Room rates under pressure with possible opening of new hotels, Serendib Hotels
View(s):The room rates will be under pressure with possible opening of new hotels in the coming year, according to Serendib Hotels PLC.
In his statement on the interim results for the fourth quarter of the financial year 2016, Ranil de Silva, Managing Director Serendib Hotels PLC (Serendib) has said that guest arrivals to the country for the fourth quarter of the financial year (1st quarter of the calendar year 2016) was 585,000, a growth of 22 per cent over the previous comparable quarter. “The main reason for this growth was the performance of the traditional Western European market which contributed to 35 per cent of the arrivals during this quarter. However, the lower yielding markets such as India (85, 000) and China (77,000) continued to dominate the top positions as the key source markets for visitors to Sri Lanka,” he has said.
Serendib Leisure Hotels performed creditably during this period with an average quarterly occupancy of 89 per cent, which finally resulted in an annual average of 79 per cent for all hotels in 2015/16; an increase of 2 percentage points over the previous financial year, Mr. de Silva has said that Serendib Group hotel, Club Hotel Dolphin achieved a year round occupancy of 83 per cent, whilst other subsidiary hotels, AVANI Bentota (74 per cent) and Hotel Sigiriya (76 per cent) also contributed to this impressive occupancy ratio for the financial year under review.
“Supported by the depreciation of the Sri Lankan Rupee in the recent past, room rates too recorded an increase of 9 per cent for the final quarter which resulted in an overall improvement in RevPar (Revenue per available Room) of 5 per cent for the year 2015/16,” he has said.
Group revenue increased by 15 per cent from last year to record a turnover of Rs.610 million for the final quarter of 2015/16 spurred by strong performances from AVANI Bentota (16 per cent growth) and Hotel Sigiriya (18 per cent growth). This resulted in a cumulative growth of 12 per cent for the current financial year to record a revenue of Rs. 1,768 million. In addition to the increase in occupancy as noted above, a key reason for the positive RevPar growth in company hotels was the significant improvement in the contribution from the higher yielding Web Channels. The revenue contribution from this channel at Hotel Sigiriya was 41 per cent (27 per cent in the previous year-PY) and 28 per cent (24 per cent in PY) at AVANI Bentota. Group profit before tax for the quarter ended 31st March 2016 was Rs.230 million, which was an 8 per cent growth in comparison to the previous year.
Profit before tax for the financial year ended 31 March 2016 was Rs. 364 million, an increase of 11 per cent over the previous financial year. Dolphin Hotels PLC recorded the highest profit of Rs. 208 million due mainly to its larger room inventory and the high year round occupancy rates, Mr. de Silva has said.
“However, both Serendib Hotels PLC (Avani Bentota) and Hotel Sigiriya too performed strongly recording the highest ever profit in the respective properties with growth rates of over 30 per cent. Group results were adversely affected by the related share of loss from our associate company Jada Resorts & Spa (Pvt) Ltd of Rs. 21.3 million. The profit before accounting for the share of results from the associate company was Rs. 385 million, a growth of 19 per cent over 2015/16.”
According to him, the loss recorded at Jada Resorts is mainly due to Rs. 50 million being pre-opening expenses in connection with the new Anantara Hotel which is due to open in July 2016 and an unrealised loss of Rs. 34 million arising from the revaluation of the foreign currency loans availed from lending institutions for the construction of the said hotel.”