JKH mulls more hotel investments overseas
View(s):As John Keells Holdings (JKH) celebrates its 150th anniversary in 2020, the group is not looking at any grand ceremony to mark this significant milestone for Sri Lanka’s largest, 14,000-strong listed conglomerate. However on the business side the organisation is setting its sights on investing and managing more hotel properties overseas (outside the Maldives) while focusing on the environment and expanding solar power use across its businesses.
“We are looking for investment opportunities in hotels in other countries. I cannot say where, but we are looking,” Group chairman Krishan Balendra told the Business Times in an interview, when asked about expanding the company’s portfolio of hotels.
Speaking on the group’s focus this year, he said they want to convert as many of their supermarkets as possible to solar. So far 53 are solar powered while seven more would come on stream by end January. The company has 106 supermarkets with 25-30 more to be opened this year. “We are also hoping to convert to glass bottles from plastic bottles in all our hotels as this year’s commitment around the environment,” he said.
Reflecting on the beginnings of the company, he said Edwin John moved to Sri Lanka (then Ceylon) from the UK in 1870 and set up with his brother a produce broking firm. Then in 1878 he set up his own company called E. John and Co. They continued as tea, rubber and even did coffee broking. In the 1960s, they bought Keell and Waldock and the merged entity became John Keells PLC. The group started diversifying acquiring Mackinnons and Walkers Tours, going into shipping and as a travel business and later got into hotels. For the record the 150- room iconic Bentota Beach hotel was re-opened on Thursday as Cinnamon Bentota Beach after a 4.5 billion-rupee facelift which included building two new wings.
Keells Food Products started in the 1980s while Keells Supermarkets came on board in 1990. With the Whittalls takeover, JKH owns Elephant House which is a big business today.
Reflecting on this year’s events to mark the anniversary, Mr. Balendra said he spoke to the staff, the company distributed a video on the milestone and also distributed tee shirts to employees. “We have launched a ‘myjkh150promise’ where all the staff makes a commitment to a good cause, like reduce the use of plastic (lots of comments on that) and put it with a hashtag and then they put it on their social media or FB, Twitter or Instagram. With a hashtag, we can collate it centrally and it would result in a powerful message from our employees,” he explained.
On the business side, this year is becoming eventful for the organisation. The group’s flagship Cinnamon Life will open its office and apartment towers by mid-2020 while the 800-room hotel and mall will be ready by 2Q 2021. “We have sold about 65 per cent of apartments while we will start marketing the office space soon,” he said adding that the 24 floors of office space make up a total of 240,000 sq feet.
The company plans to sell 10 floors of which four have already been sold and lease the balance. The hotel will have five ballrooms, the first facility in Sri Lanka with a combined capacity to host big events with 2000 people. “We hope to market this in India for big outbound conferences,” he said.
Mr. Balendra agreed that there is currently an oversupply of hotel rooms in Colombo. “However if tourism grows at 10-15 per cent in the next 3-4 years this capacity will be absorbed. Even with all the new rooms, Colombo will have 6-7,000 rooms and when comparing that with Kuala Lumpur (40,000 rooms), Bangkok (60,000 rooms) and Jakarta (30,000 rooms), that is not much,” he said noting that because there hadn’t been investment for 25 (war) years the new rooms came together. “But we are confident that this new inventory can get absorbed,” he added.
In the Maldives, JKH’s fourth (new) property will be opening this year while a large distribution centre for John Keells Logistics with 250,000 sq ft of space at Muthurajawella will be opening in October 2020.
“It’s important that Colombo becomes more vibrant … now with new malls coming in and with more ballroom space we should be able to attract the crowd that previously didn’t come to Colombo,” he said, adding that business sentiment has improved and the end of the Parliamentary poll will further improve sentiment.
(Feizal)