A knowledgeable industry spokesman said yesterday that Sri Lanka hotels seem to be over-pricing with its off-season rates too high compared to competing destinations like Thailand, Malaysia and Indonesia offering a better product at the price.
``The occupancies of the Sri Lankan resorts were below expectation,’’ Ratnayake said in his review. ``However, this fall was compensated to a certain extent by higher average room rates.’’
``We continue to reiterate the need for a concerted marketing campaign to create greater awareness of the destination to support to support the medium to long term sustainability of the industry,’’ he added.
Poor off-season occupancy has also raised concern about an `over-banked’ situation with many new hotels being built both in the city and in the resorts and room capacity being heavily expanded.
JKH’s first quarter results were excellent with the attributable profit up 34% to Rs. 1.24 billion from the comparable period a year earlier and first quarter revenue up 26% to Rs. 20.1 billion.
``Although the performance of the group in the first quarter is encouraging, its sustenance in the immediate future will be challenging as the increased input costs emanating mainly from the impact of the depreciation of the rupee, higher duties and tariffs on imported items and the increased fuel and electricity tariffs begin to take effect,’’ Ratnayake said.
He announced that a ``variety of steps and measures’’ had been taken to mitigate these impacts.
JKH’s Transportation and leisure groups had done well in the first quarter with transportation growing profit before tax (PBT) 33% to Rs. 957 million with growth primarily driven by the bunkering business. Leisure had grown PBT 73% to Rs. 648 million with the city hotels and the Maldivian resorts being the main drivers.
In the property segment, the Rs. 65 million PBT was down 24% from a year earlier. The new OnThree20 development project was on schedule with 30% of the work done and construction started on building a mall at Kapuwatte, Jaela.
Consumer food and retail had increased PBT 92% to Rs. 393 million with the ice cream business growing volumes but fizzy drink volumes flat with no little or no real growth seen in the sector.