Fixing rates on rooms could end in courts
Sri Lanka's tourism industry has been split over a policy on a fixed room rate that could even send everyone heading towards courts and not welcoming guests.
The minimum room rates policy is set to come into effect from October 1 (today) and this would mean that all hotels in the country will have a fixed rate on which they could sell the rooms.
However, other industry stakeholders like those bringing down the tourists the Sri Lanka Association of Inbound Tour Operators (SLAITO), the Association of Small and Medium Enterprises in Tourism (ASMET) and the Sri Lanka Association of Professional Conference, Exhibition and Event Organisers (SLAPCEO) are vehemently opposed to the idea.
They have been considering the possibility of taking the matter to court in order to ensure there is fair play in generating increased arrivals to the country.
This section of the industry is consulting their legal advisers on obtaining a stay order against the minimum rates as a last resort.
However, it is learnt that some hoteliers are also not keen on working on a minimum rate policy at a time when the industry is seeing an increased number of tourists visiting the country.
While some in the industry believe that fixing a minimum room rate would mean "outpricing ourselves" others believe it would help keep the destination afloat.
While this kind of policy decision is considered biased by the authorities, the tour operators believe it will affect the promotions carried out to attract more travellers as other destinations would be selling at far lower rates.
This would mean Sri Lanka would be less competitive against most other destinations in the region.
According to the gazette issued by the Sri Lanka Tourism Development Authority (SLTDA) the prices for corporate and free independent tourist hotel rooms in US$ will be starting at $100 for five star; $75 for four star; $50 for three star; $35 for two star; and $20 for one star hotels.
Moreover, a 20 per cent commission is charged for prices for MICE events and 10 per cent commission for leisure travellers.