Cinnamon city hotels may see tough time ahead
View(s):Asian Hotels & Properties PLC (AHPL), the owners and operators of the two city hotels – Cinnamon Grand and Cinnamon Lakeside may have a tough time with competition during the coming years, analysts say.
Hotels sector analysts say that these two hotels have been hit badly by new entrants, Shangri-La and Moevenpick. Cinnamon Grand has had a larger impact as its directly competing with some of the hotels in terms of room revenue, they say.
AHPL, under which the 501-room Cinnamon Grand, Colombo and the 346-room Cinnamon Lakeside comes reported Rs. 2. 2 billion revenue for the quarter ended March (4Q18), down 6 per cent year-on-year (YoY).
Looking forward, there’s a steady inventory of hotels coming in, in the next few years which will toughen the business of these two hotels, the analysts say. The ITC with approximately 300 rooms and Sheraton with 306 rooms will most likely come online in 2019, which increases the competition. “This means that both hotels, especially Cinnamon Grand would have to offer more competitive pricing to attract and maintain occupancy and Food and Beverage (F&B) revenue,” an analyst noted.
On the F&B side, the novelty factor plays a major role – for weddings and MICE and people generally prefer the ‘new’ location in town, given that there is a steady supply of ‘new’ properties coming in, he added.