Apr 25, 2013 (LBO) – Profits at Lighthouse Hotel Plc, a unit of Sri Lanka’s Jetwing group fell 29 percent to 57.1 million rupees in the first quarter of 2013, interim accounts showed.
The firm reported earnings of 1.24 rupees for the quarter, in accounts filed with the Colombo Stock Exchange.
In the year to March profits rose 1 percent to 112.1 million rupees giving earnings of 2.44 rupees per share. In addition the firm also made asset revaluation gains of 12 million rupees, in the year.
Lighthouse is the first hotel to file accounts in the March earnings reporting season. Sri Lanka’s Employees Provident Fund owns an 11.05 percent stake in the firm.
In the March quarter revenues fell 5 percent to 203 million rupees, and cost of sales rose at a faster 16 percent to 39.4 million rupees, causing gross profits to fall 9 percent to 163 million rupees.
This year the Galle Literary Festival was not held in January 2013, which analysts say could have hurt revenues of hotels in the Galle area, where Lighthouse is located.
Sri Lanka has also been getting negative publicity over the killing of a tourist and the rape of his girlfriend by suspects that include a politician and the lack of any prosecutions, amid an overall perception of a breakdown in rule of law.
But many of Sri Lanka’s hotels are also overpriced compared to competition according to some critics, which means aggressive promotion is needed to maintain prices.
The industry has been calling upon authorities to use a cess tax collected from them for and aggressive promotional campaign.
Last year the rupee fell by about 10 percent making the country cheaper for foreigners in countries with stronger exchange rates. Economic troubles in Europe may also be hurting the travel industry.
Lighthouse Hotel plays in the top end of the market.