Court of Appeal issues orders to suspend Minimum Room Rate

The Court of Appeal yesterday issued interim orders suspending the operation of the Extraordinary Gazette Notification published on 11th September 2023 which imposed a Minimum Room Rate (MRR) for corporate and free independent tourist hotel rooms located within the limits of the Colombo Municipal Council area.

The Petitioners argued that the MRR was implemented without adequate consultation with key stakeholders in the tourism industry. They claimed that the rate lacked a rational basis, pointing out that the Sri Lanka Tourism Development Authority did not conduct a proper study before imposing the MRR. 

Several key stakeholders pointed out that the MRR would unfairly favour certain hotel categories while detrimentally affecting the industry as a whole.

The suspended notice, as published in Extraordinary Gazette No.2349/02, set the MRR at US$ 100 for five-star tourist 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. Criticism from a significant number of stakeholders was leveled against this notice. Until the final determination of the case, the MRR will cease to operate, as per the interim orders issued by the Court of Appeal.

Faiszer Musthapha, PC with Shaheeda Barrie, Tharaka Nanayakkara, Amila Perera and Sierra Amarasiri appeared for the Petitioners including Sri Lanka Association of Inbound Tour Operators, Sri Lanka Association of Professional Conference & Exhibition Organizers and Association of Small & Medium Enterprises in Tourism.  

Sanjeewa Jayawardena, PC appeared for the Hotels Association of Sri Lanka in support of the MRR. Earlier this month, Tourism Minister Harin Fernando said the MRR will be scrapped from 31 May.