Minimum Room Rate for hotels starting from Oct.1

 From left: Sri Lanka Conventions Bureau Chairman Thisum Jayasuriya, Sri Lanka Tourism Promotions Bureau (SLTPB) Chairman Chalaka Gajabahu, Tourism Ministry Secretary Buwaneka Herath, Tourism Minister Harin Fernando, Sri Lanka Tourism Development Authority (SLTDA) Chairman Priantha Fernando, and Sri Lanka Institute of Tourism and Hotel Management Chairman Shirantha Peiris  
Pic by Pradeep Pathirana

• SLTDA Chair says decision to reintroduce MRR is due to current unreasonable rates
• Points out current pricing undermines overall perception of local tourism sector
• In contrast to initial proposal, finalised MRR rates have been revised downwards
• SLTDA-approved MRR for five-stars is US$ 100++, four-stars US$ 75 ++and three-stars US$ 50 ++

By Shabiya Ali Ahlam

 Sri Lanka’s hotel sector will no longer be able to slash prices as they see fit to lure foreign tourists because the hotly contested Minimum Room Rate (MRR) will come into effect from October 1, 2023.

Sri Lanka Tourism Development Authority (SLTDA) Chairman Priantha Fernando said a decision has been made to re-introduce the MRR, as the current rates charged by hotels, specially the five-stars, are unreasonable and undermine the overall perception of the local tourism sector.

“At present some five-star hotels are charging as low as US$ 65. Where in the world will you find such low rates? And what do you expect other suppliers of accommodation to do?” Fernando told a press conference held in Colombo, yesterday.

“The price conveys a message as well, about the quality and standards. We are positioned on the global tourism map based on the pricing as well. In that sense, we have decided to go ahead and re-introduce the minimum room rates,” he added.

However, unlike the initial proposal, the finalised MRR rates have been revised downwards.
Accordingly, the MRR approved by SLTDA for five-stars is US$ 100++, four-stars US$ 75 ++ and three-stars US$ 50 ++. Provisions have been made for MICE travel.

Previously, the suggested MRR was US$ 130++ (five-stars), US$  100++ (four-stars) and US$ 80++ (three-stars).
The new MRR, which is currently under the review of the Legal Draftsman, will soon be officially published through 
gazette notification.

Accommodation providers who fail to comply with the MRR will face substantial fines, potential license revocation, and a considerable renewal fee of Rs. 5 million for five-star establishments.
The MRR is also imposed with the aim of boosting tourist expenditure. The move will allow hotels to improve the overall quality of the product, Fernando said.

He cautioned that Sri Lanka cannot “jump the gun” and look to attract high-end tourists without having the right tourism product. He pointed out that it will lead towards damaging the country’s reputation as a tourism destination in the long-run.

Fernando highlighted the importance of raising the average daily expenditure of a tourist from the current US$ 180 to at least US$ 300.

Global marketing blitz to go ahead as planned despite tender controversy

The Ministry of Tourism yesterday confirmed that investigations are underway into the tender irregularities pertaining to the global marketing campaign tender, but assured it would not delay the launch of the 360-degree communications effort.

Acknowledging it as a serious allegation, Tourism Minister Harin Fernando however said the issues regarding tenders do not fall under his direct purview and the responsibilities of the same lies with Tourism Ministry Secretary Buwaneka Herath.

While noting that a specific date cannot be shared as to when the investigation will come to a close,  Fernando said it depends on the inquiry.

“If very serious, we might even have to hand over the investigation to the CID. I personally, as a minister, do not get involved in these (procurement) matters. This comes under the Ministry Secretary,” 
Fernando stressed.

Tourism Ministry Secretary Buwaneka Herath however responded stating that no comments can be made on the matter as investigations are still ongoing.

Nonetheless, a document shared among media personnel at the presser said after preliminary inquiries, the Sri Lanka Tourism Promotions Bureau (SLTPB) officials, who handled the procurement process were temporarily suspended from their duties. 
Minister Fernando asserted that despite the hiccup, the marketing blitz will be launched as planned.
The campaign will be launched on August 19 by President Ranil Wickremesinghe, and the thematic campaign will kick off in October as planned, he said.

Following the detection of irregularities, the SLTPB on August 3 re-advertised the tender for the selection of a public relations agency to execute the PR activation for the communication campaign. 
The deadline for submission is August 25, and bids would be open immediately after the closing time.
The purpose of the integrated global marketing campaign is to change the negative perception about Sri Lanka which was created during the period of the financial crisis in 2022, the 
advertisement read.
The maximum total contract value for the project for a period of one year will be Rs.450 million.