Hotels enjoying 45% growth in revenue

By Cheranka Mendis

In tandem with rising tourist arrivals in the country, the leisure industry is enjoying a 45% growth in city hotel revenue along with a 10% boost in average occupancy.

Colombo Tourist Hotels Association President M. Shanthikumar yesterday told the Daily FT that the year had so far been a good one for the industry, with overall occupancy and revenue increasing from previous years. The average occupancy rate in the island has increased by 25%.

 The tourism industry, which broke its target for the year by November this year, recording the arrivals of 758,458 persons, has left its mark positively in the hotel sector.

“We are hoping to touch 950,000 by the end of the year,” Shanthikumar said. This would mean an expectation of 191,542 arrivals within the month.

 “Riding on the very favourable trend in the tourism market, we think this number is an achievable one.”

There have been no complaints about the minimum room rate structure either, he said. “This is mainly because our key markets are corporate and MICE markets and not leisure sector for Colombo City hotels.”

As at now the minimum rate stands at US$ 125 plus applicable tax for five star hotels, US$ 95 plus applicable tax for four star hotels, US$ 75 plus applicable tax for three star hotels and US$ 55 plus applicable tax for two star hotels. The tax component is made up of VAT, service charge and TDA which amounts to a collective 27%, Shanthikumar said.

Predictions for next year look at an overall occupancy growth of 25%. He stated that 1,000 more rooms would be added to the countrywide room portfolio in 2012. “The future is looking bright. We are confident that the present trends will continue, making it a better year by far.”