The government is being misled by a “cartel” that is looking towards making higher earnings without assisting the industry’s overall growth, a tourism industry expert said.
Sri Lanka Inbound Tour Operators President Nilmin Nanayakkara has said that the country and the local tourism industry were not reaping the benefits accrued to them due to the minimum rates structure imposed by the government.
He told the Business Times that this led to unfair competition and closed windows for job opportunities thereby reducing sales opportunities for hotels suppliers.
At a time when Sri Lanka was losing on Meetings Incentives Conventions and Exhibition (MICE) tourism from India and Pakistan to others in the region, he said this was a growing trend.
Minimum rates have caused a stir in the industry as city hotels were looking at making a fast buck by limiting occupancy and keeping rates competitive, he said explaining that this resulted in hoteliers restricting employment.
With employment maintained to provide for a limited number of visitors, hotels are not passing on the benefits gained from the industry to the country, he said.
In this respect, city hotels were charging higher rates while maintaining occupancy at around 50%, Mr. Nanayakkara pointed out.
On the other hand, it was believed that another position taken by the city hotels was in offering ad hoc discounts during low occupancy periods thereby undermining prospects of new opportunities within the industry.
Increased occupancies would inevitably result in an increase in business opportunities for restaurants, three wheelers, bars, shops, and a host of other stakeholders.
In this regard, he opines that a move towards allowing for demand and supply to take hold within the market would enhance occupancy levels in city hotels thereby providing space for job placements and better prospects for hotel suppliers within the sector.
On the contrary, it is however, likely to impact on the profit margins of the hoteliers, Mr. Nanayakkara observed adding that these hoteliers “have schemed for personal gains and benefits” and have undermined government plans of offering more jobs.