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Proposed tariff hike threatens to electrocute hotel industry
- THASL says govt. will kill the goose that lays the golden egg by going ahead with the move
- Cautions many hotels will shut down as they become unable to stay afloat with high operational costs
- Says pleas to authorities to remove hotels from super tariff category have fallen on deaf ears
- By Shabiya Ali Ahlam
Sri Lanka’s hotel industry yesterday condemned the proposed move by the government to further hike electricity tariffs, asserting any upward revision will kill the sector.
Speaking on behalf of industry stakeholders, The Hotels Association of Sri Lanka (THASL) said it is time the authorities take into account the hurdles faced by the tourism sector and take corrective action.
“If the government is going to increase the tariff once again without considering the challenges we have been highlighting in recent months, then it is a crime,”THASL President M. Shanthikumar told Mirror Business yesterday.
“Without any alternative, if they are going to go ahead with the option they are considering, they are going to kill the goose that is laying the golden egg,” he added.
Power and Energy Minister Kanchana Wijesekera yesterday gave a massive jolt to consumers by announcing that plans are underway to implement an electricity tariff hike of up to 65 percent from January 2023.
He warned that if an increase in electricity charges is not made, consumers will have to bear with hours-long power cuts. In August, electricity tariffs were increased by an average of 75 percent.
If the proposal is implemented as planned, the tourism sector will be among the highest-hit industry.
Despite an improvement in tourist arrivals to the country in recent weeks, hotel occupancy is still at lower-than-expected levels. As a result, hotels and tourist service providers are struggling to stay afloat while retaining the workforce and managing the high cost of operations, shared Shanthi Kumar.
“We will show our objection in writing in the coming days. And in spite of that if they still go ahead and do it, we will have no option but to shut down most of the facilities. This will happen,” cautioned the THASL chief.
The tourism sector already falls under the super tariff category where they pay higher charges for electricity when compared with other sectors.
Even prior to the announcement of the first hike in electricity tariff that came into effect in August, tourism sector stakeholders urged the government to remove the crippling industry from the super tariff category, where the hotel sector pays the highest charge for power.
From August 10, 2022, hotels saw their electricity tariffs increase by about 80 percent. The hike was implemented in two stages, where 50 percent of the overall increase was implemented from August 10, and the balance 50 percent increase came into effect from November 10.
According to Shanthikumar, representations were made at the time to relevant authorities including the Sri Lanka Tourism Development Authority (SLTDA), the Tourism Ministry, and the Ministry of Power and Energy to remove the hotel sector from super tariff category. However, all pleas had fallen on deaf ears.
“There has been no progress. Absolutely nothing. No consideration whatsoever,” he said.
Average daily tourist arrivals up over 4,000 during last five days
- December has already become the month with fourth highest tourist arrivals for the year
- Total tourist arrivals for the year has so far exceeded 700,000 mark
Tourist arrivals to the country have significantly increased over the last few days with the average daily arrivals crossing 4,000.
According to provisional data released by the Sri Lanka Tourism Development Authority (SLTDA), the average daily arrivals reached 4, 023 over the last five days (December 22 to 26). This is a significant improvement from the 2,533 that was recorded for the December 1 - 22 period.
For the month of December so far, ending December 26, tourist arrivals have reached 73,314. As per the latest statistics, December records the fourth-highest tourist arrivals for the year.
The highest was recorded in March (106,500), and the second and third highest were in February (96,507) and January (82,327).
With the increase in the tourist arrivals rate witnessed during the Christmas holidays, tourist arrivals to the country for the January 1 - December 26 period have crossed the 700,000 mark, reaching 701,331.
“Aggressive” tourism promotion campaign planned for remaining winter
In an effort to capitalise on the steadily improving tourist arrival rate, the Sri Lanka Tourism Promotions Bureau (SLTPB) yesterday announced that it is planning an “aggressive” marketing and promotional campaign for the latter half of the winter season.
“The time is appropriate to highlight the message that Sri Lanka not only offers some of the best attractions but it is also open to welcome the discerning traveller,” SLTPB Chairman Chalaka Gajabahu said in a communique yesterday.
Accordingly, the SLTPB is mapping out a PR and media plan to gain the support of mainstream digital, social media, and news platforms representing key source markets.
SLTPB will appoint a PR and digital agency to support promotional efforts in key markets, where efforts will also be taken to collaborate with mainstream travel influencers. Under the new plan, Sri Lanka Tourism will also partner with international travel television shows.
SLTPB invited global travellers to visit the island nation and help it overcome the challenges faced by those dependent on tourism as a primary source of income and assist in playing a key role in foreign income generation.
“We assure all visitors a safe, memorable, and experiential journey on their next visit to Sri Lanka,” said Gajabahu.
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