Thursday Nov 28, 2024
Thursday Nov 28, 2024
Wednesday, 1 February 2023 00:30 - - {{hitsCtrl.values.hits}}
John Keells Holdings PLC (JKH) yesterday reiterated the need for authorities to expedite the launch of Sri Lanka’s much awaited global marketing campaign to revive tourism, a sector in which the diversified blue chip has extensive interests.
“Tourism will be a key catalyst to drive the recovery of the economy, particularly in the context of the positive impact it will have on foreign exchange earnings. In light of this, we continue to urge the tourism authorities to expedite the launch of Sri Lanka’s much awaited global marketing campaign, especially in our key source markets, particularly to address the perception and lack of awareness regarding the normal environment for tourists,” JKH Chairperson Krishan Balendra said in his review accompanying 3Q interim results.
He said it was encouraging to witness the gradual recovery in tourist arrivals to the country, where arrivals for 2022 crossed the 700,000 mark, with December 2022 recording the highest number of arrivals since the peak of the domestic economic crisis, although still significantly below pre-pandemic levels.
Driven by the Maldivian Resorts and Colombo Hotels segments, the leisure sector was the best performer in 3Q with its EBITDA improving by 54% to Rs. 1.9 billion. It grew by 785% to Rs. 4.7 billion in the first nine months. The high percentage growth is from a low base in the previous year.
JKH said the PBT of the leisure industry group was impacted by higher finance expenses due to the significant increase in interest rates on working capital facilities obtained and on account of the translation impact stemming from the amortisation of leases across the Maldivian Resorts given its US Dollar denomination.
The Maldivian Resorts segment continued its strong performance with occupancies averaging over 90%, supported by arrivals from both traditional and new source markets.
The Colombo Hotels recorded a strong performance in its restaurant and banqueting operations. Occupancies of the Colombo Hotels improved on the back of a gradual recovery in business travel. The Sri Lankan Resorts segment recorded an increase in occupancies during the quarter. Profitability in the Sri Lanka leisure businesses improved against the previous pandemic affected year although margins were under pressure given the rising input and utility costs and the limited revenue from foreign arrivals.
