Spence Hotels’ revenue grows 16% for 3Q2014
View(s):Aitken Spence Hotel Holdings (AHUN), Sri Lanka’s biggest hotel operator here and abroad, saw its revenue grew by nearly 16 per cent year on year (YoY) to Rs 3.4 billion in the third quarter of 2013/14.
“The South Asian sector, mainly consisting of the Maldivian properties shouldering 70 per cent of the quarterly turnover grew nearly 9 per cent YoY in the said quarter with the Sri Lankan sector showing a growth of 17 per cent YoY in its revenues in the quarter under review,” a TKS Securities report said.
With a total room capacity of over 2,000 spread across Sri Lanka, Maldives, India and Oman under the prestigious brands, Adaaran and Heritance, Aiken Spence is well positioned by investing in its properties ahead of its peers.
The report said that AHUN owns six, three to five star resorts under Heritance and Aitken Spence brands and manages three hotels in Sri Lanka whilst owning and operating five resorts in Maldives under the Adaaran brand.
AHUN’s operating costs have escalated slower than the revenue growth (up 11 per cent YoY) during the quarter under review mainly due to the slow growth in operating and interest costs in the South Asian sector (about 3 per cent YoY).
“In the light of the growing tourism industry, AHUN has taken prudential steps to grasp growth opportunities by expanding its resort portfolio, the report said, adding that in 2012 AHUN’s oldest property was refurbished and re-positioned as Heritance Mahagedara with an investment of Rs. 750 million. Thereafter FY13 saw “The Sands” and Hotel Hilltop being re-branded and refurbished. Further expansion in room capacity to nearly 200 is expected to follow at the existing 110 room “The Sands” and be ready by winter FY15.
It said that the Heritance Kandalama property underwent refurbishment in its Dambulla wing and also added a purpose-built convention facility at Rs. 250 million in the same wing in 4QFY13.
The brand new 145 room Heritance Negombo (formerly Browns Beach) is being constructed at Rs. 4.5 billion . “This new 5 star property when commissioned operations in mid-2014 would be the fifth resort in the Heritance range. AHUN would be infusing a substantial portion of the funds required as equity for the project,” the report said.
It said that AHUN’s major resort project in the southern coast of Sri Lanka, in the vicinity of its current Heritance Ahungalla property has been re-launched. AHUN together with Spanish owned RIU Hotels, as joint venture partners would be constructing a 500 room, 5 star luxury resort, at a cost of $100million, in which AHUN would take a majority stake whilst RIU has the remaining stake.
“For the medium term, in its Sri Lankan sub-segment, plans have been drawn to develop 100 acres of beach front property in Nilaveli owned by AHUN’s parent Aitken Spence with the aim of harnessing the tourism upbeat in the Eastern coastal area.”
Paving the way for more opportunities for AHUN in Maldives, last year the group formalised arrangements with the Maldivian Government to increase the buildable area ratio in each of the atolls , which would allow the group to better optimise available land resources in Maldives, according to the report.