Sri Lankan hotels pull brakes on price
View(s):By Sunimalee Dias
Lankan hoteliers are exercising caution in reducing their room rates for the winter season this year though tour operators believe prices would dip by at least 10-30 per cent.
Hoteliers Association President J. Kehelpannala speaking with the Business Times said reducing rates would be a decision by the hoteliers on an individual basis.
He agreed that hotel rates had gone up but “it is stabilising now” and noted that each hotel would find a niche in their own area in this respect. This decision of any possible reduction could be taken only by each company and in line with each of their operational costs, he explained.
Tour operators complain that hoteliers were increasing prices without considering the market conditions or the price in competitive destinations.
NKar Travels Managing Director Nilmin Nanayakkara told the Business Times that hotels need to be competitive in their pricing and believed they should take it up and work together and formulate a policy.
He noted that according to available data received by his organisation it was clear that “most of the hotels have brought down rates in the range of 10-30 per cent for the winter season.”
However, hoteliers opine that tour operators need to work hard to lure the tourists to stay at local hotels at these rates considering the fact that Sri Lanka as a destination has much to offer.
In this respect, Jetwing Chairman Hiran Cooray observed that the right marketing could bring in the numbers to fill rooms.
“If travel agents have the confidence to market the hotels not just on price,” he said they would be able to attract the right customers. Right now, he believed they need to jointly market the destination and Colombo “without grumbling.”Jetwing would not be cutting rates for winter but would be maintaining prices at current levels, he said, adding that unfortunately it was more a matter of positioning the destination in the post conflict era as opposed to the rate increases.
However, he pointed out that those increasing rates without improving on quality were likely to suffer.
Aitken Spence Hotels Managing Director Malin Hapugoda said they have not reduced rates for the winter but based on market conditions and occupancy especially for their hotels on the beach front there was a possibility of reducing rates.
He explained that with Tea Factory, Kandalama and the Earl’s Regency doing well they would not be reducing rates on these properties but the competition was mainly on the beach front hotels.
Asia Leisure Director Operations Reyhan Morris observed that there is a need to “drop the rates and be sustainable.”
In this respect, Asia Leisure would also be analysing the market to understand “what’s the maximum rate we can pull in for Sri Lanka,” he said adding that these rates would need to continue for the next two seasons to come.
A Colombo city hotelier complained that the right marketing was lacking for the destination and inadequate entertainment to lure tourists.
Galadari Hotel General Manager Sampath Siriwardena explained that in the first half of the year the hotel experienced a 22 per cent drop in occupancies and since winter was set to look good they were expecting an overall annual drop in occupancies to be at 13 per cent.
He noted that the minimum rates policy was impacting on their attractiveness for the MICE segment for which they were unable to provide with adequate discounts.
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