Sri Lanka’s economy seems to be seeing resurgence since the end of their civil war. The John Keells Holdings Company wants to take advantage of this economic good fortune by investing $100 million in building new resorts. Keells Holdings is Sri Lanka’s biggest diversified company, and has plans to build at least 5 more hotels over the next three years. This will double the country’s room capacity from the current 650 rooms. This is encouraging news considering that most of the news coming from the hotel industry these days is fairly bleak.
Analysts project that the island’s $41 billion economy may expand as much as 6 percent next year after growth of about 3.5 percent in 2009, Central Bank of Sri Lanka Governor Nivard Cabraal said October 6. Tourist visits to Sri Lanka have increased since June, a month after government forces ended the Liberation Tigers of Tamil Eelams’ 26-year quest for a separate homeland. Tourists have been anxious to come back to the island’s beautiful beaches.
Deputy Chairman of the company Ajit Gunewardene said in an interview yesterday that Keells will begin constructing a 190-room hotel on Sri Lanka’s western beaches by April and add two new properties on the island’s east coast. The company is confident that they will be able to build the hotels from their own funds. “At this point in time, we have no requirement for raising funds,” he said. “We have the capacity to invest significant amounts into the economy.”
Gunewardene also said the central bank’s easing monetary policy, which has reduced interest rates to a five-year low, will also help boost demand for residential properties and expansion at Keells’ property development unit by the second-half of next year. “There is significant upside potential for the year ending 2011,” Gunewardene said.