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Sri Lanka Taj unit expects strong demand
01 Sep, 2012 12:36:29
Sept 01, 2012 (LBO) - Taj Lanka Hotels, a unit of India's Taj Hotels and Resorts is expecting strong demand for hotel rooms in the next few years despite a number of new properties coming up as tourism arrivals continue to grow.
Chairman Raymond Bickson, told shareholders that expert forecasts indicate the demand for hotel rooms to outpace supply.

"Sri Lanka is set to change from a budget destination to a more exotic one offering a variety of experiences to a diverse segment of travelers," he said.

Taj was also supportive of a state intervention to set minimum prices for a five star hotel, a move that has attracted criticism from some sections of the industry as it restricts their pricing freedoms.

To escape the rule, hotels have to avoid being classified as a 'five star' property.

The firm which operates a hotel in by the Galle Face beachfront in Sri Lanka's capital Colombo reported profits of 124 million rupees in the year to March 2012, up from 99 million a year earlier, giving earnings of 89 cents per share.

The stock last traded at 27.60 rupees.

The profits came despite finance expenses surging to 97 million rupees from 20 million a year earlier due to exchange losses on a foreign loan as the rupee fell from 110 to 132 to the US dollar in the past year.

However its dollar revenues are helping offset the losses, Bickson said.

Taj benefits especially from high end Indian traffic. Indian arrivals which have been growing strongly over the years, especially after Sri Lanka was made visa free has been seen some hiccups in 2012.

Visas were re-imposed for India in 2012. Up to July 2012 Indian visitors grew 2.8 percent to 96,600, compared with a growth of 46 percent a year earlier.

India's currency has also depreciated making foreign travel more expensive.

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READER COMMENT(S)
1. Hotel Accountant Sep 01
Cairn Energy India alone paid about Rs.30 million to Taj Lanka last year as nearly 100-300 Cairn India staff housed at Taj Samudra during oil drilling and exploration activities in Sri Lanka according to Cairn Lanka financials.

During the year 2013 to 2014 Cairn will start its second phase which will in turn help Taj Samudra to earn more money. Only a few staff 5-10 people (Top Executives) were lodging in Cinnamon Grand and Cinnamon Lakeside.