Connect with us

Business

‘Government should rethink minimum room rates policy’

Published

on

A proposal, set to take effect from October 1, 2023, stipulates rates of USD 130 for 5-star hotels, USD 100 for 4-star hotels, and USD 80 for 3-star hotels within the city of Colombo. While the authorities argue that this measure aims to counter underpricing by higher-tier hotels, this policy threatens to undermine the growth and vitality of the tourism sector. It places an unnecessary burden on hoteliers already grappling with the challenges posed by the global pandemic and subsequent economic crisis. Further, it undermines the country’s competitiveness in the regional tourism market, the Advocata Institute said in a press release.

The release adds: ‘Pricing acts as a reflection of the quality of services offered by hotels and serves as a differentiating factor. If prices fail to accurately represent the services provided, customer dissatisfaction can ensue, especially when compared to more competitively priced options in neighboring countries such as Thailand and Vietnam. This is supported by a comment made by the Sri Lanka Association of Inbound Tour Operators (SLAITO) which states that “before implementing such prescribed rates, it is crucial to generate demand and interest in Sri Lanka…Adopting these rates will render Sri Lanka uncompetitive and result in a loss of clients, even when compared to hotels in New Delhi, with which they are currently competitive”.

‘Sri Lanka has previously attempted to implement price controls between 2009 and 2019, following lobbying by a segment of hoteliers aiming to compete more effectively against 5-star rated hotels. However, this policy failed due to numerous violations resulting from inadequate monitoring and enforcement by the authorities. Many hotels, including those that initially advocated for the government’s proposed room rates, have not complied with the established rates, as alleged by the former Minister of Tourism, John Amaratunga.

‘The imposition of minimum room rates restricts hotel owners’ flexibility in setting prices in accordance with market demand and effectively stifles healthy competition among various establishments. The tourism industry experiences fluctuations in demand that correspond to seasonal and weekly trends. Such demand patterns necessitate the ability for hotels to tailor their pricing strategies to capitalize on peaks and optimize profitability.

‘Every hotel has its unique room pricing considerations depending on factors such as location, size of the hotel, market demographics, level of competition, and type of service offered to name a few. The uniform imposition of minimum rates disregards the diverse range of hotels and accommodations available in Sri Lanka, catering to various budgets and preferences. This one-size-fits-all approach disregards the crucial factor of consumer choice. Imposing minimum room rates on a certain type of accommodation whilst disregarding alternate forms of accommodation available within the city of Colombo such as guest houses and Airbnbs, undermines the effectiveness of this policy.

‘Furthermore, hotels do not solely rely on revenue from room occupancy; rather, the occupancy of rooms paves the way for alternative sources of income such as from food and beverages, along with the provision of other hotel-related services. For example, a leading hotel in Colombo earned 77% of their revenue from food and beverages in contrast to the 19% earned from accommodation services in 2022. Therefore, when the government intervenes in one component of a hotel’s business model, it disrupts the interconnected methods of revenue generation.

‘Further, the foundation for these minimum rates—star classifications—is itself flawed. This system primarily relies on quantitative factors, often overlooking qualitative aspects such as service quality and ambiance. The inability to quantify these vital attributes compromises the accuracy of the classification.

‘The tourism industry in Sri Lanka has historically played a crucial role in the country’s economic development, providing employment opportunities, promoting cultural exchange, and contributing significantly to foreign exchange earnings. However, the recent decision to enforce minimum room rates could deter these potential visitors who are seeking affordable accommodation options, particularly given the publicity international vloggers have given Sri Lanka as a tourist destination. Further, this approach stifles innovation within the hospitality sector, and ultimately leads to reduced tourist arrivals and negatively impacts the entire value chain that relies on a thriving hospitality sector.

‘This policy undermines competition and oversteps in a serious way the role of government in a competitive market economy, the stated policy framework of the government.

‘The Advocata Institute strongly urges Sri Lankan Authorities to reconsider this ill-advised proposal.

