Home / / HDL saga: Hilton feasts as Govt. loses

HDL saga: Hilton feasts as Govt. loses


Comments / 1648 Views / Wednesday, 24 August 2011 02:06


Despite a staggering Rs. 10.3 billion accumulated loss at the owning company of Sri Lanka’s premier five star hotel and the Government at large, world famous Hilton has been feasting with earnings, the Daily FT learns.

Following the release of annual accounts for two decades this week, questions have been raised by leisure industry experts over the highly exorbitant management fees and other charges by Hilton.

As exclusively reported on Monday, Hotel Developers (Ceylon) Plc as at end 31 March, 2010, had accumulated Rs. 10.3 billion loss.

The company yesterday released annual accounts for near 22 years starting from financial year ended on 31 March, 1999.

 Except for three years the rest has been loss making whilst liabilities of HDL as at end FY 2010 amounted to Rs. 12 billion. The company also faces several litigations including a case for winding up.

Midst and perhaps oblivious to this mayhem of losses Hilton however has been enjoying its own share of earnings thanks to over 30% of Gross Operating Profit by way of fees slapped for management as well as Group charges.

Daily FT learns that at least during the past five years between 2005/2006 financial year and 2009/10, Hilton had raked in over Rs. 700 million whilst if the previous years’ amounts are added the figure could be over Rs. 1 billion.

Analysts opined Hilton’s take home percentage of 33 to 37% per annum was exorbitantly high.

 Though not a strictly comparable to prove their claims these analysts cited the average 12% which Hilton takes via its engagement at Hilton Residencies. Industry experts also admit that 30% on average was a high figure for any star class property.

As per the 1984 signed agreement between Hilton USA and HDL the management deal spans 50 years.


Share This Article


COMMENTS

Today's Columnists

The unilateralism of Tamil nationalism

30 April 2016

As always Tamil nationalism has overreached; acted unilaterally and overplayed its hand. As always this overestimation based on (congenitally?) misplaced arrogance undermines its Sinhala moderate counterparts and negotiating partners.  This...


Of taxation, Inland Revenue and Panama Papers

30 April 2016

Avurudu vacation revelations Court vacation always permits that little bit of extra time to pen something down and the occasion arose when former Dep. Governor of the Central Bank Dr. Wijewardene, Island Editor Shamindra Ferdinando and ...


They march on May Day

30 April 2016

   Puck, in the Shakespearean comedy Midsummer Night’s Dream, thought that we mortals are fools. Had he had the benefit of observing the tragi-comedy of our May Day rallies he may well have used a stronger word than that ...


On the fast track – or on the road to dusty death?

29 April 2016

THE WRITING IS ON THE WALLSTRÖM: Sri Lanka is looking increasingly like the prettiest girl on the beach in this region. Here, Sri Lankan Foreign Minister Mangala Samaraweera and his Swedish counterpart Margot Wallström parley about the i...


Columnists More