Aitken Spence in US $ 100mn resort deal with Spanish chain
6 November 2013 10:43 am
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As exclusively reported by Mirror Business a couple months back, Sri Lanka’s Aitken Spence PLC yesterday said it is teaming up with Spanish Hotel chain RIU Hotels to set up a US $ 100m million resort in Ahungalla.
“Aitken Spence PLC will launch t he first business model involving the Southern Highway and the Mattala Airport by investing in a USD 100 million beach resort in Ahungalla, to be managed by an international hotel chain.
The 5 story, 500 roomed, 5 star luxury resort which will be managed by RIU Hotels, Spain, would also be a first for the Spanish chain, being their inaugural project in the Asia Pacific region,” Aitken Spence said in a statement.
Prior to this, Aitken Spence had entered into a 50:50 joint venture with the international luxury brand, Six Senses Resorts and Spas, to develop a hotel on the same property. The project at the time of its announcement in October 2010, was estimated to require an investment of approximately US $ 40 million, encompassing 10.5 acres of beach fronted land. Aitken Spence already operates one property in the area, namely, Heritance Ahungalla. The deal subsequently fell through following the sale of Six Senses to an American private equity firm, Pegasus Capital Advisors, in April 2012.
“The timing of the hotel’s opening will be right since the Southern Highway to Hambantota is expected to reach completion by then and we have the Mattala Airport facility already in place, giving us the perfect mix for our business model.
Aitken Spence has always encouraged infrastructure development in the country and our investment is proof of our confidence and support of the government’s development plans,” said Deputy Group Chairman Rajan Brito,
According to the statement, the Aitken Spence management is also of the opinion that the private sector needs to develop business modes of this nature, which are in line with the government’s vision for the country’s development.
The project will also be unique in its concept, since it will introduce charter flights to the country. The hotel which would cater to high-end customers looking for long stay vacations will arrive on Boeing 787 Dreamliner charters which can carry up to 200 – 300 passengers at a time. RIU Hotels, is an all-inclusive model which has seen international success across 107 properties managed by them in 16 countries.
Aitken Spence expects this business model would also have a snowball effect in developing the tourist industry, particularly in the deep South of the country.
“This would be a huge boost to the tourism sector as 700 - 800 guests coming into the country in one go would help in creating international awareness of Sri Lanka as an emerging holiday destination in Asia” said Brito
Founded in 1953 by the RIU family as a small holiday firm, the company is presently owned by the family’s third-generation and maintains over 100 hotels across 19 countries including: Spain, Portugal, Costa Rica, Mexico, the Bahamas, Turkey, Cape Verde, Germany, Jamaica, Morocco, Panama, Tunisia, the United States of America and Cuba.