The proposed minimum room rates seek to place a rate of USD 100 on 5 star hotels, USD 75 for 4 star hotels, USD 50 for 3 star hotels, USD 35 for 2 star hotels, and USD 20 for 1 star hotels within the city of Colombo, effective from October 1, 2023. This will, in effect, act as a price control, ensuring that hotels within these star classifications located within the city of Colombo cannot price their rooms at rates lower than those prescribed by the government. The below policy brief will explore the dynamics of the hotel industry and provide a critical analysis of the potential consequences and challenges of implementing this scheme. By critically evaluating these effects, we aim to provide policymakers and stakeholders with a holistic perspective to inform their decisions.
Here is a link to Advocata’s Policy Brief on Sri Lanka’s Minimum Room Rates
