News
Minimum room rate leads to drop in City hotel occupancy
View(s):By Wasantha Ramanayake
Colombo city hotels are hard pressed for business despite Sri Lanka being selected as the best destination for the coming year with the minimum room rate of US $ 125 per night being the main obstacle. “We have asked the authorities for a possible reduction in the minimum rates but they have declined to accede to our request,” a city hotelier who wished to remain anonymous told the Sunday Times.
The Colombo skyline is dotted with hotels and other tall buildings
He said compared to December last year, customers patronising city hotels are less. Hotel room occupancy rate which is used to measure the percentage of rooms sold in December which is the peak of the tourist season, is very low he lamented. He said normally the hotel could maintain nearly 50 percent of the room occupancy rates throughout the year except in April, November and December.
The hotelier said hotels are now mainly patronised by the package tourists who stay one or two nights in Colombo on arrival or before departing from the country.
He said there is a drop in the tourists coming from Europe due to the economic crisis in the countries in the region. “We should ideally decrease rates to attract these tourists coming from Europe,” he contended just as the other countries in the region like Malaysia and Thailand are doing, he said.
Fears over doomsday predictions, seasonal increase in the air fares during this period, coupled with peak period supplementary rates in December may have also contributed to fewer tourists arriving in the country, he pointed out.
Hotel Taj Samudra Sales Director Sujit Samant expressing similar views said that prices should depend on supply and demand. “Across the world everyone is spending less,” said Mr. Samant adding that the hotel’s largest market India is shifting to other cheaper destinations such as Singapore, Malaysia and Thailand.
The fact that tourists are clamouring for cheaper rates is borne out when a tourist who has come to Sri Lanka requested accommodation in the YMBA building in Colombo Fort, an official at the Sri Lanka Tourism who wished to remain anonymous said.
The Sri Lanka Tourism officials also found around two hundred tourists in congested small city hotels in Colombo recently, he added. “We have found there were four persons in certain rooms,” he pointed out.Sri Lanka Tourism Director General Vipula Wanigasekera said the minimum rates in Colombo should be maintained. He said rates should not go below as they are comparatively cheap. He argued that the minimum rate at a five star hotel in Colombo, which is US $ 125, is relatively lower than in most of the countries in the region. He said rates at a five star hotel in India are higher and could be well over US$ 300.
The minimum rates were good as the hotels have increased their revenue, Renuka City Hotels Manager M. Gamage said. He too said only the hotels which could not afford to upgrade their facilities would complain. However, spokesman at Indra Regent Hotel which is a single star hotel said the hotel always has more than five unoccupied rooms during December but the hotel was full during December last year. He said the hotel is operating at the minimum rate prescribed rate of US$ 45 and is mainly patronised by Indians and Maldivians.
Jetwing Travel General Manager Daminda Dinesh said there is down turn of tourist arrivals in the country due to various reasons such as the economic crisis in a number of European countries and the doomsday prediction.
He said the minimum rate is a “catch phrase” because the hotels have to attract customers and at the same time take note of the rising costs such as food prices, wages and overhead charges.
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