Expectations of an increase in revenue for the country’s hospitality sector due to the Commonwealth Heads of Government Meeting (CHOGM) scheduled to be held in Sri Lanka this November have suffered a blow with a sharp decline in the expected number of visitors for the summit.
Sources from the tourism industry said that city hotels and hotels in Wadduwa had earlier been asked by the
Tourism Authority to reserve their rooms for delegates and visitors attending the CHOGM and affiliated events during the summit period.
The government which expected a big turnout for the CHOGM advised hotels in the immediate environs of the capital, especially in Wadduwa, to reserve rooms to accommodate the visitors who cannot be accommodated in city hotels.
However, The Sunday Leader learns that the government had informed the hotels in Wadduwa to release the rooms booked for the CHOGM since the expected number of visitors could easily be accommodated in city hotels.
This set back is expected to hit the hospitality sector that is currently faced with many issues.
The proposed electricity tariff revision and the 40 percent salary hike for hotel employees stipulated by the government have become a severe burden to the sector that has been trying hard to stay afloat.
Apart from these issues, the city hotels are faced with another problem with the call for a reduction in the minimum room rate.
President, City Hotels’ Association and Vice President, Tourist Hotels’ Association, M. Shanthikumar said that the proposed electricity tariff revision combined with the salary hike for hotel employees would be a severe burden on the hotel industry.
He observed that the proposed electricity tariff revision, where hotels are categorised under a super tariff system, is unfair and unjust.
As for the 40 percent salary increase for hotel employees, he explained that the actual salary increase would amount to around 30-32 percent when considering the minimum wage paid to the hotel employees.
When asked about the call for the reduction of the minimum room rate for city hotels, Shanthikumar pointed out that it was the introduction of the minimum room rate in 2009 that has helped city hotels to survive and maintain a decent balance sheet.
“The city hotels have as a result managed to pay dividends to stakeholders and staff,” he said.
According to Shanthikumar, the drop in occupancy that has affected the city hotels and beach hotels is due to the economic recession in many parts of the world, the issues in India and other contributory factors.
“The crimes committed against tourists in the country are also a minor contributor to the decline in occupancy levels. However it is not a major issue since such incidents happen in other parts of the world as well,” he noted.
He said that the industry has raised all these issues with the government and are waiting for a response.
Meanwhile, Shanthikumar added that the Tourism Ministry, the Tourist Board and other relevant institutions were engaged in carrying out promotions in emerging markets to promote Sri Lanka as a tourist destination.