The introduction of a minimum room rate (MRR) for Colombo city hotel rooms is to protect hoteliers from unfair treatment from destination management companies (DMCs) and influence the prices of hotel rooms in the rest of the country, Sri Lanka Tourism Development Authority (SLTDA) Chairman Priantha Fernando has said.

Speaking to TV Derana, he said that DMCs have not passed on the benefit of tourism packages to direct service providers such as hoteliers as DMCs pre-book Colombo hotel rooms for an entire year at a set price.

“When the issue was presented to me three months ago, I asked them (hoteliers and DMCs) to settle the issue between them and to come to a certain understanding and move forward on that basis,” he said.

Commencing on 1 October, tourism authorities have introduced an MRR for bed and breakfast in Colombo city hotel rooms, ranging from $ 50 upwards for hotels below three-star rating, $ 60 upwards for three-star hotels, $ 75 upwards for four-star hotels, and $ 100 upwards for five-star hotels.

He said that the DMC markets an eight-night, nine-day tour package of Sri Lanka to Indians at a cost ranging between $ 1,800 and $ 1,900, and although the money flows into the country, the amount that reaches the direct service providers is “very small”.

Fernando said that if open economic policies are adopted, the demand and supply will theoretically determine the price, “but here, there is something that goes further, there is an oversupply situation here, so, we should look at it not only from a theoretical point of view but also from the practical point of view,” he added. 

He said since hoteliers and DMCs could not arrive at an understanding, the former had sought the SLTDA’s intervention and protection of their sector. He noted no issues in increasing room rates as the rupee has depreciated against the US dollar (USD) at present.

“The tourist does not have any issue in paying these rates,” he remarked.

Fernando further said that rates of hotel rooms throughout the country can be changed by changing rates in Colombo city hotel rooms.

According to him, only 20% of Colombo city hotel rooms are booked through DMCs while the rest are booked through direct marketing and meetings, incentives, conferences, and exhibitions (MICE) tourism.