SLTDA Chief says MRR making positive impact

• Outlines positive impact of MRR regime both on Colombo City Hotels and establishments outside capital 
• Says market conditions and industry standards crucial in determining future implementation of MRR
• Highlights importance of reaching a mutual understanding and agreement among all stakeholders regarding regimes implementation

Sri Lanka Tourism Development Authority (SLTDA) Chairman Priantha Fernando yesterday confirmed that the Minimum Room Rate (MRR) effective since 1 October last year, has made a positive impact to the overall wellbeing and growth of the tourism sector. 

“The progress of the MRR has been very good not just for the Colombo City Hotels but also establishments outside the capital in increasing room rates during the season. It has had a positive impact overall on the industry yields,” he told the Daily FT. 

Highlighting the importance of market conditions and industry standards in determining the future implementation of the MRR, Fernando stressed the importance of reaching a mutual understanding and agreement among all stakeholders regarding the regime’s implementation.

Responding to industry concerns about the impact of forward bookings on the MRR, Fernando explained that all walk-in and free independent travellers (FIT) were required to comply with the rates set by Colombo City Hotels. 

“This policy in turn, allowed other establishments outside Colombo to adjust their rates, benefiting the entire industry and the economy,” he added.

Fernando also shed light on the significant contribution of Indian travellers to tourism sector, particularly in terms of spending and their preferences for gaming.

“An Indian traveller spends 4.6 nights on an average. However, the bulk of the Indians tourists coming to Sri Lanka are for gambling purposes, where most of them are staying in plush hotels. Despite no records, it is evident that the indirect income generated via tourism is quite high. Thus, the MRR in Colombo City Hotels is a just a miniscule amount to the Indian travellers coming to enjoy casinos,” he said.

Fernando said that the authority will undergo a thorough review of the MRR in collaboration with industry stakeholders this week. 

The reintroduction of the MRR regime for six months from 1 October 2023, particularly for struggling city hotels, was to come to an end on 31 March. 

The SLTDA Chief suggested that reaching a consensus among industry stakeholders could mitigate the need for regulatory intervention, ultimately benefiting all parties involved. 

Fernando asserted the importance of addressing market demands and enhancing the overall visitor experience to ensure sustained growth and success in Sri Lanka’s tourism sector.