Sri Lanka costs more to holiday
View(s):Tour operators set to tame hard selling destination Sri Lanka
By Sunimalee Dias
Sri Lanka has become an increasingly expensive destination to sell as room rates are at least 30-40 per cent higher than its competitors in the region.
Tour operators have become increasingly worried that should the current trend of room rates as per the minimum rates in Colombo and those in the resorts continue,it could result in a loss for the sector.
Compared to Malaysia and Indonesia, Sri Lanka is currently 30-40 per cent higher in terms of the latter’s hotel charges, Sri Lanka Association of Inbound Tour Operators (SLAITO) President Mahen Kariyawasan said in an interview with the Business Times on Wednesday at his Nawala office.
Other issues that come up when tour operators attempt to market the destination as a package is that in addition to high room rates, the existing entrance fees to tourist sites have increased whereas most of the neighbouring countries charge relatively low fares, he explained.
He noted that while Sigiriya would charge US$30 as entrance fees from visitors, Dambulla costs $25 and likewise for Polonnaruwa and Anuradhapura. But he pointed out that in comparison entrance to the Taj Mahal would cost only $15.
Moreover, the problem persists in the current minimum room rates for Colombo city hotels that operators complain add to the burden as all year round rates remain unchanged.
Mr. Kariyawasan observed that the minimum rates were a daunting task to deal with when they attempt to attract the required MICE travellers from the Indian market to Colombo.
As observed last year the tour operators note that the 2013 winter was likely to be affected due to the existing room rates as a result of which occupancies had dropped in most of the four star hotels even in the resorts.
He points out that this summer they expect a slump of at least 10 per cent going by the current drawing capacity.
Commenting on a similar observation made two years ago that did not occur, he explained that this was mainly due to the Sri Lankan expatriates that visit the country and were accounted for.
In this respect, he believes the genuine tourists would mostly flock to the three stars and the guest houses.
Tour operators persist that they need to “strike a balance” with hoteliers in a bid to maintain competitiveness in the world market.
Mr. Kariyawasam complained that at least a 15-20 per cent reduction was expected in room rates from the existing ones.
Previously SLAITO had submitted a proposal for the lowering of minimum room rates but they continue to fall on deaf ears with no change in the stance of hoteliers, operators said.
In fact, Mr. Kariyawasan explained that tourists were able to grab superior products and services offered in Malaysia and Indonesia at the same price as Sri Lanka.
“If we don’t take remedial action it could affect occupancies in the future this year,” he said.
Currently, the industry is concentrating on markets like China and Korea to bring in the numbers but even the latter was said to have complained of the high room rates in Sri Lanka.
SLAITO observed that the continuous perception that the war is over and it could bring in the tourists would not hold good anymore.
In fact, Mr. Kariyawasan points out that in the first two years after the war they were able to take up that campaign, but today it was not possible as it is “difficult to maintain the momentum.”
On the other hand, he asserted that an aggressive strategy was required to attract more tourists while at the same time commending the promotional campaigns underway in this regard as well by Sri Lanka Tourism.
However, hoteliers believe that the existing minimum room rates in the Colombo city hotels was holding good for the sector.
In fact, they dismissed the issue of pricing as a constant complaint by tour operators since the day the rates were made effective.
“It (minimum rates) should stay because it’s very beneficial to the staff and other stakeholders,” City Hoteliers Association President K. Shanthikumar said.
Commenting on the rates further he explained that city hotels only catered to 15-20 per cent of the leisure sector whereas the rest was focussed on the airline crews, shipping sector, MICE travellers and corporate clients.
John Keells Vice President Vasantha Leelananda said their organisation was for the minimum prices as they believe it had done much to improve the city hotel rates.
| SLAITO surveys Sri Lanka’s hotels
Following a survey carried out by SLAITO last year titled “Concerning issues in the Tourism Industry which can hamper the potential for growth that the country deserves and effect sustainability” the association has recommended that the authorities should not simply focus on the high end or higher yielding market segment but should ensure that rates were looked into. It was pointed out that grabbing the high end market was ideal but needed to be achieved gradually and it could not be achieved overnight. It was pointed out that at present Sri Lanka’s majority tourism product was unable to reach this high end market and that high prices would only cause a barrage of complaints since the service was not of the same expectation as the price. Ensuring the home stay segment was catered to, was imperative since today’s backpackers comprising mostly University students would be tomorrow’s professionals. The survey also called for a withdrawal of the minimum rates regulation in city hotels in a bid to maintain a competitive edge.
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