Amaya faces stiff room rate competition

Sri Lanka's Amaya Group has incurred losses due to the intense competition on room rates and other overheads, the company said this week in its results' announcement.

Profit after tax was down by 52 per cent to Rs.180 million compared to the previous year's profits at Rs.376 million.

Company Chairman A.M. Pandithage has stated that the Amaya Group faced pressures on the average room rates due to intense competition, and rising overheads, the Amaya chain of hotels (excluding Amaya Beach) recorded a profit before tax of Rs.373 million as against Rs.418 during the last year, a decline of 10.8 per cent.

The new addition to the Amaya Group, being the Amaya Beach in Passikudah that was acquired with a controlling stake of a 125 room property in May last year, posted losses post-acquisition of Rs.95 million of which Rs.81 million pertains to the high finance cost, it was noted.

In this respect the holding company, Amaya Leisure incurred an additional finance cost of Rs.51 million since the acquisition was funded via debt, the company's chairman stated.

Going forward the company wants to become a leading hotel operator owning and managing over 600 rooms, he stated.

In this regard, he noted that they would work on improving the profitability of Amaya Beach, Mr. Pandithage said.

Further, they have also urged authorities to look into improving facilities available in the North and East and most importantly to operate a domestic service between the international airport and the Eastern province.