The Hotels and Travels (H&T) sector in the Colombo share market has seen a 475% growth in the 12 months to December 2009, which according to stock market analysts is a start of ‘more good things to come’ in the leisure segment.
“The H&T sector in Sri Lanka had been performing well below its true potential during the last few years mainly due to the adverse security situation. With the eradication of terrorism in the island, there is sustainable peace spurring many foreign nations to consider the removal of the negative travel advisory to Sri Lanka which was a major challenge for the tourism industry. These positive improvements have bolstered the tourist arrivals to the country resulting in a 667% growth in the share market during the December quarter in 2009 compared to the same period in the year before,” an analyst told the Business Times.
Large corporates are seen getting into the fray to exploit the potential in this sector – the latest being Hayleys which bought Ceylon continental’s majority 51% last Friday. Aitken Spence Holdings and the John Keells along with Jetwing Hotels and a myriad of other small operators are scouting for opportunities in this sector. Lanka Hospitals Corporation (formerly Apollo) is focusing on medical tourism, according to top officials.
Due to increased tourist arrivals to Sri Lanka the leisure sector will see large earnings. “This will improve earnings in the leisure and diversified sectors,” Nalin Karunatileka, Vice President Corporate Finance, Acuity Partners said. The year on year growth in H&T sector was 475% last year compared to 2008.
“Hotels situated in Colombo city limits will perform firstly due to business clients while the outstation hotels are expected to perform from the middle of the year from tourist arrivals,” Mr. Karunatileka noted.
The earlier analyst noted that counters such as Asian Hotels and Properties, Trans Asia PLC, Aitken Spence Hotels Holdings and Keells Hotels Holdings would be the most benefiting counters in the market. |
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