SLTDA shares guidelines governing MRR as it comes into effect on October 1

The Sri Lanka Tourism Development Authority (SLTDA) on Friday (15) shared with the hotel sector the guidelines with which the Minimum Room Rate (MRR) would be governed as it comes into effect on 1 October 2023.
According to the guidelines, hotels should position the product on social media and other public domains only as per the given classification. 

A hotel classified as 3-star cannot position the product at a higher star category in any public domain, similarly, a hotel cannot position the product at a lower star category than the classified level on social media and public domains.
While the rates across all distribution channels to change will be effective from 1 October 2023, all confirmed bookings on books/series groups and back-to-back foreign direct tour operator contracts as at 1 October will be honoured at the previously agreed rates. 

All other letters of agreement and contracts for individuals, corporate businesses, Leisure businesses, MICE businesses, Casino businesses, etc. which are presently below the proposed Minimum Rooms Rate, will become null and void effective from 1 October 23.
Further, contracts for crew stays will be honoured up until the end of the present validity period if signed prior to 1 October 2023. 

Renewals and new contracts are to be signed on the gazetted room rates.
The SLTDA asserted that no added values to be given for a better value proposition. Added values will be considered a violation. 
On 1 October, hotels will be requested to submit to SLTDA details of all future bookings mentioned that are to be honoured outside of the gazetted price. 

The Authority stressed that all bookings falling outside of what is stated on the information submitted to SLTDA and sold at a lower rate than the stipulated rate, will be considered a violation. Hotels are expected to forward a report to SLTDA with monthly occupancy and room rates. 
Three Internationally reputed audit companies will be appointed to audit adherence/compliance to the above-mentioned Gazette notification. The auditors will be given the names and contact numbers of each hotel General Manager. 

Outside the general audits, SLTDA will direct for spot audit if there is a need to do so in case of a reported violation where no prior notice will be given.
”The Minimum Room Rate Gazette has been introduced after careful consideration and we are confident that this will be beneficial to all Colombo City Hotels in the long term to improve revenues and profitability,” the SLTDA said.

Some stakeholders reiterate MRR detrimental for industry

A section of the tourism sector continues to reiterate that the MRR will negatively impact the country, making it less competitive with the regional peers.
In a brief joint statement, SLAITO, ASMET, SLAPCEO & One Industry One Voice pointed out the move is against President’s free market economic policies. 

“Overseas tour operators are completely against prize fixing. We oppose pricing against competition. 
“Price fixing is done by a set of lazy hoteliers with vested interests. They should create activities and market their hotels without getting the government to fix prices,” the associations said.

While asserting that all tourist generating associations are against the decision for which they were not consulted, the statement stressed that the Indian MICE sector will not be able to generate business to Colombo as planned.