Hotels (Commonwealth Union) _ The enforcement of the minimum room rate (MRR) has had a detrimental impact on the growth of Colombo hotels’ occupancy rates and has deterred numerous MICE (Meetings, Incentives, Conferences, and Exhibitions) groups from choosing Sri Lanka as their destination.
Nishad Wijetunga, President of the Sri Lanka Inbound Tour Operators (SLAITO), disclosed that Colombo City hotels closed 2023 with an average occupancy rate of around 60%. He speculated that without the imposition of the MRR, this rate could have soared to over 75%. Furthermore, Wijetunga highlighted that the MRR policy has dissuaded walk-in guests (FIT) from choosing Colombo hotels as their accommodation option. These insights shed light on the potential impact of the MRR on hotel occupancy rates and the dynamics of guest preferences in Colombo.
Drawing attention to the disparity between governmental rhetoric and actions, Wijetunga expressed astonishment at Sri Lanka Tourism’s failure to align with President Ranil Wickremesinghe’s opposition to the MRR. Wickremesinghe had notably voiced his disapproval of the MRR during the Hotels Association AGM, advocating instead for market-driven room rates. Wijetunga’s remarks underscore the apparent inconsistency within the tourism sector, highlighting the need for coherence between official statements and operational strategies to foster a conducive environment for sustainable growth and development in Sri Lanka’s tourism industry.
In defense of the MRR, Chalaka Gajabahu, Chairman of the Sri Lanka Tourism Promotion Bureau, argued that it has enabled Colombo hotel staff to earn better service charges. However, Managing Director of CDC Events, Imran Hassan, countered this assertion by emphasizing the negative impact on MICE activities. Hassan highlighted instances where MICE events, such as conferences, were relocated to other countries due to the prohibitively high rates at Colombo hotels. For example, an Indian group of doctors opted to hold a 900-guest conference in Thailand instead of Sri Lanka due to the MRR constraints.
