The Kingsbury PLC, the owners of The Kingsbury Hotel in Colombo, saw its September quarter (2Q18) earnings falling 35 percent year-on-year (YoY) to Rs.77.5 million, the interim financial accounts released to the Colombo bourse showed.
The earnings per share for the quarter stood at 32 cents, down from 49 cents YoY.
The hotel company’s top line grew 6 percent YoY to Rs.835.7 million. But cost of sales, which rose 14 percent YoY to Rs.401.4 million, undermined the top line gains.
The operating profit for the quarter fell 31 percent YoY to Rs.102.3 million over higher administration expenses.
Star-class hotels operating in Colombo city are bound by minimum room rates. On top of that, Sri Lanka has a booming informal accommodation sector, which offers attractive deals to tourists.
The country’s city hotel space is expected to get extremely competitive with international hotel chains such as Shangri-La and Hyatt opening up their luxury properties shortly.
Meanwhile, for the six months ended September 30, 2017, the hotel company reported earnings of 66 cents a share or Rs.51 million, down 68 percent YoY.
Highly diversified Hayleys group and its subsidiary Carbotels collectively hold nearly 60 percent of the issued shares of the hotel company.