Lankaisla lifts leisure industry with global participation
Daily FT: Singapore-based, Lankaisla, sees immense potential in Sri Lanka’s tourism sector, and is set to expand its presence to Sigiriya and Colombo shortly, in what is billed to be a major acquisition.
The company has invested over $8 million in Sri Lanka over a year, and will hold as many as 1,000 rooms across the country by the year end, during its first-phase of expansion.
Lankaisla Chairman Dakshitha Bogollagama, speaking to the Daily FT said, Sri Lanka holds many underutilized potential tourism hotspots, and his company hopes to transform traveler experiences in the country with an innovative business model that has global reach.
Lankaisla has acquired over 300 rooms at present with investments in six properties consisting primarily of boutique hotels. The company spent over $3 million for its recent venture at the popular Peacock Beach Resort in Hambantota, which was relaunched following renovation that cost over Rs. 200 million. The Ocean Queen at Wadduwa is their latest venture, exceeding Rs. 50 million in investments for crucial upgrades and is now open to discerning travelers worldwide.
In Sri Lanka, Lankaisla has six properties in its present collection, namely, Mazarine Surf Suites Dickwella, Peacock Beach Resort Hambatota, Sunrise Cabanas Arugam Bay, Oga Reach Tissamaharama, Ceylan Lodge Anuradhapura and The Glenrock in Belihul Oya. The company has purchased outright some of the properties, while others are held in partnership with former owners.
“June 2022 is when crisis really hit the hotel sector following the triple shocks of the Easter Blast, Covid and finally the financial crisis. The third hit affected tourism the most. That’s the time we came in, as we saw this as an opportunity. The first investment was in September 2022. Investors wanted to see up to 500 hotels, and we had two months to showcase potential properties,” he said.
“Many hotels were stuck by then but they were reticent. So literally, we had to knock on doors to garner information, and managed to add about seven hotels a day to our prospective list. The first investment was in Dickwella, on the Mazarine Surf Suites with a loan to be repaid. We acquired it, completed the construction and it is now the first luxury hotel in Hiriketiya. Similarly, in Anuradhapura, Sena Lodge had an outstanding loan. We cleared it and now we enjoy 70% occupancy. We started work on Peacock Beach in April this year, and got the 106-room hotel ready in just six weeks. The Harbor Wing was not built since the tsunami, and today we have brought this hotel back to life and even launched four restaurants there,” Bogollagama said.
Hambantota is an area that offers immense potential, remarked the Chairman of Lankaisla, who believes the industry could take advantage of the infrastructure available on the ground. There is an airport, a port and a convention Centre that could accommodate 1,500 people, and serves as ample ground for specialized MICE events. Bogollagama noted that six investors from various sectors had visited Hambantota and Peacock Beach recently, who had links with airlines that could prove beneficial for the Mattala airport. He said Mattala offers significant potential as it is closer to Ella, Nuwara Eliya, Arugam Bay and the largely untapped East coast. This potential connectivity is very much underutilized, he added.
Lankaisla acquired Biology in Arugam Bay and converted it into Sunrise Cabanas, which now has the first air-conditioned bar in the area. The company also acquired OGA Reach Tissamaharama, while Ocean Queen and Elements at Kalametiya are under Lankaisla’s management. Bogollagama said the management model presents an appealing option, utilizing technology and infrastructure developed during the pandemic.
“We realized we could put to use the infrastructure we created during Covid to help us manage the hotel network, reduce costs and streamline operations. So, we have given that option to the owners. Some people are stuck for capital to fund expansion, with no revenue inflow. Who will grant them a loan? We provide loans without any collateral, up to Rs. 50 million in some cases to get the place cleaned up and operating. This is the difference in our operating model,” Bogollagama said.
OSL take:
Sri Lanka’s tourism industry is one of the fastest growing industries in the country after recovering from the impacts of the global pandemic and the economic crisis that followed. The many promotional campaigns carried out by the local authorities in key tourist source markets and the exposure received by Sri Lanka in the international media as a must visit tourist destination have all helped boost Sri Lanka’s tourism industry. The steady growth in tourist arrivals to the country and the increase in the number of flights operated to Sri Lanka by international airlines all indicate the growth in Sri Lanka’s tourism industry and its potential to grow further. All these have resulted in the expansion in business/investment opportunities in Sri Lanka’s tourism industry, especially in the leisure and hospitality sectors. The growing business potential in the industry is further evident by the interest shown by international leisure and hospitality brands to enter Sri Lanka’s tourism industry. Even the local businesses engaged in the tourism industry are engaged in refurbishment and expansion programmers to gear for the continuing growth of the industry. Foreign businesses/investors could therefore explore the expanding business/investment opportunities in Sri Lanka’s tourism industry.
| Article Code : | VBS/AT/26230922/Z_2 |