Advocata Institute raises concerns over enforcing minimum room rates for hotels in Colombo


The Advocata Institute raised concerns about the policy by Sri Lankan authorities to enforce minimum room rates for hotels in Colombo starting from October 1st, 2023.

The gazetted rates are USD 100 for 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.

The Advocata Institute examined the policy and its impacts on the hotel sector in its latest policy brief available at While authorities argue this is to counter underpricing, Advocata Institute believes it could harm the tourism sector, burdening hotels already facing challenges from the global pandemic.

The policy is seen as a threat to competitiveness and unnecessary government intervention, potentially leading to customer dissatisfaction and loss of clients compared to neighboring countries.

Past attempts enforcing price controls were met with limited success, and the Advocata Institute argues that minimum rates restrict flexibility, hinder healthy competition, and disregard the diverse nature of accommodations.

The foundation for these rates, based on star classifications, is criticized for
overlooking qualitative aspects.

Advocata is an independent policy think tank based in Colombo, Sri Lanka.

We conduct research, provide commentary and hold events to promote sound policy ideas compatible with a free society in Sri Lanka.

Visit for more information.

Advocata spokesmen are available for live and pre-recorded broadcast interviews via +94778951491

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