Hotel price war hots up as tourist arrivals increase

24 May 2023 05:01 am - 16 - {{hitsCtrl.values.hits}}

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THASL says low rates in Colombo spreading to other cities
“Everyone is undercutting. There is price war going on” – THASL chief
Says move impacting employees due to low service charge, and economy for fetching lower forex

By Shabiya Ali Ahlam

Sri Lanka’s hotel sector is unable to fully reap the benefit of the increasing tourist arrivals as industry players have opted to slash rates in a bid to capture market share.

M. Shanthikumar

The Hotels Association of Sri Lanka (THASL) shared with Mirror Business that despite there being an improvement in the momentum of international visitors entering the country, the hotel sector has not been able to fetch higher revenues.
“One of the biggest issues we are facing at the moment are low rates. Everyone is undercutting. There is a price war going on.

The rates are low in Colombo, and this is spreading to other cities across the country which is impacting hotels,” shared THASL President M. Shanthikumar.
Discussions are underway among industry stakeholders to address the issue. While the majority are in agreement to maintain higher rates, a few are not keen on doing so, shared the THASL chief.
“It is unfortunate that five-star hotels are slashing prices. One can get a room at a star class hotel for about Rs.25,000 per night. Because of this the smaller hotels are pushed to cut rates to get bookings,” he added.

Shanthikumar cautioned that the move by sector players will severely impact all stakeholders and ultimately the overall economy of the country. Alongside having to grapple with higher overheads, employees are hit once again due to lower service charge.
“Staff is suffering because of lower service charges, and eventually the country, the national economy is impacted as despite the increase in tourist arrivals, the foreign exchange earned from tourism is low,” pointed out Shanthikumar.
Meanwhile, in terms of occupancy, hotels in Colombo, down South, and Nuwara Eliya are faring well. However, occupancy in other regions across the country remains low.

The month of May is witnessing a reduced momentum in tourist arrivals due to the end of the peak season. For the first three weeks of the month Sri Lanka welcomed only 57,142 international visitors.
Shanthikumar shared that bookings for the months of July and August are already “looking good,” and it is hoped the industry will take necessary measures to benefit from the improvement in tourist arrivals to the country.

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Comments - 16

DillonDP Wednesday, 24 May 2023 06:49 AM

When running cost have risen four folds ohm Shanthi complaints hotels cutting prices

SC Wednesday, 24 May 2023 06:50 AM

First you are saying that there is a price war and everyone is undercutting the next and you could get a room at a Star Class hotel for 25,000. My point, Ideally this situation should benefit the travelers. Then again at the end you are saying that there is a decline in tourist arrivals in May. So your idea is the increased rates will bring in more tourists.

Reformist Wednesday, 24 May 2023 07:05 AM

What is this guy saying? Are you saying SL hotel rates are low? They are not. Compared with many other countries, the hotels are expensive in SL. You can get a decent hotel room with breakfast for $30-$40 in Bangkok and Kuala Lumpur. Did you know that? Many things are expensive in SL. Look at the entrance fees to places for tourists.

joshua Wednesday, 24 May 2023 08:48 AM

You have no business to teach anyone how to do business. What is wrong in any person reducing prices to capture market? Is it not a sales strategy? You were begging and begging from the Govt when we suffered due to COVID. Now you want the Govt to do the business also for you?

Truth Wednesday, 24 May 2023 09:53 AM

This is nothing compared to the salary issues of the Plantation Labour community. You are able to slash because it's overpriced. Plantation companies are earning but they have zero ethics in treating their work force with dignity.

Sam Silva Wednesday, 24 May 2023 10:57 PM

The plantation sector labor is very demanding and no new workers. They demand Rs.2500.00 minimum plus meal and transportation per day. There work is deteriorating by the day. What kind of work ethics and dignity are you referring.

