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Shangri-La Hambantota resort books Rs 1.2b loss since opening
Hong Kong-listed hotels operator, Shangri-La Asia, which opened the 300-room Shangri-La Hambantota Resort & Spa in June last year, booked a loss of US$7.9 million (Rs 1.2 billion) from the hotel as a result of start-up costs, high depreciation charges and exchange losses on US dollar bank borrowings.
Shangri-La Asia has a 90% equity interest in Shangri-La Hambantota Resort & Spa. The resort registered an average room rate of US$134 (Rs 20,359) and an occupancy of 32% since opening in June, 2016, the hotel group reported last week. Sales came in at US$4.4 million for the financial year ended December 31, 2016.
At Hambantota, the opening packages in June 2016, included a US$247 a night deal for two. Room rates at the time were set at US$216, single or double, including breakfast.
The average room rate at the Shangri-La Hambantota Resort & Spa is higher than in Malaysia (US$123) and in China (US$122). In Hong Kong, the average room rate is US$300.
The rupee depreciated by 7.1% against the US dollar during the period, while the Chinese currency, the yuan, fell by 6.2%.
The 90-percent owned 500-room Shangri-La Hotel in Colombo, which is part of a composite real estate development, is expected to open later this year. It offers 41 apartments. The composite real estate development, which includes residential, office, and commercial space is expected to open in late 2018.
Shangri-La Asia also reported on Thursday that group profit for 2016 dropped by more than 24% to US$106.1 million compared with US$140.1 million the year before.
Group sales for the year ended December 31, 2016, dropped by US$67.2 million or 3%, to US$2.05 billion, compared with US$2.12 billion for 2015. The drop in sales was mainly attributed to local currency depreciation against the greenback.
The company’s hotels in China also booked a loss of US$12.5 million in 2016, compared with the loss of US$55.8 million in 2015. Shangri-La hotels in Hong Kong reported US$58.3 million income, down by US$4.4 million, the company reported.
Earnings per share were 23 Hong Kong cents compared with 30 Hong Kong cents in 2015.
The hotel company operates five different brands, the five-star Shangri-La Hotels, Shangri-La Resorts offering holiday experiences in exotic destinations, five-star Kerry Hotels featuring contemporary design, and Hotel Jen, which caters to independent business and leisure travellers. It also operates the Traders Hotels, the four-star business hotels for leisure travellers.
Shangri-La Asia recommended a final dividend of 8 Hong Kong cents per share for 2016 compared with 5 Hong Kong cents per share in 2015. With the interim dividend of 5 HK cents per share paid in October 2016, the total dividend for 2016 is 13 HK cents per share.
Shangri-La Asia owns 76 hotels.