By fostering an environment that embraces market competition, Sri Lanka can position itself as an attractive destination for travelers while allowing its hotels to thrive and cater to diverse consumer demands.’

Advocata is an independent policy think tank based in Colombo, Sri Lanka. We conduct research, provide commentary and hold events to promote sound policy ideas compatible with a free society in Sri Lanka. Visit advocata.org for more information.

Advocata spokesmen are available for live and pre-recorded broadcast interviews via +94 77 895 1491

CONTACT:

Subashini Kaneshwaren,

Senior Communications Executive, Advocata Institute

Email: subashini@advocata.org



Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

Malaysia courts more Sri Lankan travelers as ‘Visit Malaysia 2026’ gathers steam

Published

on

Malaysian H.C. Badli Hisham Adam: ‘Fresh biz opportunities

Malaysia is intensifying efforts to attract more Sri Lankan travelers by promoting its diverse tourism offerings, strong air connectivity, Muslim-friendly facilities and expanding business partnerships ahead of the ‘Visit Malaysia 2026’ (VMY2026) campaign.

Addressing the Tourism Malaysia product presentation yesterday in Colombo, Malaysian High Commissioner to Sri Lanka Badli Hisham Adam said tourism remains one of the strongest pillars of the long-standing bilateral relationship between Malaysia and Sri Lanka, helping strengthen cultural understanding, business links and people-to-people ties.

The event, organised by Tourism Malaysia Chennai in collaboration with the High Commission of Malaysia in Colombo, brought together Malaysian tourism stakeholders, airline representatives, Sri Lankan travel industry professionals and members of the media to explore new business opportunities.

The High Commissioner said Sri Lanka continues to be an important source market for Malaysia, with growing numbers of Sri Lankan travelers seeking destinations that combine diversity, affordability, quality experiences and convenient connectivity.

“As part of ‘Visit Malaysia 2026’, we warmly invite Sri Lankan travelers to discover the richness of Malaysia, he said.

Highlighting Malaysia’s tourism strengths, the envoy said the country offers a wide range of attractions, including multicultural cities, UNESCO World Heritage Sites, pristine beaches, tropical rainforests, cool highlands and unique wildlife.

These are complemented by world-class shopping, family-friendly attractions, educational opportunities, wellness and medical tourism, business events and internationally renowned hospitality.

He also stressed Malaysia’s position as the world’s leading Muslim-friendly destination, supported by an extensive halal ecosystem with internationally recognised certification, halal-certified restaurants, easily accessible prayer facilities and family-oriented amenities across the country.

Despite ongoing geopolitical uncertainties around the world, the High Commissioner said Malaysia remains a stable, peaceful and welcoming destination for international travelers.

He urged Sri Lankan travel agents to strengthen collaboration with Malaysian tourism providers by developing innovative travel packages targeting leisure travelers, business visitors and event participants.

The presentation featured leading Malaysian tourism partners, including Wyndham Ion Majestic, Lotus Desaru, Key Term Holidays representing the Sabah Tourism Board and Asian Overland representing The PULSE Group, showcasing Malaysia’s diverse tourism experiences and investment in the Sri Lankan market.

The envoy also acknowledged the contribution of airline partners and the media in enhancing Malaysia’s visibility and improving travel connectivity between the two countries.

Looking ahead to ‘Visit Malaysia 2026’, he said the future growth of tourism would depend on stronger collaboration, innovation and meaningful partnerships between industry stakeholders.

He expressed confidence that closer cooperation between Malaysia and Sri Lanka would generate fresh business opportunities while encouraging more Sri Lankan visitors to experience Malaysia’s culture, diversity and hospitality.

The High Commissioner concluded by expressing hope that the networking session would lead to stronger commercial partnerships and contribute to the success of ‘Visit Malaysia 2026’, further deepening tourism and economic ties between the two friendly nations.

By Ifham Nizam

Continue Reading

Business

Women Empowered Global launches ‘Leadership Lab’

Published

on

Senela Jayasuriya, Founder and CEO of Women Empowered Global.

