Business Times

Tourism zooms in February

Considerable overbooking in resort areas have forced hotels to suspend forward sales for the next few months as tourist arrivals for February 2010 reached a high of 57,300, surpassing February 2009 arrivals by a resounding 67.7%, officials said.

The Tourist Hotels Association of Sri Lanka (THASL) noted that while February has always been the peak month of the tourism calendar in Sri Lanka, it is not only the increase in numbers this year but also the relative increase in yields that is noteworthy. In a press release, THASL President Srilala Miththapala said hoteliers had to resort to discounting to fill their rooms during previous years but not so in 2010. He added that earnings from tourism should also show a health increase.

Several hotels reported 100% occupancy levels for the month while resorts in the Negombo area had the highest overall occupancies of close to 90%. Most of the other areas also recorded high occupancy levels. All markets have also shown healthy increases for February 2010 with Western Europe up by 71.7% and the Middle East up by 127.4% year on year. Similarly, the East Asian market has also increased by 93.7% year on year with South Asia up by 66.6%. Mr. Miththapala said 2010, as expected, has gotten off to a flying start with the first two months having 108,057 arrivals compared to 72,637 for the same period in 2009, a 49% increase.

In preparation for the next winter season which is expected to be very good, several hotels have already planned refurbishing activities during the forthcoming summer months from May to October 2010. Information collected by THASL indicates that close to 1,000 rooms will be temporarily ‘out of stock’ due to refurbishing/upgrading activities in several leading resort hotels.

In the Negombo region alone, the THASL said there will be refurbishing activities in Club Hotel Dolphin, Blue Oceanic Hotel, Sea Shells Hotel and Goldi Sands Hotel. Other hotels undergoing various forms of upgrading/refurbishing are Airport Garden, Taj Exotica, The Blue Water, Cinnamon Grand, Mount Lavinia, Club Oceanic, Palm Garden, Riverina, Coral Sands, Hotel Sigiriya, Cinnamon Lodge, Berjaya and Saman Villas.

It is estimated that close upon Rs.3 billion will be spent on refurbishing and upgrading the product according to the survey. The THASL described these activities as a ‘very good sign’, adding that over the years, the Sri Lankan hotel product has lost out to its regional competition due to being in ‘survival mode’ and a lack of surplus cash for refurbishing.

With price revisions in the offing it is imperative that the product offering is improved to guard against the destination losing its ‘value for money’ proposition. The THASL also stated that it is noteworthy that it is mostly the larger hotels that are taking this initiative. With much larger stakes in the industry and more corporate muscle, they have better access to capital than most of the SME sector. The SME sector comprises almost 60% or more of the THASL membership and it is this sector that needs urgent support right now.

The THASL is urging the government to come out with an urgent short term plan to help refurbishing of hotels by way of incentives, including duty free imports of capital items for refurbishing and also some form of preferential interest bearing loans for the SME sector.

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