The highly debated Minimum Room Rate (MRR), which has the tourism industry divided, would come to an end, at the end of this month, Tourism Minister Harin Fernando confirmed.
Fernando yesterday put to rest the concerns and confusions on how long the MRR will continue to be rolled out, stating that it is time for the measure to be scrapped.
“There is good news. We have taken a decision and by May 31, the MRR will be removed,” Fernando told journalists yesterday while addressing a press conference regarding the controversies surrounding the
e-visa scheme.
“We wanted to have it till March 31. Unfortunately, the SLAITO (the Sri Lanka Association of Inbound Tour Operators) and THASL (The Hotels Association of Sri Lanka) went to court with it,” he said.
In September 2023, the Sri Lanka Tourism Development Authority (SLTDA) reintroduced the MRR for the 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.
While stressing that it is time for market forces to run, Fernando said the tolling out of the MRR was well thought out to assist the industry.
He noted that with tourism improving, there is not much need for the MRR.
“Even if we put the MRR, Shangri-La and all sell for much higher rates, where they go about US $ 180-200. With ITC coming, they have lifted the benchmark,” said Fernando.
“So, it is up to the hotels also to do their own marketing and they also have to go out there, do their marketing, get their promotions done,” added Fernando.
SLTDA Chairman Priantha Fernando shared that the objective with the MRR is achieved, with the city hotels seeing occupancy increased to 70 percent over the last six months.
“The income generated increased by 33 percent within the city of Colombo. Now it’s up to the hoteliers to continue this, based on the demand,” he said.
Meanwhile, in a separate conference held by the stakeholders of One Industry One Voice, the members highlighted the negative impacts brought about by the MRR.
According to Golden Isle Travel Managing Director Paddy Paul, the move was a massive hit for MICE tourism, as the Colombo hotels have become uncompetitive to the regional peers.
“The DMCs are unable to negotiate with the city hotels to offer discounts to paxs. In particular, the Indian MICE tourists are choosing Thailand, the UAE and Saudi Arabia over Colombo,” he said.
SLAITO Member Bobby Jordan Hansen alleged that the MRR was granted on the request of “a small number of hoteliers”.
“All we ask from the government is to facilitate tourism in a way we can go and market and convince the tour operators. Sri Lanka is a fabulous destination; just bring your clients here. That’s the message we have to give,” she said.
