Sri Lanka hotel occupancy picks-up, revenues weak amid aggressive price cuts

ECONOMYNEXT – Sri Lanka’s hotel revenues are weak but occupancy is starting to pick up with aggressive price cutting drawing international and domestic tourists, industry officials said.

"Revenue is very low and I think it will take a year or two for revenue to return to the levels seen before the Easter Sunday attacks," said Saliya Dayanda, President of the Cultural Triangle Hoteliers Association and co-chair of the Association for Dambulla and Sigiriya Tourism Promotion.

Sri Lanka hotels had slashed rate by around 50 percent in May and June to increase occupancy. Some hotels are already quoting similar rates for the same months in 2020.

Sri Lanka is sometimes seen as pricey compared to East Asian rivals and prices now more comparable on booking engines.

Central Bank Governor, Indrajith Coomaraswamy had also said that while occupancy rates at hotels are picking up even for the winter season (November through February) revenues may be pressured due to discounted prices.

Occupancy rates at hotels across the country had fallen to below 10 percent in May, but has recovered, with some chains such as Jetwing claiming occupancy rates of around 50-60 percent for July with discounts also being offered for local tourists.

Rohan Gamage, President of Bentota/ Beruwela Hoteliers Association said that occupancy at hotels in the resort area are only around 30 percent, including locals, compared to 80 percent before the attacks.

Hotels in the Western and Southern coasts fall after Monsoon rains start in May, but Sri Lanka’s East coast and Kandy as well as ancient cities are popular around that time.

Arrivals to Sri Lanka have picked up, from a 71 percent fall in May to a 57 percent fall in June, and in the first two weeks of July, the recovery has accelerated further, the state tourism office has said.

The government has launched a number of tourism promotion programs, and has cut airport taxes and charges in an attempt to lower air fares to Sri Lanka.
 (Colombo, 22 July, 2019)