ECONOMYNEXT – Sri Lanka’s price controls involving minimum room rates, are scaring away tourists leading to lower than expected bookings, tour operators warned.
“Just when we had seen a slight increase in bookings in June for December onwards, as soon as this news came out, we were able to observe a decline,” President of Sri Lanka Association of Inbound Tour Operators (SLAITO) Nishad Wijetunge told reporters.
Sri Lanka imposed price controls on Colombo hotel rooms despite President Ranil Wickremesinghe professing to operate a social market economy, which requires a return to a market economy and competition, with the meetings and exhibitions market most affected, officials said.
“Now, if you take Thailand, Malaysia, Vietnam, UAE, Dubai, even a place like Delhi, that is considered to be quite expensive, we have done a comparison for October 10,” Nalin Jayasundara, Managing Director of Aitken Spence travels said.
“Sri Lanka with this minimum room rate will become more expensive than all the other destinations.”
SLAITO, Sri Lanka Association of Professional Conference Exhibition & Event Organisers (SLAPCEO) and Association For Small and Medium Enterprises In Tourism (ASMET) have said that they had opposed the move since its announcement in June.
“Since then, we began warning the authorities by holding discussions on the MRR,” Wijetunge said.
“It is very sad because all we needed was one good winter season to pull the entire industry out of the mess of the last four years.”
Sri Lanka is competing against countries in East Asia which are offering good service at competitive prices, officials said.
Sri Lanka was initially targeting 1.5 million tourists for 2023. Later authorities said they were planning to raise the target to 2.0 million.
But since then the target for 1.5 million has been maintained.
Read more:
Sri Lanka tourist arrivals expected to top 1.5 million in 2023: official
M. Shanthikumar of The Hotels Association of Sri Lanka (THASL), speaking with Economy Next said that the Indian segment of the market are rather price sensitive, and that there may be an effect on the numbers of bookings. “Traditionally, Indians are price sensitive. There could be a dilution of numbers.”(Colombo/October06/2023)