Sri Lanka hotels see "excellent" winter season

Mar 22, 2014 (LBO) - Sri Lanka's hotels have seen a good winter season with high occupancy levels, backed by stable pricing and strong arrivals from Western Europe, Russia and China, officials said.

"Occupancies have increased really," Jayantissa Kehelpannala, head of Sri Lanka's tourist hotels association said.
"Sometimes it is very difficult to even get a room. This season has been excellent."

The so-called winter season starts in the last quarter of the year and extends into the first quarter of the following year.

Last November however a state order to artificially push up pricing in the Colombo city coinciding with a Commonwealth summit meeting pushed down overall arrivals to the country.

A state dictated pricing floor on 5-star graded hotels has also drawn complaints from at least one hotel and travel agents for keeping tourists away.

In 2012 occupancy dropped in large hotels tracked by the state tourism promotion agency partly due to lower domestic tourists amid a balance of payments crisis which slowed economic activities.

The tourism promotion office then suppressed monthly occupancy numbers which have not been released for more than one year now.

Sri Lanka's hotel rates rose steeply after 2009, when a 30-year civil war ended generating a shortage of rooms amid renewed interest from travellers.
Director general of Sri Lanka's state tourism promotion office, D S Jayaweera said in the first two months of 2014 about 288,000 tourists had visited Sri Lanka, which was equal to the total annual arrivals of 2008.

Total earnings from tourism for the first two months of 2014 were estimated to 390 million US dollars, he said, compared to 390 million US dollars for the whole of 2008.

Kehelpannala said demand and supply had brought 'stability' to prices.

"I would not say prices came down," he said. "There was a stability that came into to the pricing."

In 2012 the Sri Lanka rupee fell to 130 to the US dollar from 110 to the US dollars after state intervention in energy pricing using bank credit ultimately accommodated by printed money led to a balance of payments crisis and collapse of the currency.

In such a situation, analysts say hotels could cut their dollar prices and still get equal or higher rupee revenues.

Sri Lanka is now also getting many customers from internet booking engines, which was absent before the end of the war.

Up to 25 percent off all bookings are now thought to come from internet bookings, Kehelpannala said.

"New markets have been opening up: Russia, Ukraine and the CIS countries," Kehelpannala said. "China is also seeing growth."

In the first two months of the 2014 arrivals from Russia surged 91.7 percent to 20,423 and Ukraine was up 13.7 percent to 11,327, according to official data.

Arrivals from Poland, a newly developing market was also up 56.7 percent to 4,451.

China on which state promotional efforts in particular has been focused, rose 119.2 percent to 21,098.

Arrivals from UK, the largest single generating market after India rose 9 percent to 27,212 and Germany rose 15.8 percent to 20,516 according to official data.

"The encouraging sign is that we have seen growth from the traditional markets also, like France and UK, Germany."

"I think with this kind of success that we had this winter hotels will look at putting their prices up."

http://www.lankabusinessonline.com/news/sri-lanka-hotels-see-excellent-winter-season/955826935