The minimum room rate introduced for Colombo City hotels by Sri Lanka is a regulation that is highly unwarranted, said General Manager of Hilton Colombo, Mahesh Fernando.
Speaking to Daily News Business at the hotel’s 30th anniversary celebrations, he said that they don’t want any authority dictating terms to them.
“Why do you need ‘somebody’ to tell us what to do with our room raters? Let the market sources (demand and supply) decide that,” he said.
Fernando, with hotel experience for nearly two decades and having worked all over the world for top brands, said that in most other countries this is not the case.
“This is the reason why successful tourism destinations like Thailand, Bali or Singapore don’t have a minimum room rate criterion. Imagine what would happen if a country like the Maldives which sells resorts from US$ 180 to US$ 2,000 decides to implement a minimum room rate?” he asked.
“This is rubbish and is killing the industry and indirectly depriving revenue to Colombo City hotels as well.”
“I think its high time that ‘minimum room rate concept’ disappears,” the Hilton Colombo GM said.
Asked what would happen if a similar class of hotels undercuts the hotel’s room rates, he said, “Let that happen, we are not worried. Our business would still be there. Guests who value brands and our service would still come to us.”
Asked to comment on the competition, he said that Colombo Hilton has been in the city for three decades and they don’t see it as a threat.
On forward bookings, he said they are very positive. “We also see a lot of Sri Lankan expats and their families coming and staying with us, especially towards the end of the year.”
He also said that the hotel is now making profits despite an ongoing renovations and payback of some dues. When the renovations are completed by November, the hotel would have 50 suites in an inventory of 380 rooms,” GM Fernando said.
“With the growth of Sri Lanka tourism and seven new Hilton hotels to be added in Sri Lanka from next year, we are very optimistic of the future.”
Commenting on the discouraging of hoteliers to build tall structures on beachfronts, he said that too is a drawback to the industry.
“Yes, there are areas that should be left for people to enjoy the scenic beauty. But why not other areas?” he asked. He said for a major brand to come in they need to have more rooms and for this they have to build high rises.
“The cost to build two hotels with lower floors to have around 250 rooms is expensive as one has to find more land. Hence they should be allowed to build at least 15 floors. I think Marriott Weligama has done the right thing to build high.”
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