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Sri Lanka JKH hotels to reduce costs by outsourcing

By Rohan Gunasekera

Feb 17, 2016 10:17 AM GMT+0530 | 0 Comment(s)

ECONOMYNEXT – Sri Lanka’s John Keells Holdings, one of the biggest hotel operators in the island, aims to reduce costs by outsourcing key functions like laundry, JKH Deputy Chairman Ajit Gunewardene said.

“We think the traditional form of managing hotels has to change and change dramatically, taking into account rising costs – essentially daily fixed costs and the somewhat low productivity we have in this country,” he said.

John Keells Holdings is looking to form partnerships with other parties in future, he told a tourism forum in Colombo.

“We have a strategy – to move current fixed costs into variable costs by way of outsourcing, through partnerships,” Gunewardene said.

“We are partnering with an external entity – a completely independent party - to set up a laundry facility to take on all our laundry in each of our hotels.”

The partner can have guaranteed volumes from JKH group, initially be exclusive to JKH and meet its quality standards and later be allowed to open up the business to other hotels.

This outsourcing model on long term arrangements will be considered for other hotel functions as well, Gunewardene told the Tourism, Hotel Investment & Networking Conference (THINC) organised by HVS, a hospitality consulting firm.

“Execution is key,” Gunewardene said. “We will work closely with our partners as if we are doing it, we will bring in our standards, sit with them side by side and make them self sufficient over period of a year or two.”


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