Women Empowered Global (WEG), a network of award‑winning female leaders, corporate CXOs and entrepreneurs, experts and thought leaders dedicated to empowering women from six continents, unveiled the ‘WEG Leadership Lab’, a 24‑week virtual intensive programme, commencing 26 September. The programme is designed exclusively for women leaders who are ready to accelerate their careers, amplify leadership visibility, and drive transformational growth.

The women‑only leadership experience breaks the mould of conventional training, offering a powerful blend of masterclasses, mentorship, and practical leadership tools tailored for rising leaders, managers, and senior professionals. Participants will gain international exposure, sharpen essential skills, and the opportunity to join a vibrant knowledge‑sharing community which fosters confidence, resilience, and impact.

“The WEG Leadership Lab is not for casual growth. It is for women who are serious about transforming their leadership journey,” said Senela Jayasuriya, Founder/CEO, Women Empowered Global. “By combining global expertise with local delivery, we are creating pathways for women across manufacturing, trading, finance, marketing, technology, and management, as entrepreneurs, business owners, fractional executives, or corporate leaders, to thrive and build a more inclusive leadership landscape.”

WEG’s platform facilitates international exposure and career development for professionals and connects more than 4,000 members worldwide. The Leadership Lab builds on WEG’s flagship initiatives, including the 1 Million Women in Power campaign, the African Women Leadership Forum, the Business Hub, and the Global Online Academy. The programme aims to deliver a transformative journey equipping women to step boldly into leadership roles locally and internationally.

Led by Senela Jayasuriya (MBA, UK), an internationally recognized and awarded leadership & empowerment coach and innovation partner, keynote speaker, and certified expert, WEG collaborates with DEI specialists, corporate boards, Business and HR leaders, to design programmes which advance women’s careers, leadership visibility, equity, and inclusion. To date, she has successfully delivered leadership development programmes to more than 20,000 professionals.

Continue Reading

Business

JKCG Auto and Green EV join forces to build Sri Lanka’s most expansive EV charging network

Published

on

John Keells CG Auto (JKCG Auto), the authorised distributor of BYD and Denza in Sri Lanka, has launched a strategic partnership with Green EV on 26th June 2026 to significantly expand the charging infrastructure available to its customers across the island. The collaboration, formalised through a Memorandum of Understanding (MOU), marks a pivotal step in JKCG Auto’s ongoing commitment to building a comprehensive and reliable New Energy Vehicle (NEV) ecosystem in Sri Lanka.

Through this partnership, BYD and Denza owners will gain seamless access to Green EV’s public charging network of 100+ DC fast chargers and 70 AC chargers, spanning 20 districts and all nine provinces of Sri Lanka, from Jaffna in the north to Hambantota in the south, and from Puttalam on the northwest coast to Trincomalee and Ampara on the eastern seaboard, encompassing a mix of 40kW, 60kW, and 120kW fast-charging infrastructure. The network has been designed to ensure that customers can charge conveniently and confidently, whether in the heart of Colombo or in suburban and outstation communities, removing one of the most commonly cited barriers to EV adoption in Sri Lanka. Further strengthening customer confidence, Green EV has partnered with SLIC to provide a comprehensive insurance cover of LKR 100 million for every Green EV charging station, offering protection against potential damages and ensuring complete peace of mind for every user.

The initiative reflects JKCG Auto’s broader strategy to invest in the foundations of sustainable mobility, ensuring that the transition to electric vehicles is supported not only by world-class vehicles, but by a dependable ecosystem that addresses the practical needs of everyday ownership.

“If the future of mobility in Sri Lanka is going to be electric, success will hinge on how accessible we are able to make the actual vehicles, as well as the enabling infrastructure around them. JKCG Auto is proud to partner with other visionaries like Green EV to ensure that we eliminate range anxiety, so that every customer – whether in Colombo or anywhere in Sri Lanka will have the confidence to go electric,” JKCG Auto Chief Executive Officer, Charith Panditharatne.

Continue Reading

Trending