Having recently invested over Rs 2 b in Lankan tourism business, diversified blue chip expands leisure portfolio with management and joint venture of hotels in New Delhi, Kerala and Madurai; Gets fourth Maldivian resort, Draws Ramada brand to Golden Sun; New $ 20 m resort with world famous Six Senses on course
After being the first Lankan firm to venture into Maldives in tourism and having recently completed investment of over Rs. 2 billion in its domestic hotels, the diversified blue chip Aitken Spence is creating history once again in a trailblazing entry into the giant Indian leisure market.
Aitken Spence Managing Director Rajan Britto told the Daily FT yesterday that the pioneering initiative to the neighbouring giant India's leisure industry was part of the Company's well planned expansion of its tourism portfolio.
"Our confidence in and commitment to Sri Lanka has been further cemented with over Rs. 2 billion investment in key upgrades to Kandalama and Triton Ahungalle (now Heritance Ahungalle). Several more major investments are on course to consolidate our position. The entry into India is part of the strategy to tap the neighbour's massive tourism potential," he said.
India's tourism industry is booming, especially after its highly successful global campaign "Incredible India."
Mr. Britto said that, in entering India, Spence was taking the management route capitalizing on the Company's world class and proven expertise and Sri Lanka’s rich human resources. "What has made Spence hotels different to the rest are the human resources and our management excellence. We will take this into India and especially the top level positions will be Sri Lankans," he said adding that Spence always believes in working with proven joint venture partners. The management deals worked out include on percentage of turnover and operating profits.
The Company has signed a MOU with family owned real estate entity Anant Raj Industries Ltd., to manage a brand new 5 star medium size hotel in New Delhi. This hotel is under construction and scheduled to open in December 2006. With extensive banquet and meeting facilities this hotel could cater to 1,500 to 2,000 people at any given time. The number of rooms is to be increased to 150 next year.
A second similar hotel that is under construction is to be opened by October next year will be managed by Aitken Spence Hotel Management.
Being the capital of India, New Delhi is a popular MICE destination while come 2010 it will play host of the Asian Games.
Perhaps best reflecting Spence's true innovative spirit would be the project in Kerala where it has entered into a joint venture with Floatels India Ltd., to build a first of its kind luxury resort with floating villas and spa. The joint venture has finalized the purchase of a 15 acre land on an island in the backwaters of Kerala, overlooking a vast span of water.Aitken Spence Hotels Managing Director Malin Hapugoda said that the Kerala resort, which will be designed by Lankan architects, will be the first "Heritance" brand hotel in India and this too would be managed by Aitken Spence. This will be ready by 2008.
In Madurai, the Company has finalized an agreement to manage a unique garden resort with 80 luxury rooms that will be renovated. Madurai is on the cultural route of Tamil Nadu. The resort will also offer banquet and meeting facilities. "Two other projects in India are under negotiation," Mr. Hapugoda said.
Aitken Spence is also further expanding in the Maldives, which it entered in 1993. With Lankan tourism still performing below its potential, the popular Maldives has helped revenue streams for Spence. It has acquired the fourth resort Huduran Fushi which will be ready by November, 2006 after refurbishment. This resort, which is only 20 minutes Male, will have 150 rooms thereby increasing Spence’s room strength to 600.
"Revenues from the new Maldives property as well as the first hotel in New Delhi will start flowing from the 2007/8 financial year," Mr. Britto said.
The Company is also consolidating its position in the Sri Lankan leisure industry.
"We have invested over Rs. 2 billion in extensive renovation of Triton Ahungalle (US4 12 million) as well as Kandalama (US$ 6 million). We will continue to have faith in destination Sri Lanka, the fuller potential of which however is yet untapped due to the elusive peace in the country," Mr. Britto said.A significant development is the luring of Ramada International, which has agreed to brand Golden Sun at Kalutara as a "Ramada Resort." This is a franchise agreement and the hotel will continue to be managed by Aitken Spence," Mr. Hapugoda explained.
Spence has acquired 51% stake in the owning company of Golden Sun which co-owned by a Singapore company. The 100-room Kalutara resort has got a facelift following the Rs. 220 million refurbishment.
Perhaps after Kandalama, Spence's most exciting project would be the US$ 20 million Evason Hideway Resort in Ahungalle in a 50:50 joint venture with world famous Six Senses. The latter has already set up an up market spa at Kandalama.
The new resort, work on which will commence in three months, will be ready by 2008.
"Attracting Six Senses to Sri Lanka is a major breakthrough for the country and it will lift Sri Lanka's tourism profile globally. Six Senses will now begin to market Sri Lanka extensively through its global operators as well as directly," Mr. Hapugoda said. Six Senses re