ECONOMYNEXT – Sri Lanka has lost Meetings, Incentive Travel and Exhibition travelers to competitors in East Asia and India due to minimum room rates as higher standard rooms were available in other countries at lower prices, industry officials said.
President of the Sri Lanka Association of Inbound Tourist (SLAITO) Nishad Wijetunga said they the industry managed to retain a majority of booking made before the minimum room rates were imposed by the state last year.
“However, there were MICE groups that were supposed to come and cancelled Sri Lanka and went to places like Thailand and other parts of India and we lost,” Wijetunga said.
“We know that large groups of MICE (tourists) are affected.”
India is a key source of MICE tourists to Sri Lanka.
Sri Lanka’s businesses have got used to protectionism and try to push up prices with import taxes to extract more money from customers using the coercive power of the state, with tiles and steel being among the most prominent examples.
RELATED: Stand-alone hotels unviable in Sri Lanka due to high construction, capital costs
High priced tiles and steel in turn makes hotels expensive to build and make the leisure industry less competitive, analysts say.
However, in tourism, unlike in building materials customers are not trapped within the country and are free to move to other markets.
Managing Director of CEC Events and Travels, Imran Hassan, said the industry lost groups to East Asia due to minimum room rate.
In one instance, an operator was in discussions to get a group of 900 passengers.
“And that moved out to Thailand,” Hassan said. “Like that, there are many instances that the minimum room rate was not conducive.”
Thailand in 2023 attracted 28.04 million tourists.
A group that used to come to Sri Lanka annually used to take 40 to 50 five-star hotel rooms. This time Sri Lanka competed by offering lower standard.
“This year, they’re only giving 10 rooms to the five-star hotels,” Hassan explained. “They are staying in smaller hotels because they can’t afford it because it has become so expensive.”
“But overall, we are working with the authorities to correct it.
“We don’t mind demand and supply situation taking the rates up as in the Maldives. But what we are saying is keep an open market.”
RELATED : Sri Lanka should say good bye to minimum room rates: President
President Ranil Wickremesinghe has said Sri Lanka cannot progress with protectionism and the country has to learn to face competition. (Colombo/Mar04/2024)