Hotel Developers (Lanka) Chairman Krishantha Prasad Cooray

• Calls for coordinated approach with participation of every stakeholder as key to rebuild tourism industry and economy  
• Whilst condemning terrorism Cooray says it provides an opportunity for all Sri Lankans to unite as one to recover and emerge stronger than before
  
  
  
   

Hotel Developers (Lanka) Plc, Chairman Krishantha Prasad Cooray has described Hilton Colombo as having demonstrated extraordinary resilience in 2018 despite serious challenges faced by the tourism industry and the country.

He said that the tourism industry had faced multiple setbacks and had a turbulent period in the financial year ended on 31 December 2018.

“First, there was the uncertainty following political turmoil towards the end of the 2018 year. Then, there were the tragic and horrifying attacks on Easter Sunday in early 2019,” he said in the Chairman’s Review of HDL’s 2018 Annual Report released last week.

In 2018, Hilton Colombo’s total revenue was Rs. 2.9 billion, down from Rs. 3 billion a year earlier. Loss before tax was Rs. 126.4 million as against a profit of Rs. 258 million.  Room revenue in 2018 was Rs. 1.2 billion in comparison to Rs. 1.3 billion in 2017. Occupancy was 48% down from 57%. F&B Revenue remained unchanged at Rs. 1.6 billion.

Cooray said the company was poised to welcome a record number of guests in the peak season in Q4 2018, but unfortunately Hilton Colombo was unable to realise the expected benefits due to the volatile political climate that prevailed from October 2018 onwards, during which frequent public protests were held in the vicinity of the hotel.

“Notwithstanding challenges, as it always has, Hilton Colombo demonstrated extraordinary resilience as well as resourcefulness by simply placing faith in the fundamental principles, namely quality, staff, commitment and teamwork, all of which came to the fore during the year to make the most of a challenging situation,” Cooray emphasised. 

He said despite delays in commencing room refurbishment, Hilton Colombo managed to compete aggressively with new entrants to the industry, recording only a marginal decline in revenue compared to the previous year. The profitability during 2018 was impacted by a substantial charge of depreciation arising from capitalisation of the refurbishment cost at the completion of the first phase in August 2017.  

However, Cooray said there were many positive developments, such as higher revenue and strong performance from the refurbished F&B outlets, coupled with strong business from the MICE sector, which deemed Hilton Colombo to be the most preferred property for corporate events. 

The property had already made significant investments in surveillance and protection technology to ensure heightened security for guests, which have been further reinforced in recent days. “The level of security and protection we offer in the leisure industry, apart from being the most prized address in the city, has cemented the confidence of our guests and our corporate clientele,” the HDL Chairman added. 

Despite the setback, the industry is ready and willing to survive the lean period and emerge even more resilient. We are hopeful that the Government will embark on aggressive marketing and promotions in source markets to convey the message globally that Sri Lanka is open for business

Commenting on the Easter Sunday attacks, he extended his deepest condolences to the loved ones of those who lost their lives in the terrorist attack on Easter Sunday. “The Hilton Colombo family too was a victim of this tragedy. Kaori Takahashi, the beloved wife of our Japanese chef Hikaru Takahashi, was killed on Easter Sunday. Hikaru and his family have been with Hilton Colombo for over four years. He and his two young children were heartbroken beyond belief at Kaori’s loss,” HDL Chairman said. 

“I am humbled and honoured that after a three-month leave in Japan, Hikaru has returned to Sri Lanka, and to the Hilton Colombo, with his daughter Ami and his son Yu. I speak on behalf of every director, executive and employee of Hilton Colombo, when I say here that the Takahashi family can expect our unwavering and unconditional support. Theirs will be an exceptionally special family for our country, for the hotel, and for each of us individually,” he added.

Noting that “we are little or nothing if our fellow beings are rendered helpless,” Cooray said few businesses could thrive in the long run in a climate of uncertainty and an overbearing environment of helplessness. Nevertheless, a nation that is resilient will endure all with fortitude, and so too a company that has strength, determination, flexibility and above all, formidable corporate character. “Therefore, without any false humility, let me make it clear that we have what it takes – not just to prevail, but to emerge stronger, more versatile and vibrant,” he said.

It was emphasised that terrorist attacks pose a serious challenge to the tourism industry and the economy in general. “Nevertheless, we have recognised that it simultaneously provides an opportunity for all Sri Lankans to unite as one to recover and emerge stronger than before. Terrorism is a threat to democracy everywhere and I am hopeful that countries around the globe that value democracy will encourage their citizens to travel to Sri Lanka to negate the adverse effects of such attacks,” Cooray said.

Noting that the leisure industry has always had to adopt a medium- to long-term outlook to sustain the growth momentum, the HDL Chairman expressed confidence that this year too would be no different and that the industry would recover reflexively within a short period. Travel advisories have been lifted and tourists have the required assurances to holiday in Sri Lanka once again. “Considering the positive projections for the year 2019, I have full confidence that we can carve out a strong recovery by working together to instil confidence in tourists to return to Sri Lanka,” Cooray said. It was pointed out that as the industry performance during the period under consideration indicates, the destination was positioned to perform well on all counts in 2019. However, due to the impact of the Easter Sunday attacks, the Sri Lanka Tourism Development Authority has a challenging task to resurrect the industry and help it regain momentum. The Chairman said the Government had moved to provide concessionary loans, other subsidies and incentives to the industry operators for swift recovery in response to the appeal at this critical point of time. “A coordinated approach with the participation of every stakeholder is necessary to rebuild the industry and the economy,” stressed Cooray.

According to him the private sector is eager and willing to partner the Government in chalking out an appropriate recovery plan for the short and medium term to turnaround the sector in the fastest possible time, thereby mitigate the negative impact on the sector. “Despite the setback, the industry is ready and willing to survive the lean period and emerge even more resilient. We are hopeful that the Government will embark on aggressive marketing and promotions in source markets to convey the message globally that Sri Lanka is open for business,” Cooray said.

All stakeholders in the sector have a critical role to play in making a collective effort to move ahead strongly and we will be assessing how we can leverage the Hilton brand to make a tangible difference. Having great faith in our product and the people behind it, I am confident about our ability to reinvent growth

He said that all stakeholders in the sector had a critical role to play in making a collective effort to move ahead strongly. “We will be assessing how we can leverage the Hilton brand to make a tangible difference. Having great faith in our product and the people behind it, I am confident about our ability to reinvent growth,” the HDL Chairman said. 

He used the review in 2018 Annual Report to place on record HDL’s and Hilton Colombo’s enormous gratitude to its guests who continue to patronise the property and appreciate the signature Hilton brand of hospitality. The immense contribution from colleagues on the Board and the senior management of the company for driving revenue generation against all odds was also acknowledged.

“The dedication of the General Manager and the staff of Hilton Colombo have been pivotal in sustaining our position as Sri Lanka’s leading 5-star city hotel. I would also like to thank all our stakeholders for their support. I have no doubt in my heart that we, as a nation, will successfully overcome the challenges that confront us at this point in time by turning them into opportunities for sustainable growth,” HDL Chairman Cooray said.

Hotel Developers (Lanka) Plc Board of Directors comprises K.P. Cooray (Chairman), D.S. Ameresekere, J.M.U.P. Jayamaha, A. Senanayake, T.S.A. Mathew, D.R. Samarasinghe, S. Liyanamana, P.D. Samarasinghe, C.P. Ranasinghe, and S. Alles. 

Tourism industry in 2018