Categorized | TOURISM

SRI LANKA: MICE Tourism in high demand – Minimum Room Rates concept should be scrapped

Posted on 05 October 2017 by admin

 

By: Upali Obeyesekere – Editor, The Times of Sri Lanka.

The minimum room rates in Colombo hotels have been a hot topic in the tourism industry for some time. Many in the hotel trade consider this policy as disruptive as opposed to it been pro-active.

The ‘Minimum Room Rate’ introduced by Colombo City Hotels in Sri Lanka is a contentious policy. It has been a hot topic since introduced in 2009, by the Rajapaksa Government soon after the cessation of the north-east situation. Meetings, incentives, conferences and exhibitions, or Meetings, Incentives, Conferences, and Events (MICE) is a type of tourism in which large groups, usually planned well in advance, are brought together for a specific event. According to JLL Research, around sixty-five percent of Colombo hotel demand was from business tourists or MICE tourism. This upward trend in tourism arrivals prompted the Minister of Tourism Development John Amaratunga to do away with ‘minimum room rates’ as it hurts the market opportunities.

The Tourism Development and Christian Affairs Ministry on a couple of occasions over the past two years had communicated that the minimum room rate would be abolished in early 2017 since the market forces best determine the intrinsic value of a product. However, on each occasion, within a period of days, various lobby groups managed to get these policy decisions reversed.

Just last week Mahesh Fernando, General Manager of Hilton Colombo speaking to a mainstream media outlet in Sri Lanka was highly critical of the ‘minimum room rate’ and was quite vocal when he said, “The regulation is highly unwarranted, and the bigger hotels do not want any authority dictating terms to them”. Quite a strong statement from the GM of Colombo Hilton who is celebrating its 30th anniversary this year. Fernando’s rationale is that room rates should be fixed in keeping with market sources (demand and supply). In most other countries, this does not happen, he emphasised.

It must be said that successful tourism destinations in the region such as Thailand, Bali or Singapore do not have a minimum room rate criterion. The Maldives tourism industry depends on upscale tourists who pay USD $180 to USD $2,000 per day for the resorts. Minimum room rates in these places will kill the industry. This will apply to Sri Lanka over a period of time, analysts say.

Talking of the tourism industry and hotel accommodation, Shangri-La Hotel, Colombo is scheduled to open soon and reservations are accepted as of October 2017. It is a 5-star hotel with 31 floors and 466 rooms. The hotel is equipped with five restaurants and 34 suites. Shangri La Colombo is expected to offer a new level of luxury hospitality in Sri Lanka. Shangri-La's world-renowned CHI, The Spa presents 10 private rooms and a soothing selection of traditional Sri Lankan and Asian treatments and therapies. The spa is complemented by a state-of-the-art, 24-hour Health Club and one of the largest outdoor swimming pools in Colombo.

To meet the needs of Colombo's dynamic business community, Shangri-La Hotel, Colombo, offers the largest and most extensive hotel conference and event facilities in the region, which can cater to up to 2,000 guests.

Hilton Colombo is celebrating its 30th anniversary with General Manager Mahesh Fernando stewarding the destiny of the hotel. Long standing patrons of Hilton Colombo might recall the name ‘Gamini Fernando’, who was General Manager of the hotel in the early years, a person who fashioned the property into a business cum family hotel.

GM Mahesh Fernando stays positive on forward bookings. “We also see a lot of Sri Lankan expats and their families coming and staying with us, especially towards the end of the year. With the growth of Sri Lanka tourism and seven new Hilton Hotels to be added in Sri Lanka from next year, we are very optimistic of the future,” He said.

Interestingly, as at date of writing the popular search engine Booking.Com shows room rates (Canadian dollars) in Colombo ranging from $109 to $225 for a hypothetical December 20th reservation. Jetwing Colombo Seven $171; Cinnamon Red $109; Mandarina Colombo $127; The Kingsbury $169; Movenpick Hotel Colombo $166; Galle Face Hotel $161; Taj Samudra $219; Cinnamon Lakeside $156; Fairway Colombo $113; Hilton Colombo $169; Cinnamon Grand $156; Sh

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