Mahaweli Reach faces low leisure, MICE traffic
View(s):Mahaweli Reach Hotels profits plunged to Rs.37.6 million due to the lower occupancies and the dip in MICE traffic as well.
The company has recorded a profit after tax of Rs.37.6 million for the financial year 2013/2014. Lower occupancy, higher costs of goods, energy, construction and wages have had an impact on results, Mahaweli Reach Hotels Chairman M.U. Maniku said in releasing the financial results. This is a significant dip compared to the previous year’s figure of Rs.42.6 million in profit after tax.
Lower occupancy and the arrival of more price-conscious travellers who appear to be seeking a different experience to the conventional tourism product have caused downward pressure on applicable room rates due to increased competition among hotels, it was stated. Hotel occupancy had dropped from 61 per cent in 2012/13 to 60 per cent in 2013/14, the report stated.
Mahaweli Reach too has experienced the detrimental effect on results as it has been compelled to revise rates constantly. As a result of this the negative impact of these factors is witnessed in the year on year decline in occupancy and profit margins from the previous year.
Efforts have been made to mitigate the effects of these issues through cost-cutting measures and innovative promotions, the report stated. In addition, the increasing number of banquet and reception halls in the Central region which are offering bargain rates that are difficult for a hotel to match due to overheads and associated costs have also lead to a decline in the income generated from this sector in addition to which, the issues of accessibility has affected the conferences sector.
In the meantime, the hotel has been carrying out refurbishments in the wake of increased competition faced from new properties through generated funds, thereby managing the finance cost, Mr. Maniku stated. Moreover, the hotel is currently available on the web since most travellers would book online and as most tourists now look at the web before making travel plans, it was stated.
Despite the high incidence of tourist traffic to the country most star class hotels have been feeling the pinch in terms of occupancies compared to previous year due to the increasing availability of alternate accommodation like homestays which is no different in Kandy, Mr. Maniku explained.
He also noted that promoting the country was vital and in this respect targeted marketing was expected to have a positive impact. In this regard, Kandy and the Central region was said to have to contend with greater obstacles as well due to its inaccessibility. Initiatives to market this region as a destination in its own right are hindered due to a lack of varied attractions and extended travel times, it was stated adding that though this was highlighted in the past as well no new projects have been established in a bid to create greater attractiveness of the region.
In this regard, the proposed Kandy highway is anticipated to increase the attractiveness of this destination over time, the chairman stated.