Minimum Room Rate could be scrapped in two months: SLTDA

2 May 2024 05:00 am - 11 - {{hitsCtrl.values.hits}}

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Cites unfair practices of DMCs as main reason for MRR regulations

By Nishel Fernando

The government may consider scrapping the reintroduced Minimum Room Rate (MRR) for Colombo city hotels in two months, after evaluating whether it has fulfilled its purpose.

“As the minister (Tourism Minister Harin Fernando) said, in a month or two, we might consider removing it,” Sri Lanka Tourism Development Authority (SLTDA) Chairman Priyantha Fernando told Mirror Business.
In September 2023, the SLTDA reintroduced the MRR for Colombo city hotels after considering the hoteliers’ requests.

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 reintroduction 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 Association of Inbound Tour Operators (SLAITO) says it favours a few stakeholders.

However, Fernando pointed out that the unfair practices of the destination management companies (DMCs) forced the SLTDA to reintroduce the MRR.

“The problem is with the DMCs; they charge a higher rate from customers. They don’t pass on the benefits to the hoteliers and the margin that they retain is much higher than the normal margins.

We would ideally like them to settle this among themselves. When they were unable to compromise, we were compelled to come in,” he added.

Fernando shared that the hoteliers from other areas such as Kandy have also requested the SLTDA to introduce similar MRR regulations. However, he said that the MRR has laid a foundation for room rates, hence he opined that the market force should determine the future prices based on this foundation. “Now, since the foundation has been laid, we should let the industry build up on that. If we can get a better rate, it will benefit the industry stakeholders as well as the whole economy,” he said.

Currently, there are two lawsuits ongoing against the SLTDA and Tourism Ministry regarding the MRR.

“If we revoke it in lieu of the current ongoing litigation and so on, it falls back on the previous MRR, which was there, which is much higher; it would be detrimental to the DMCs. We can remove it totally and say there’s no MRR application from now on, until we announce again. So, we are watching the situation,” he elaborated.

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Avarice to become millionaires overnight Thursday, 02 May 2024 07:35 AM

You all are trying to kill the goose that lays golden eggs!

Tourist Friday, 03 May 2024 07:18 AM

These greedy mindless idiots should take a look at the competitive price structure of better quality hotels in SE Asia and India and consider how long the tourists will accept these hiked up hotel rates in Sri Lanka. I agree, with you it is bound to kill the GOOSE.

CJ Thursday, 02 May 2024 07:45 AM

Government authorities impose stupid regulations and then blame it on a stakeholder when things go wrong!! Let the hotels and DMCs work it out between them...you guys focus on changing outdated laws and building infrastructure that would attract foreign visitors to the country. Then both hoteliers and DMCs will benefit.

Premalal Perera Thursday, 02 May 2024 08:13 AM

In a so called free market environment, any attempt to fix prices will be doomed to failure. Like price controls it can only survive in a monopolistic environment.

SLTDA dumbos Thursday, 02 May 2024 09:10 AM

Who checks whether online booking sites are selling those hotels on MRR?

Jude Thursday, 02 May 2024 09:20 AM

Harin "Backstabbing" Fernando not an capable minister, he's a ace bootlicker and he top the list of most corrupted POLITICIAN in SL.

Hon. Sarneris Thursday, 02 May 2024 09:53 AM

The govt should stay out of pricing, but should make sure the stipulated standards are maintained as per the star rating. Countries like Malaysia have no price restrictions and end up with 20 million tourists per year, when we are barely scratching the surface and out heads of course.

Anton Kim Thursday, 02 May 2024 11:09 AM

Politicians should stay out of business, supply and demand drive prices< up or down, service in so called 5 star hotels in Sri Lanka needs to improve.

Sunil Thursday, 02 May 2024 12:32 PM

Jude whatever you say, Harin has done a phenomenal job to rejuvenate the industry from it doldrums against all the pessimism and criticism. Just talk to the little those benefitting from the spin offs of the industry these days. Of course there will always be those who are jealous and envious of his success who will be eager to throw brickbats, even his former close associates from with the SJB whom he left behind.

wsw Thursday, 02 May 2024 06:15 PM

Yeah sure, Tourism in Sri Lanka has picked simply because of Harin's efforts. Displays your bias without prejudice.

jan verbiest Thursday, 02 May 2024 07:59 PM

let the market free to make the rate for rooms

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Minimum Room Rate could be scrapped in two months: SLTDA

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