Hotel minimum rates to be abolished next year

The minimum room rates imposed on city hotels will be abolished with the end of the next winter season.

Tourism Development, Lands and Christian Religious Affairs Minister John Amaratunga has decided to abolish the minimum room rate regime from March 31, 2017.

This decision was taken by the Minister based on a recommendation of the Tourism Advisory Council which comprises key players in the hotel and travel trade. The Council was of the view it that was time to do away with minimum rates as it has “now served its purpose.”

Convener of the Tourism Advisory Council, Felix Rodrigo said the Council had arrived at a unanimous decision to recommend to the Minister to abolish minimum room rates as soon as possible.”

The Tourism Advisory Council was appointed by Minister John Amaratunga to advise him on issues facing the tourism industry and is chaired by business tycoon Harry Jayawardena. The Gazetted minimum rates are applicable to all star-class hotels ranging from one to five stars in the Colombo city limits.

Minister Amaratunga considering the forward contracts already entered into by many hotels decided to abolish the minimum rates with the end of the next winter season. “We need to respect the contracts already entered into for the coming season which is why it will be abolished from end March 2017,” said Minister Amaratunga. “Almost all the hotels have been calling for the abolition of the minimum room rates and to allow market forces to decide prices. By sticking to the minimum rates we have been pricing ourselves out of the lucrative MICE market and losing out to our regional competitors,” said Minister Amaratunga.