The January performance of Sri Lankan hotels has been excellent, with arrivals reaching 50,750, which is a 32 percent increase on last January. The main contribution to this increase has been the British market (24.6 percent increase), Germany (54 percent) and India (73.5 percent). January and February are two of the most busy months in the tourism calendar, which is the peak of the high season.
The resort hotels have had occupancies close upon 70-80 percent for the month. Even the circuit hotels in the Cultural Triangle area, which were relatively low, have picked up and are now doing well with about 65 percent occupancy levels. These high occupancies, coupled with enhanced high season room rates, has resulted in almost all resort hotels having very high revenues for the month, and consequently, returning a net profit for the month. Many hotels are also facing an over-booking situation, a “problem” which Sri Lankan hotels have not experienced for a long time.
In the city, the five-star hotels have also done very well, reaching occupancy levels of 55-60 percent, indicating a 25 percent on year-on-year growth. This increase has come from the leisure and corporate segment and not necessarily from convention and incentive travel. The lower category city hotels have done much better, with an occupancy percentage closer to 80 percent.
All in all, the rapid increase in tourist arrivals continues strongly, and it is expected that February will be even better. With the contracting season for room sales for next winter now underway, most hoteliers will be looking to adjust their rates to reflect a more realistic price level, from the current rate structures which were in place during the war situation.
Some of the bigger hotel companies will be undertaking several refurbishing and upgrading programs during the forthcoming months of summer, and as a result, there will be some room stock reduced from the inventory for the summer period. The Negombo area, in particular, will see several hotels partially reducing their operations to undertake substantial refurbishing activities.