Colombo as an affordable destination; invites companies to think outside the box and come together to showcase the best of the city and Sri Lanka
- Colombo has 7,000 rooms and another 2,000 will be opened in the next 24 months.
|Hotels Association of Sri Lanka President M. Shanthikumar|
|Colombo City Tourist Association President Rohan Karr
The government has decided to re-introduce the Minimum Room Rate (MRR) in the city of Colombo from 1 August 2023, which hoteliers have revealed will help attract foreign investment from tourism and investment.
Daily FT has learned that the Government and officials responsible for promoting tourism have been worried for months over the extremely low prices charged by 5-star hotels even after peace returned to the country. Prices as low as $60 per night for two people with breakfast, 30% tax etc. are being expanded. According to plans, the new MRR for 5-star will be $130++, $100++ for 4-star and $80++ for 3-star.
The MRR’s mandate lasted between 2010 and 2019 before it was terminated following the Easter Sunday attacks.
Visitor arrivals reached 2.3 million in 2018, the industry’s best year since last year they dropped to 700,000, the same number as in 2010.
Due to rising prices in the midst of rising costs, the finances of the city’s hoteliers were at risk, which could damage the resurgence of tourism. In this context, the MRR will help to stabilize prices and help recover hotel costs and above all, boost profits from tourism. The MRR will also help reposition Colombo from being known as a low-cost destination.
It is important to attract high-quality tourists, city hotels need to improve their quality and performance. Colombo has more than 7,000 rooms and in the next 24 months, 2000 new rooms will eventually be opened.
When asked by the Daily FT about the upcoming MRR, the President of the Hotels Association of Sri Lanka (THASL) M. Shanthikumar and the President of the Colombo City Tourist Hotels Association (CCTHA) Rohan Karr welcomed the move and thanked the Government for its timely support.
“Although we understand that this idea will not please everyone, the need of the hour is to get more money for the work to go well and to attract foreign investment in this country and this plan is expected to help achieve this,” said experienced hoteliers. .
Shanthikumar went on to explain that the members of the hotel could not raise the prices due to pressure from other stakeholders in the industry despite the need to cry for the prices to be stable. Recently, we have repeatedly requested even through the media to set a lower rate for Colombo hotels, since we cannot go to the Government with a request plate again, he said.
Objections were raised by some parties when the pricing policy was implemented many years ago but the results at that time were amazing with hotels in Colombo doubling/tripling their income and the wages of workers doubling in addition to their monthly salaries.
Shanthikumar said these figures prove the benefits of such policies. He reiterated the need to be optimistic and move forward considering the interest of hotel owners and the whole country. There may be some disruption to business in the initial months due to the layoff of some of the local vendors but this is expected to stabilize over the next few months, he added.
Shanthikumar appreciated and supported the move and thanked the Government leadership, the Minister of Tourism, Harin Fernando and his officials and the Chairman of the Tourism Development Authority of Sri Lanka Priantha Fernando for understanding the problems of the hoteliers.
Mr. Shanthikumar also decided to follow the leadership of the country in running the tourism industry and being creative and bringing new ways to generate more dollars in the country.
The President of CCTHA, Rohan Karr, said that Colombo received the challenges of the 2019 Easter Week, the plague, the 2022 political unrest and the economic crisis.
He revealed that the city is seeing an improvement in occupancy with the city being about 50% to 55% occupied. 30% two months ago.
“Unfortunately, prices are still very low. Hotels and the country are deprived of foreign currency,” added Karr.
While he expressed confidence that business would stabilize by the end of the year to normal levels, Karr was concerned that prices would remain too low.
He also appreciated the limited amount and thanked all the officials for working hard to make this possible.
“At every meeting, the members ask for such a pricing plan because they could not get the money and repay the debt,” revealed Karr who is now the Executive Director of the Board of Hayleys PLC and Hayleys. Leisure Sector Managing Director. With a proven track record of revitalizing hotel businesses, Karr brings over four decades of experience in the hospitality industry in Sri Lanka and the United Kingdom.
He went on to say that Colombo has the best hotels that provide the best services but the low prices at the end were causing great concern to small hoteliers because they could not sell their products at $30. MRR will establish this. and overall, it will be very useful for the country, hoteliers and its employees, he stressed.
Some colleagues say that MRR will see a decline in the Indian market, which has been Colombo’s biggest market. Both Shanthikumar and Karr, who are veteran hoteliers in the city, denied it.
India is the biggest market out there and their economic growth which is seen as one of the best in the world means they tend to spend a lot of money. He said that with 1.5 billion people, there is business at all levels and all sectors such as FIT, groups, MICE, weddings, interest groups, leisure travel, family travel and more. etc. Furthermore, with 1 INR = Rs. 3.5, Sri Lanka remains an attractive destination for the Indian market.
The two are confident that the city’s Indian market potential is not diminishing. They asked hoteliers and retailers to think seriously and focus on high-paying customers. “This is the time to change and show the best of Sri Lanka. The need to move forward strongly was very important for success,” Shanthikumar and Karr confirmed.
Hotels employ more than 70% of the tourism industry’s workforce and are the industry’s largest business, accounting for over $15 billion in revenue. The highest contribution to the Government comes from hotels through taxes, levies, fees etc.