Tourism Minister Harin Fernando has indicated that the recently reintroduced Minimum Room Rate (MRR) for hotels in Colombo will not be in place for an extended period of time. Instead, the industry is expected to operate based on market forces. Fernando acknowledged President Ranil Wickremesinghe’s desire to remove the MRR and stated that the policy was implemented temporarily until the market stabilized. He emphasized that there were no concrete plans for the MRR to continue for a prolonged duration.
During his address to the parliament, Fernando justified the implementation of the MRR by explaining that it provided some relief to the hotel sector in managing expenses. He highlighted the challenges faced by hotels in retaining staff and the need to continue the service charge. Additionally, with the end of the moratorium approaching, hotels had to start repaying their loans. These factors influenced the decision to increase the MRR after consulting with the hotels association.
Fernando noted that since the implementation of the MRR on October 1, revenues have increased by 25 percent. However, he admitted that occupancy in Colombo city hotels has decreased by 16 percent during the same period. He emphasized the need for a balanced approach in this regard.
The Minister emphasized that Sri Lanka should not compare itself to countries like Malaysia and Thailand, as Sri Lanka has a limited number of hotel rooms. He reiterated that the MRR was reintroduced to bring stability to the industry for a short period of time.
Meanwhile, two lawsuits have been filed against the Sri Lanka Tourism Development Authority (SLTDA) and the Ministry of Tourism regarding the MRR. The Supreme Court has commenced hearings on these cases, with the next session scheduled for Monday (11).
