• Directive ensures consistent pricing across distribution channels from 1 Oct.
• Bookings confirmed before 1 October will be honoured at previously agreed rates
• Existing contracts below MRR become null and void from 1 October 
• Crew stay contracts signed before 1 October will be honoured till the current validity ends
• No additional incentives allowed; hotels must accurately represent their star classification
• Complimentary 11th room for groups subject to a maximum limit of 10 complimentary rooms
• Three audit companies to be appointed for compliance checks; penalties for violations outlined
• SLTDA Chief anticipates a positive impact on financial stability, standardisation of pricing

Sri Lanka Tourism Development Authority (SLTDA) Chairman Priantha Fernando on Friday formally notified the General Managers of Colombo City hotels about the introduction of Minimum Room Rates (MRR) from 1 October 2023 ending speculation about a possible deferment due to protest by tour operators.  

The new directive brings forth a series of guidelines aimed at standardising room pricing across distribution channels.

The move comes following the Government issuing an Extraordinary Gazette on 11 September declaring the MRR effective from 1 October.

This mandate necessitates Colombo City Hotels to strictly adhere to the Gazette notification, thereby ensuring uniformity in room rates. The directive also contains provisions for the continuation of previously confirmed bookings made prior to 1 October 2023, encompassing group reservations, series groups, and contracts with foreign direct tour operators. 

These will be honoured at the rates agreed upon before the implementation of the new regulations.

As per the Gazette notification, the prices for corporate and free independent tourists (FIT), the MRR structure has been defined to accommodate different hotel categories: $ 100 for 5-star hotels, $ 75 for 4-star establishments, $ 50 for 3-star accommodations, $35 for 2-star hotels and $ 20 for one-star tourist hotels.

Any existing agreements that fall below the stipulated MRR will be rendered null and void starting 1 October 2023. Contracts for crew stays that were executed before this date will be honoured for the duration of their current validity period.

According to the Gazette, the prices for airline crew rooms are; $ 75 for 5-star hotels, $ 55 for 4-star establishments, $ 40 for 3-star accommodations, 30 for 2-star hotels and $ 20 for one-star tourist hotels.

However, renewals and new contracts must strictly adhere to the rates set out in the Gazette notification.

Hotels are prohibited from offering supplementary incentives to ensure compliance, aiming to maintain a level playing field for all establishments. Additionally, hotels must accurately present their star classification on public platforms, aligning pricing accordingly.

For group bookings, regardless of the number of paying rooms a complimentary 11th room will be extended, subject to a maximum limit of 10 complimentary rooms.

The Chairman also pointed out that three reputable audit companies will be appointed to oversee adherence to the Gazette notification. They will be responsible for conducting both general and spot audits. The Gazette also delineates penalties for non-compliance. “In the event of a violation, the guilty party is required to remit the penalty fee to SLTDA within two weeks of receiving the violation report,” the letter reads.

The fees payable for re-registration and licensing of 5-star tourist hotels is Rs 3 million and Rs. 2 million, 4-star tourist hotels Rs. 1.5 million and Rs. 2.3 million, 3-star tourist hotels Rs. 1.85 million and Rs. 1.2 million, 2-star tourist hotels Rs. 1.5 million and Rs. 1 million and 1-star tourist hotels Rs. 1 million and Rs. 750,000 respectively.

SLTDA Chairman is optimistic about the long-term benefits of the Minimum Room Rate Gazette. 

He believes it will not only bring about standardisation in pricing but also contribute positively to the financial stability of Colombo City Hotels, ultimately benefiting the sector as a whole. This careful implementation is anticipated to usher in a new era of consistency in standards and profitability in the city's hospitality industry.

During the first 12 days of September, Sri Lanka received 46,308 tourists, propelling the cumulative year-to-date figure to an impressive 950,626.

Sri Lanka Tourism has set an ambitious target of over 1.55 million arrivals and $ 3 billion in income for 2023.

 

SLAITO raises red flags over Govt. intervention in city hotels’ room market pricing