Danny Wednesday, 24 May 2023 10:38 AM

Sri Lanka use to offer very attractive packages for tourist from 5,star hotels to basic packages real holiday destination with comfort in affordability for families to enjoy the stay and come back Sri Lanka must have a image that had in the past beautiful place many things to experience with affordabilityhot

Price war Wednesday, 24 May 2023 10:41 AM

Now all wars are coming up in Sri Lanka .. political wars ; ethnic wars ; trade wars; religious wars ; Elephants wars with people ; language wars ; financial wars end now price wars ..when are you going to get rid of all these negative thinking from our dictionary? Don't turn this Paradise into Hell ?.Be positive

Tourists number will keep falling as rupee keeps climing Wednesday, 24 May 2023 10:47 AM

When the rupee keeps climbing, it becomes less worth it for overseas tourists as they can get less rupees per dollars. The smarter players are trying to get better market share, and that is natural competition. And there could be affect in Maldives and South India for tourists too. THASL President out of touch with business reality. He is all theory about ultimate utopia where hotel tourists will have care free unlimited spending. Tourists are not that stupid, they will follow best priced, same star accommodation where ever it is. THASL should look to replace him, with more able and younger person.

Tourist number going down as dollar falls Wednesday, 24 May 2023 11:11 AM

The THASL President must believe public and hotel owners are stupid. The tourist numbers are going down as the dollar goes down. Tourists have finite money to spend, when they run out they go sooner, or don't want to come at all. Dollar going down will destroy tourist industry. Central bank must make rupee fall drastically, and quickly if it wants to save the tourist industry. 500 rupee to dollar will cause 50% at least increase in tourists next year even.

Kapila Gabadage Wednesday, 24 May 2023 12:08 PM

This is off season and undercutting is possible to grab the higher market share and I don't know whether there exist any plan to promote tourism in INDIA or CHINA to wipe off the effect due to seasonal effect

fact Wednesday, 24 May 2023 03:51 PM

Hotels and airline tickets must be affordable to attract high no of tourists . 50-80$ for 4-5 star is reasonable .Most of the popular tourist destination keep these things affordable to attract millions of tourist .last year turkey was 4th highest with 29 million tourists since the flight costs and hotels were affordable for western tourists , also offer plenty of options to enjoy from beaches to ski resorts . Thailand ,Indonesia ,Malaysia and other places also keep all of these affordable .We need to devopl tourist places with cable cars and other facilities to attract more .ELLA ,Nuwereliya ,sigirya and adams peak can be equipped with cable cars. It must be affordable ,should not think of ripping off the tourists and the safety must be assured

fact Wednesday, 24 May 2023 03:52 PM

Hotels and airline tickets must be affordable to attract high no of tourists . 50-80$ for 4-5 star is reasonable .Most of the popular tourist destination keep these things affordable to attract millions of tourist .last year turkey was 4th highest with 29 million tourists since the flight costs and hotels were affordable for western tourists , also offer plenty of options to enjoy from beaches to ski resorts . Thailand ,Indonesia ,Malaysia and other places also keep all of these affordable .We need to devopl tourist places with cable cars and other facilities to attract more .ELLA ,Nuwereliya ,sigirya and adams peak can be equipped with cable cars. It must be affordable ,should not think of ripping off the tourists and the safety must be assured

fact Wednesday, 24 May 2023 03:53 PM

Hotels and airline tickets must be affordable to attract high no of tourists . 50-80$ for 4-5 star is reasonable .Most of the popular tourist destination keep these things affordable to attract millions of tourists .last year turkey was 4th highest with 29 million tourists since the flight costs and hotels were affordable for western tourists , also offer plenty of options to enjoy from beaches to ski resorts . Thailand ,Indonesia ,Malaysia and other places also keep all these affordable .We need to develop tourist places with cable cars and other facilities to attract more .ELLA ,Nuwereliya ,sigirya and adams peak can be equipped with cable cars. It must be affordable ,should not think of ripping off the tourists and the safety must be assured.

Raj Wednesday, 24 May 2023 07:34 PM

Shanthi, SL hotels was over priced right along past so many years.. Our tourism can pick up if we had low hotel rates .We need to look around , India , Malaysia ,Thailand ,and Vietnam have plenty to offer in their countries and the hotels are cheaper. Also, need attract tourist from Japan,Australia,UK ,France and USA who spend money and not the East Europeans they do not have Money to have a good meal...

dickie bird Wednesday, 24 May 2023 09:03 PM

Leave the hotel market alone THASL. At some point it will stabilise to realistic levels. Do not interfere.

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Hotel price war hots up as tourist arrivals increase

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