Hoteliers say electricity tariff hike unfair given their meagre revenue

• Say this is not time to absorb any additional costs
• Call on authorities to remove hotels from ‘super tariff’ category
• Want hotels being placed under ‘industry’ category 
• Welcome discount and grace period offered by PUCSL 

By Shabiya Ali Ahlam 
Sri Lanka’s hospitality sector yesterday said the electricity tariff hike announced this week would further hurt the tourism industry, as it is not in a position to bear any further pain with the current meagre revenue. 

The tourism sector has repeatedly been called upon to step up to generate higher foreign exchange to help uplift the economy. However, with the tourist arrivals continuing to be low, the industry is barely managing to stay afloat. 
Speaking to Mirror Business, The Hotels Association of Sri Lanka (THASL) shared it is unsure for how much longer the industry can continue to take hits. 

“This is not the time for us to absorb any additional costs. We just can’t at this point in time. The industry is going through multiple issues, which are beyond our control. But we don’t have an option here,” said THASL President M. Shanthikumar. 

As hotels are charged under the super tariff category for electricity payments, Shanthikumar said the present status of the industry, which is grim, must be taken into account. Expecting to pay higher bills with very low revenue levels is not fair, he stressed. 

Shanthikumar said it is imperative for the relevant authorities to consider placing the hotel sector under the ‘industry’ category. The hotel sector has been advocating, even before the crisis struck, to be placed under this category. 

Shanthikumar went on to share that the representations have been made to the prime minister and Sri Lanka Tourism Development Authority (SLTDA) to look at placing hotels in the lower tariff category permanently. According to Shanthikumar, the response has been positive. 

Even though the hotel category will see an electricity tariff hike of about 80 percent, as per the new structure approved by the Public Utilities Commission of Sri Lanka (PUCLS) this week, the regulator said the hotels that are adversely affected by the issues in the country are allowed to merge with the general purpose category, where the overall increase was less. 

 Further, the PUCSL in its announcement said that considering the difficult business environment faced by the hotel category consumers, the tariff for the category would be implemented in two stages. 

Fifty percent of the increase will be effective from August 10, 2022, whereas the balance of 50 percent will be effective from November 10, 2022. 

While the hotels would feel a hard pinch from this month on, Shanthikumar said the sector welcomes and appreciates the grace period offered by the PUCSL. 

“It allows us some breathing space and time to adjust to the hike. Since the increase is needed for the economy, we are willing to go ahead but we strongly urge the authorities to place us in the industry category. It’s only fair,” said Shanthikumar.