Hotel Groups rush in to Sri Lanka

Cashing in on the country’s burgeoning tourist population

The Taj group of hotels, owned by the Tatas, plans to invest $150 million in expanding and refurbishing its three properties in Sri Lanka. ITC plans to invest $78.5 million in putting up a new hotel in Colombo.

Taj and ITC are among the major hotel brands that have announced plans to set up hotels in the island nation. The other leading international brands include Shangri-La, Four Seasons, Ritz Carlton and Raffles.

Sri Lanka is trying to position itself as a “treasured island” for tourism and targets 2.5 million tourists by 2016, up from 855,000 in 2011. This calls for doubling the inventory of hotels rooms, to 5,000, in the next five years, says Mr Rohit Khosla, Director of Operations – TAJ Hotels & Resorts Ltd, a company listed on the Colombo stock exchange, which owns the Taj Samudra property in Sri Lanka’s capital city.

Mr Khosla told Business Line in Colombo last week that Taj was adding rooms in all the three properties it currently owns in Sri Lanka – Taj Samudra, Vivanta by Taj Bentota (which is a joint venture with a local partner) and Gateway, a “mid-market” property, managed by Taj. Mr Khosla said that the total investments in these would work out to around $150 million.

In addition, Taj has ambitions to put up more hotels across Sri Lanka so as to double the number of rooms it has by 2016 (from 600 today).

ITC’s plans are yet to be finalised, but it has identified land in Colombo.

Of the proposals, the biggest appears to be that of a company that is not known to be into hotels in a major way. Everybody knows Mohammed Mustafa shopping complex in Singapore, owned by Tamils. Mustafa plans to put up a 1,000-room hotel close to Negombo, which is near the Colombo airport.

The next biggest plan could be that of the Chinese brand Shangri-La, which plans a 661-room hotel in Colombo and a 351-room hotel in the port city of Hambantota, where incidentally, the Chinese are close to completing the construction of a deep draft port. Shangri-La has also bought land near Tricomalee on the Eastern coast, sources say.

M. Ramesh writes for The Hindu and can be reached at: mramesh@thehindu.co.in

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