Industry divided over planned MRR reintroduction

• “MRR will help the hospitality sector manage its expenditure better, and pay its workforce a higher service charge”- THASL chief
• SLAITO calls it “putting the cart before the horse” exercise, as charging higher prices without upgrading the tourism product will be futile

The Minimum Room Rate (MRR) for city hotels that will come into effect by October 1 has tourism sector stakeholders divided on the overall outcome of the move.
While one section expects positive outcomes, the other is certain it will lead to the downfall of the industry that took a massive hit since the 2019 Easter Sunday attacks.

The Hotels Association of Sri Lanka (THASL), speaking to Mirror Business, welcomed the move stating it will help improve the positioning of Sri Lanka tourism in the region and create a conducive environment for the stakeholders, specially those involved in the hotel sector.
“The re-introduction of the MRR was mandatory to prevent the hotels from being degraded. Getting higher numbers in and charging lower does not help the industry or its people,”THASL President M. Shanthikumar said.

“The MRR will help the hospitality sector manage its expenditure better, and pay its workforce a higher service charge,” he added. He pointed out that the decision announced by the SLTDA is well in line with the vision shared by President Ranil Wickremesinghe, which is to uplift Sri Lanka’s tourism product to draw high spending tourists, which in turn will help the country fetch higher foreign exchange.

Meanwhile, the Sri Lanka Association of Inbound Tour Operators (SLAITO) believes the MRR reintroduction will be detrimental to the entire industry. 
SLAITO President Nishad Wijetunga said that judging by the statement that Sri Lanka can attract high-end tourists by introducing MRR, it is clear that Tourism Minister Harin Fernando has been misinformed by a few with vested interests.  “The tourism product in Sri Lanka has aged and is tired, following Covid and other factors that kept tourists away for nearly 4 years. Except for a very few of the Colombo hotels, the rest are in desperate need of refurbishment in order to welcome tourists as the MRRs being stipulated,” said Wijetunga.

Without upgrading the tourism product, promoting the destination to attract high-end tourists will be a fruitless exercise, he added, calling the move a “putting the cart before the horse” exercise.  Artificially fixing high, unrealistic hotel rates will drive tourists to alternate destinations in the region that are competitively priced and therefore more affordable and offer value for money propositions, he cautioned.
MRR approved by SLTDA for five-stars is US$ 100++, four-stars US$ 75 ++ and three-stars US$ 50 ++.