ITC Chief backs minimum room rates

• By Nishel Fernando 

The recently unveiled ITC Hotels backed the highly debated Minimum Room Rate (MRR) regulation imposed on Colombo City hotels, citing that it serves the purpose of maintaining and

elevating standards of hotels when prices come down.

“It has to be looked at in the context of what purpose it serves? In the absence of a floor rate, what can happen is that standards will go down and upgradation  that is required won’t happen,” Group ITC group Chairman Sanjeev Puri said speaking to journalists at the opening of the property last week.
He asserted that the current floor rates serve the purpose of maintaining and elevating standards of hotels.
In September 2023, the Sri Lanka Tourism Development Authority (SLTDA) put forward guidelines regarding room pricing for Colombo city hotels.

The gazetted rates are US$ 100 for five-star hotels, US$ 75 for four-star hotels, US$ 50 for three-star hotels, US$ 35 for two-star hotels and US$ 20 for one-star hotels.  
The implementation of the MRR has created division within the industry. The Hotels Association of Sri Lanka (THASL) has expressed support for the MRR, while the Sri Lanka Inbound Tour Operators (SLAITO) says it favours a few stakeholders.
Two lawsuits are currently ongoing against the Sri Lanka Tourism Development Authority (SLTDA) and the Ministry of Tourism regarding the MRR. 

Independent economic think tank Advocata Institute in a policy brief slammed the move stating it is seen as a threat to competitiveness and unnecessary government intervention, potentially leading to customer dissatisfaction and loss of clients compared to neighbouring countries.
End last year, Tourism Minister Harin Fernando noted that the reintroduced Minimum Room Rate (MRR) for Colombo city hotels will not remain for long, and the industry is expected to operate based on market forces.
However, no indication on the removal of the MRR has been shared as yet.