Lanka to remove hotel minimum room rate from end May

Sri Lanka will remove controversial minimum room rates imposed on hotels from May 2024, and allow competition to return to the industry, Tourism Minister Harin Fernando said.

“There is good news: We are removing the minimum room rate from the 30th of this month,” Minister Fernando said in Colombo.

“I think the market forces have to run. That’s what we believe in also, but there was a reason for this. Even if we put the minimum room rate, Shangri-La 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 to do their own marketing, and they also have to go out there, do their marketing, and get their promotions done.”

“Because we are the tourism ministry, we are responsible for this, but it is also the responsibility of the tourism agencies who also work on their marketing campaigns.”Other hoteliers also echoed Minister Fernando’s words.

Angeline Ondaatjie, Chairperson of several Tangerine group hotels, told reporters in Colombo that as a hotelier, she naturally wanted the highest price. Still, getting the highest price from all properties at all locations was impossible just because the owner wanted it.

For example, the Grand Hotel in Nuwara Eliya was marketed at a high rate, but the same could not be done at a hotel on the Southern Beach strip.

Because prices were dynamic, it could not be done all year round.

“People think that just increasing your price is a marketing tool,” Ondaatje said. It is not. If you want to sell a hotel, it has to be competitive within the region, within the country, and within Southeast Asia.

“People say we are cheaper than Maldives. And everyone will come here. It does not work like that.”

Bobby Hansen from the Sri Lanka Association of Inbound Tour Operators said market forces had to operate as large groups, in particular, expected lower prices.

Priyantha Fernando said the agency had achieved its objective of pushing up the incomes of city hotels.