Here are the key provisions of the directive in a more concise and straightforward format:
- Consistent Pricing Across Channels : Starting from October 1st, the directive ensures uniform pricing across all booking platforms.
- Honoring Pre-October Bookings : Bookings confirmed before October 1st will be honored at previously agreed-upon rates.
- Nullification of Existing Contracts : Contracts with rates below the Minimum Room Rate (MRR) become invalid from October 1st.
- Honoring Crew Stay Contracts : Crew stay contracts signed prior to October 1st will be honored until their current validity expires.
- Restrictions on Incentives : No additional incentives are permitted; hotels must accurately reflect their star classification.
- Group Complimentary Room Limit : Groups can receive a complimentary 11th room, up to a maximum limit of 10 complimentary rooms.
- Compliance Audits : Three audit companies will be appointed to conduct compliance checks, with penalties outlined for violations.
- Anticipated Positive Impact : The Chief of SLTDA expects the directive to positively impact financial stability and standardize pricing in the industry.
Sri Lanka Tourism Development Authority (SLTDA) Chairman Priantha Fernando officially informed Colombo City hotel General Managers on Friday about the implementation of Minimum Room Rates (MRR) from October 1, 2023, putting an end to speculations regarding possible deferment due to protests by tour operators.
The new directive introduces a set of guidelines aimed at standardizing room pricing across various distribution channels.
This decision follows the issuance of an Extraordinary Gazette by the Government on September 11, declaring the MRR effective from October 1.
The mandate requires Colombo City Hotels to strictly adhere to the Gazette notification, ensuring uniformity in room rates. The directive also includes provisions for honoring previously confirmed bookings made before October 1, 2023, encompassing group reservations, series groups, and contracts with foreign direct tour operators. These bookings will be honored at the rates agreed upon before the new regulations were introduced.
According to the Gazette, the MRR structure for corporate and free independent tourists (FIT) accommodates different hotel categories as follows: $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 with rates below the stipulated MRR will become null and void starting from October 1, 2023. Contracts for crew stays executed before this date will be honored for their current validity period.
For airline crew rooms, the MRR prices are as follows: $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 outlined in the Gazette notification.
The directive prohibits hotels from offering additional incentives to ensure compliance, aiming to create a level playing field for all establishments. Moreover, hotels are required to accurately represent their star classification on public platforms and align pricing accordingly.
Regarding group bookings, a complimentary 11th room will be offered, irrespective of the number of paying rooms, with a maximum limit of 10 complimentary rooms.
Chairman Fernando also emphasized that three reputable audit companies will be appointed to oversee adherence to the Gazette notification, responsible for conducting both general and spot audits. The Gazette specifies penalties for non-compliance, with guilty parties required to remit the penalty fee to SLTDA within two weeks of receiving the violation report.
The fees for re-registration and licensing of tourist hotels are as follows:
– 5-star tourist hotels: Rs 3 million (re-registration) and Rs. 2 million (licensing)
– 4-star tourist hotels: Rs 1.5 million (re-registration) and Rs. 2.3 million (licensing)
– 3-star tourist hotels: Rs 1.85 million (re-registration) and Rs. 1.2 million (licensing)
– 2-star tourist hotels: Rs 1.5 million (re-registration) and Rs. 1 million (licensing)
– 1-star tourist hotels: Rs 1 million (re-registration) and Rs. 750,000 (licensing).
Chairman Fernando expressed optimism about the long-term benefits of the Minimum Room Rate Gazette, believing it will not only bring standardization to pricing but also positively contribute to the financial stability of Colombo City Hotels, ultimately benefiting the entire sector. This thoughtful implementation is expected to usher in a new era of consistency in standards and profitability in the city’s hospitality industry.
In the first 12 days of September, Sri Lanka welcomed 46,308 tourists, pushing the year-to-date total to an impressive 950,626 visitors.
Sri Lanka Tourism has set an ambitious target of attracting over 1.55 million arrivals and generating $3 billion in income for 2023.
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