Sri Lanka’s Hunas Hotel goes up market, loses customers

COLOMBO (EconomyNext) – Sri Lanka’s Hunas Falls Hotels Plc, a hill country hotel, said it lost customers after going to the luxury end, but aggressive marketing is underway to draw upmarket travellers.

Managing Director L. T. Samarawickrama said the property was refurbished and has been recognized as a ‘Small Luxury Resort’, an international classification.

"This recognition itself is a major advantage towards the new strategies adopted to market this eco friendly green resort at the highest possible level in the future," he said.

However the new positioning had lost customers, with occupancy dropping.

In the March 2015 quarter revenues dropped 12 percent to 37.0 million rupees and cost of sales fell 11 percent to 9.0 million rupees, and gross profits also fell 13 percent to 28 million rupees. Net profits fell to 286,000 rupees from 8.6 million rupees.

In the year to March revenues were down 8 percent to 139.8 million rupees, and profits were down 85 percent to 3.1 million rupees.

"The performance in terms of profitability was somewhat disturbed due to the hotel’s transformation from “ordinary 3 star to small luxury” resulting in its rejection by the typical low end market segment that used to patronize the hotel in the past, decreasing the volume of occupation.

The aggressive sales and marketing team is now very much focused on the luxury segment of the business and the intention is to gradually convert this fauna and flora rich resort into a property that would be accepted by the niche market."

Sri Lanka has seen a resurgence in tourism after the end of a 30-year war in 2009. Now large number of small hotels have come up, offering pricing more compatible with East Asian nations, which are available through booking engines, analysts say.







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