Sri Lanka cheaper place to holiday than the rest
Sri Lanka has become one of the cheapest destinations in the region as a result of the stiff competition among hoteliers to cut rates and attract more tourists as the country is seeing a surge in arrivals since the industry was hit by the COVID-19 pandemic for the past three years.
“Sri Lanka is right now a cheap destination,” Hoteliers Association President M. Shanthikumar told the Business Times on Thursday.
As arrivals are on the rise stiff competition is evident as hotels particularly in Colombo are selling at rates below the cost of operations, he said.
It was pointed out that by reducing the rate, stakeholders are losing and on the whole the country is also losing.
Due to lack of demand the rates are getting diluted, Mr. Shanthikumar said and the rates charged are very much lower with Colombo hotels fetching rates below the resorts as well.
Hotels are facing concerns with the increased electricity tariff hike of more than 60 per cent with the revenue said to be much lower than last year.
With wages increasing from 40-50 per cent, costs have increased and turnover is very high and hoteliers are struggling to retain and recruit new employees.
Sri Lankan hotels have not carried out renovations or refurbishments in the past couple of years as a result of the tight monetary conditions.
In fact the hotels are still facing tough times with the banks as they have increased interest rates and want them to pay back their loans that were held back for the past few years as their moratoriums were repeatedly extended.
Selling rooms at cheap rates also might make tourists think again, Mr. Shanthikumar said noting that although tour operators and travel agents have an improved notion of the country’s situation the travellers are still unaware of the general condition due to lack of marketing.
Sri Lanka’s current figures are still below 2018 levels, he noted adding that that year should be the benchmark as opposed to trying to achieving improved numbers compared to 2022.
The destination is likely to take at least another one or two years’ time to come out of the current crisis and reach the pre-COVID levels, Mr. Shanthikumar said.
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