Hotels hungry for cash flow
View(s):City hotels in Sri Lanka’s capital Colombo are feeling the pinch of a dearth of tourists as hotels in desperation to generate cash flow are selling rooms at rock bottom prices and dependant on their food and beverage sales.
In a desperate bid to generate cash flow, hotels are selling rooms as low as Rs.5000 -6000 (per night) with about 95 per cent of the rooms shut down in all hotels in the city as there are no tourists visiting the country, City Hotels Association President M. Shanthikumar told the Business Times on Wednesday.
Foreign tourists have not been visiting the country since March this year and there has been a dearth of travellers, leaving hotels without any guests and catering to low-priced demand from domestic travellers.He explained that city hotels are kept open for food and beverage and the resorts are getting Sri Lankans during the weekends.
Most of the smaller hotels have almost shut down their operations, he pointed out noting that “hotels are hungry for cash flow.”
Mr. Shanthikumar said they had held discussions with the Central Bank on August 6 where the request was made for a moratorium on their loans in addition to the issuance of loan for payment of wages. “They took it very positively and we are awaiting their final confirmation.”
City hotels are facing a cash crunch as “hardly anyone is coming in” and in time to come since the cash flow does not permit to pay wages hoteliers will be compelled to pay the loans and the interest and ask staff to stay home, Mr. Shanthikumar said.
At present about 50 per cent of the staff are at home, he said adding that they are paid only 40-50 per cent of wages until the hotels get the wage support loan. To date no hotels have received the wage support loan. Some of the staff is at home without wages as well while all casual, contract and temporary workers are laid off.
Galle Face Hotel Vice President Anura Lokuhetty told the Business Times that “we are doing quite well with food and beverage and banquet” adding that they are maintaining the regulations and look forward to people coming out.
However, he pointed out “we are not out of the woods as the rates are insufficient to keep the hotel infrastructure running.”
As a result of credit card discounts hotels remain attractive for local clients to patronize them. “I don’t think hotels can reduce much – right now it’s a matter of survival since this time it is something we don’t know yet when it will turn around.”
Mr. Lokuhetty noted that there is only about 5 per cent occupancy on slashed rates mostly for Sri Lankans.
Hayleys Leisure Managing Director Rohan Kaar said all their resorts are depending on domestic tourists on weekends although “it’s not really a game changer because of the slashed rates.” It hardly covers the costs, he said.
In the city however, the Kingsbury is purely dependant on F&B and weddings and hardly any accommodation, he said and in this respect they are trying to reduce losses but rooms have not been shut down. About two to three rooms per night would be occupied, he said.
They are also engaged in more restaurant business and have established a delivery app to send food that has helped generate more business in addition to a laundry pickup and delivery service as well, Mr. Kaar said.
“Light at the end of the tunnel seems far far away,” he noted.
(SD)