Hotel Developers Lanka readies revamped Hilton Colombo for tourism rebound.
Daily FT: Hotels Developers Lanka Ltd. (HDL) is readying a revamped Hilton Colombo for the envisaged rebound in tourism following favourable country situation and relaxation of travel advisories by several countries.
The first-ever major refurbishment of Hilton Colombo after being opened 35 years ago is nearing completion with an investment of Rs. 2.5 billion. Around 253 rooms of Hilton Colombo is under-going a revamp whilst the five star remains operational and busy even amidst challenging times.
HDL Chairman Nimal Perera told the Daily FT that the total refurbishment of rooms between 7th and 17th floor is scheduled for completion by March next year. He said this is in addition to Rs. 250 million spent in the revamp and relaunch of the Chinese restaurant Wok which since has become most popular.
HDL also plans to revamp and relaunch its authentic Sri Lankan cuisine specialty restaurant Curry Leaf with an investment of Rs. 100 million and ready by December. A new fine-dining Japanese restaurant is slated to open in the second quarter of next year.
Hilton Colombo’s new offering Sunset Blue too has become the “must be” place for the best of entertainment in the city for the young at night.
Hilton is the world’s most valuable hotels brand, according to a new report from the leading brand valuation consultancy, Brand Finance.
Chairman Perera said the emphasis is to further enhance revenue from Hilton›s market leadership in Food and Beverage (F&B) and Banquets whilst refurbished property will offer higher quality hospitality for tourists from the upcoming winter season onwards.
The new initiatives are hot on the heels of the revamped public spaces and the lobby at Hilton Colombo. Additional investments were put into the property and plant in terms of improved energy efficient equipment such as chillers and cooling towers, transformers and elevators. Further efforts are underway to maximise energy saving aspects including solar.
HDL is one of the best performing State-Owned Enterprises (SOEs), says Perera. Since coming under the ownership of Treasury, HDL has seen State investment of Rs. 12 billion to keep flagship international five-star brand Hilton Colombo successful.
Unlike the majority of the SOEs, HDL’s debt (short and long term) is around Rs. 3 billion only whilst cash for recent upgrades had been internally funded. “We have reinvested our profits to improve the property and facilities,” the Chairman added.
Perera also attributes HDL success to excellent cross-cultural management and a model Public Private Partnership. The US-headquartered Hilton is a Fortune 500 company and Colombo also works closely with its Singapore office.
HDL and Hilton Colombo have also benefited from prudent risk management practices and strategies given the volatile exchange environment that prevailed in the past year and cash flow management etc. Early procurement decisions and the decision to renovate whilst keeping the hotel operating and amidst COVID-pandemic were also wise moves.
Unlike most SOEs, HDL has been an exception as it has preserved and enhanced the Government asset despite challenges. HDL’s total assets are worth Rs. 16 billion. Recently HDL was listed among top SOEs in terms of best practices in auditing, accounting and corporate governance.
HDL Chairman also expressed confidence in the Company declaring a dividend in FY23, its first dividend since coming under the purview of the Treasury. “We could have declared previously but there was an urgency to reinvest our profits to the revamp initiatives,” he added.
Perera said that refurbishment of balance rooms of the 382-key Hilton Colombo, development of the third tower (with a possible 190 rooms) and prospects for a mixed development project on the over 2-acre land in the area of the Hilton Sports Centre are in the pipeline.
“Most of the feasibility studies on these new planned initiatives are finalised or nearing completion. The Government strategy will be to invite new investors or equity partners to undertake the new developments,” revealed Perera, who is also the Chairman of the State-owned special purpose vehicle Selendiva Investments Ltd., and was formerly the Urban Development Ministry Secretary.
Sri Lanka’s tourism industry is on the path to normalcy after facing challenges posed by the global pandemic and its aftermath. The refurbishment programmes undertaken by local tourism industry stakeholders especially in the leisure and hospitality sectors is indicative of the growing business potential in the industry. Also, many international leisure and hospitality brands have expressed interest in entering Sri Lanka’s tourism industry after identifying its growth potential. Sri Lanka has received much exposure in the international media having been called a must visit tourist destination as well as being listed among the top island destinations by several leading travel publications. With Sri Lanka recording a steady growth in tourist arrivals to the country and bookings coming in for the upcoming season, foreign businesses/investors could explore the growing opportunities in Sri Lanka’s tourism industry, especially in the leisure and hospitality sectors.
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