Kingsbury hotel deep in red due to virus-inflicted pain on biz

Hayleys Group’s city hotel, The Kingsbury PLC, saw its losses widening during the period ended in March 2021 (4Q21), demonstrating the severe impact of COVID-19 virus on the leisure and hospitality sector.  

The hotel company reported a loss of Rs.116.7 million for quarter under review or 24 cents a share compared to a loss of Rs.50.2 million or 10 cents in the year earlier period reflecting how deep the financial problems confronted by the company for more than two years running since the Easter attacks in April 2019, which was then exacerbated by the pandemic.   

The company said restrictions imposed on the maximum number of pax that is allowed inside a venue after the second wave of the pandemic last October weighed on the revenues from its restaurants and banquets, while the re-opening of tourism trade in January failed to bring any improvement to its room revenue.   

The company reported revenues of Rs.273.5 million in the quarter, nearly half the amount it generated in the same quarter last year, which was also dampened due to the virus. The revenues also demonstrate what the local guests could contribute to the leisure sector with the total absence of foreign visitors, though that is not sufficient for the hotel to cover its total cost.    

For the full fiscal year ended in March 31, 2021 the company lost Rs.1.57 a share or Rs.758.2 million on revenue of Rs.777.9 million. 

Health authorities recently banned all events from weddings to corporate functions to other get togethers, both indoor and outdoor, effective through the end of May, further deepening the financial woes of the sector. 

“The management continuously evaluates the situation and is currently practicing several cost management measures to benefit the cash flows, whilst also adhering to health and safety guidelines prescribed by health authorities”, the company said in its interim results. 

The company recovered dues from its receivables and nearly doubled its long-term borrowings during its fiscal year in order to manage liquidity but incurred less finance cost as it benefited from lower interest rates. 

The Central Bank also extended the relief afforded to the tourism sector from April this year by way of moratoria on loans for further six months as sector woes run deep due to the prolonged nature of the virus implications. 

Hayleys group had 59.48 percent stake in The Kingsbury PLC while the Employees’ Provident Fund had 10.56 percent by March 31, 2021.