The government has called on all star class hotels in the city to revise their room rates with effect from April 1 this year.
The government has reportedly instructed that the room rate be increased to US$ 125 from the current US$ 100.
In the event the room is sold at a lesser amount, a tax of US$ 20 is to be imposed on a bed.
City Hotels Association officials according to media reports have welcomed the new rates saying there was a high demand for rooms in the city hotels due to the increase in the tourist arrivals following the end of the war.
Sri Lanka currently offers the lowest room rates in the region and hoteliers have said that the increase in the room rates would not have an impact on the tourist arrivals.
The local media has reported that other increases would be US$ 95 from US$ 85 for a four star room, US$ 75 from US$ 70 for a three star, US$ 60 from US$ 55 for a two star and US$ 45 from US$ 40 for a single star room.