Supreme Court to adjudicate on hotel rates issue next month
The spat between Sri Lankan hoteliers and tour operators is about to reach its climax next month when a judgment from the Supreme Court is expected in the case against the imposition of a minimum room rate (MRR) for Colombo city hotels that could now spill to all parts of the country and be extended for more than its scheduled term.
The case against the MRR filed in the Supreme Court was brought up on April 3 and written submissions expected to be made on April 29 and May 7; the date for the judgment has been fixed for May 21.
Initially the MRR was brought in to stabilise the market and was to be removed by March but now there seems to be an extension of this concept and the possibility of it being spread out into the other parts of the country as well, Sri Lanka Association of Inbound Tour Operators (SLAITO) President Nishad Wijetunga told reporters.
He pointed out that while hoteliers talk about the numbers that have increased they do not highlight the numbers that have been lost due to the MRR.
Mr. Wijetunga said they have lost around 40 per cent of the business coming to Sri Lanka and noted that those hotels enjoying these MRR rates comprise only 900 rooms compared to those that are against it that have a total room capacity of 2000.
The majority of the bookings until now were already in place and contracted a year ahead and in this respect there is no study done to ascertain whether the tourists visiting the country are paying on the MRR rates or not, it was noted.
Sri Lanka Association of Professional Conferences Exhibition and Event Organisers (SLAPCEO) President Imran Hassan complained that only 22 per cent of the hoteliers in the city are happy about the MRR system in place and that this has adversely impacted Indian business in the country.
Hitting out sharply at a “cartel of hoteliers” he pointed out that with the MRR in place it has “seriously affected” MICE tourism.
Association of Small and Medium Enterprise Tourism (ASMET) Deputy President Prabudha Jayasinghe said the SME sector focus on India and the South Asian market come to the Colombo city but due to the MRR “we are losing business.”
He explained that they face stiff competition with Thailand, Malaysia on package tours.
In this respect a US$1800 14-day package will increase to US$3000 that would cost only US$1500 in destinations like Thailand and Malaysia.
SLAITO Vice President Nalin Jayasundera pointed out that they were not against price increases by hoteliers on the contrary they would be able to market it if it matches with any refurbishments or renovations carried out.
“Increasing income is talked about but this is selfish thinking because when two persons can come only one will come,” he said adding that this would mean down the line all stakeholders including
the income of taxis and vendors will also be impacted.
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