Serendib Hotels...

In September 2017, Hemas leisure sector forayed into boutique villas by acquiring 445, 668 ordinary shares or 51.5 percent stake of Frontier Capital Lanka Pvt Ltd for Rs.309.5 million in a debt-funded deal.

According to Serendib Hotels, there is a visibly increasing trend towards the emerging traveler exploring varying options of accommodation and this has prompted the group entering into the luxury villa space.

Lantern Beach Collection has three boutique villas and a spa in Mirissa, Weligama and Unawatuna.

Since acquisition, the villas are managed by Serendib Leisure Management Limited, a fully owned subsidiary of Serendib Hotels under a hotel management agreement between the parties.

The acquisition of Lantern Boutique Collection enabled the group to increase its overall ‘Revenue per average room night’ by 30 percent to Rs.7,500 in the December quarter (3Q18) from Rs.5,783 in the corresponding quarter in 2016 (3Q17), said Malinga Arsakularatne, the Managing Director of the Leisure, Travel and Aviation group of Hemas Holdings.

During the three months ended in December 31, 2017 (3Q18), the Serendib Hotels’ group revenues rose by 12 percent year-on-year (YOY) to Rs.487.1 million of which Rs.40 million came from Lantern Beach Collection, with an occupancy rate of 57 percent.

Hemas Leisure performance is challenged by the fast growing informal sector and the new hotel inventory.

For the quarter, Serendib Hotels group which owns and operates four properties— AVANI Bentota Resort & Spa, Club Hotel Dolphin Waikkal, Hotel Sigiriya and the Lantern Beach Collection Mirissa— reported earnings of Rs.16.6 million, down 50 percent YOY. The group now has a total room inventory of 436 keys. “Jada Resorts & Spa (Pvt) Ltd, the owning company of AVANI Kalutara Resort is treated as an investment. Hence, the operating results of AVANI Kalutara are not reflected in the Consolidated Financial Statements of Serendib Hotels PLC”, Arsakularatne said in an earnings release.

The performance was impacted by the lower occupancy, decline in room rates, higher administrative expenses and finance cost, which partly resulted from the borrowings made to acquire Lantern Beach Collection.