Hotels protest power tariff

Tuesday, 14 December 2010 00:01 - - {{hitsCtrl.values.hits}}

Hearing scheduled for tomorrow with association members and individual businesses to make recommendations

By Shezna Shums

The hotel industry is protesting the proposed electricity tariffs and presenting recommendations to the Public Utilities Commission (PUC) tomorrow.

Tourist Hotels Association of Sri Lanka President Anura Lokuhetty told Daily FT that recommendations regarding the proposed 2011 electricity tariff rates to the associations as well as individual hotels would be included in representations at the public hearing on setting electricity tariffs, which will be held tomorrow (15 December).

This comes in the wake of the Government’s proposed increased electricity tariffs that will hit the hotel industry hard in 2011, with an over 100 per cent increased in electricity tariffs in comparison to 2010.

The tariff, proposed to be effective from January to June 2011, ranges from Rs. 19.35 to Rs. 19.70 per unit. It currently stands at Rs. 9.30 per unit.

Lokuhetty emphasised that the industry is not requesting any concessions from the Government but for it to be provided an equal playing field, like other industries.

“The tourism industry suffered for the last 30 years and now we need some breathing space to grow,” he asserted.

He pointed out that the hotel industry directly or indirectly provides work for about 1.2 million people and a further four million are dependent on it – one-fifth of the population – and that they may be affected if these high tariffs were applied.

On the other hand, the President said that he as well as the hoteliers applauded and welcomed the positive measures taken by the Government in regard to the tourism industry, such as deductible expenses, higher capital allowances for new investments and reduced Customs duty on some goods and materials, along with easier means of getting approvals from the UDA.

Speaking to Daily FT, President of the City Hotels Association M. Shanthikumar said that the country’s electricity tariffs were among the highest in the region and that it was important to provide equal electricity tariffs to the hotel industry as it does to other industries.

“Such a high tariff will not help the industry, but kill it,” said Shanthikumar.

Both Lokuhetty and Shanthikumar did not express reservations about the proposed plan to charge US$ 20 on each bed from all five star hotels charging less than US$ 125 per day from next year, as local room rates are still reasonable compared to room rates in the Asian region.

“Even the outstation five star hotels now charge over US$ 125,” said Shanthikumar.

Regarding the tripling of the current 15,000 rooms in the country by 2016, he said it was an achievable target, along with the addition of 7,000 informal rooms.

Lokuhetty said that the only issue in this regard was that it would affect the resort hotels outstation, especially during off peak seasons and when it comes to full board and half board bookings.

Nevertheless, he expressed optimism over achieving the target of 2.4 million tourists to Sri Lanka by 2016.