BPA says outlook on regional development positive

Brito concerned about disharmony in the tourism industry

Aitken Spence and Company Ltd is exploring the prospects of investing in high rise apartment complexes in the medium term.

“We might be getting into apartments on the land that the company already owns,” Rajan Brito, Deputy Chairman, Aitken Spence and Company Ltd told The Sunday Times FT.

He said the company has submitted proposals to build a hotel in the land near D.R. Wijewardena Mawatha to the government, but they have not heard anything since. “We have already submitted the proposals to build an up market hotel, but there is firm word from the government,” he explained, without giving details as to where the land for apartments was available.

He said Aitken Spence is bracing for a bad winter season this December. “There are many cancellations and December is going to be bad,” Brito added.

The group deputy chief said he was thoroughly disillusioned with disharmony in the industry. “They are not talking in a single voice. This disunity affects the entire industry,” he said.

He said the Tourism promotion Act, which took seven years to come up, is yet to be implemented. “This is a strong concern and at this point, it is important for the tourism industry to unite,” he added.

The company’s tourism sector, despite reporting impressive top line and operating profit growth, reported modest earnings post tax as a result of higher interest costs. “While revenue grew 77 percent and 70 percent to Rs.1,179 million and Rs. 2,112 for 2007 in the second and first quarters respectively, operating profits increased 313 percent and 251 percent to Rs.92 million and Rs.136 million,” a C T Smith Stockbrokers report said.

It further said that the company’s Maldivian operations out performed Sri Lanka, and posted a pre tax profit of Rs.144 million for 2007 first quarter while the Sri Lankan resorts reported a loss of Rs.202 million.

The report said that while inbound travellers to the Maldives have almost recovered to their pre-tsunami levels, Sri Lanka has lagged behind as the recent spate of violence related to the North and East conflict has adversely affected tourist arrivals. “Tourist arrivals to Sri Lanka decreased 12 percent to 38,485 persons in September 2006, the largest monthly percent decline since December 2005 and the lowest monthly arrivals figure reported since March 2005,” the report added.