Taj Colombo sees some recovery in biz but operating costs weigh on performance

Providing first glimpse to the city hotels operating in Sri Lanka, Taj Samudra Colombo reported its interim results for the three months ended in March 2023 which showed some semblance of recovery in operations after a long and arduous period of operations in the last couple of years. 

The hotel run by TAL Lanka Hotels PLC reported 46 percent increase in revenues in the January – March quarter, the company’s fourth fiscal quarter to Rs.781.7 million.
Tourist arrivals are fast recovering to their pre-pandemic and pre-Easter attack levels as the officials revised their year end target to 2.0 million from 1.55 million while MICE activities which capture meetings, incentives, conferences and exhibitions are slowly getting underway as the economy is looking past its worst conditions last year.

The company reported earnings of 97 cents a share for the three months or Rs.135.5 million compared to a net loss of Rs.7.84 a share or Rs.1,095.4 million in the year earlier period. 
The bottom-line has received a boost from finance cost which turned a positive Rs.444.9 million compared to an interest cost of Rs. 1,016.1 million in the same period last year.

At the operating level the hotel reported a loss of Rs.36.4 million compared to Rs.29.1 million a year ago. 
Despite brightening business prospects, the hospitality sector is somewhat undermined by the hefty operating costs specially coming from higher utility prices after the back-to-back revision in electricity tariffs. 
Meanwhile, the sector also runs a dearth in skilled staff after three years of losing employees due to the pandemic and the subsequent economic crisis. 

Despite the increasing number of tourist arrivals, Sri Lanka is yet to attract high-spending tourists.
Sri Lanka offers a financially attractive destination for travellers after its currency collapsed a year ago. 
The two foreign parties, Tal Hotels and Resorts Limited and Ihoco BV held 58.14 percent and 24.62 percent stake respectively in Taj Samudra Colombo as of March 31, 2023 while the Employees’ Provident Fund had 5.33 percent stake being its third largest shareholder.