By Chandeepa Wettasinghe
Diversified conglomerate Aitken Spence PLC has significantly increased its presence in the Maldives with the acquisition of two new islands to develop resorts, according to the latest annual report.
“We were able to acquire two more islands. This brings the total number of islands held by Aitken Spence in the atolls to six,” Aitken Spence Group Chairman Harry Jayawardena said.
The lease for Aarah island in Raa Atoll was acquired in 2014 for a consideration of Rs.466 million, and the 160-room resort will begin construction shortly, while the rights for Raafushi in Noonu Atoll were acquired this April and the architectural designing for a 200-room resort is currently ongoing.
Aitken Spence Hotel Holdings PLC, under the Adaaran brand, is the largest international resort operator in the Maldives with a room capacity of 630 across 5 properties.
Aitken Spence Group Managing Director J. M. S. Brito praised the Maldivian government’s friendly tourism development policies. “It must be admired for the foresight it had to strategically develop the Chinese market at a time when Europe was heading for a downturn.
The government has recently also been considering the extension of the current 50-year leases to 99-year leases; we welcome the move,” he said.
Revenue from the archipelago accounted for 75 percent of the group’s hotel company’s top line in the past financial year, which grew by 4 percent since 2013/14, due to increased room rates and stable occupancy.
However, Jayawardena noted the Russian and Ukrainian crisis, the reconstruction of ocean villas at the Adaaran Select Huduranfushi resort which were destroyed in a fire, and the change of lease terms on one island constrained profits in the Maldives.
Meanwhile, a recent Maldivian delegation to Sri Lanka said that 60 islands are awaiting around US$ 2 billion in investments, and invited Sri Lankan hotel operators to set up operations there.
New brand to be unveiled in India
Aitken Spence Hotel Holdings has created a new brand named ‘Turyaa’ and will be launching the first property in Chennai, India.
“Our recent investment in India includes a 143-room city hotel in Chennai. This property, has been redesigned and re-branded and is scheduled to be opened under our new brand ‘Turyaa’ in July 2015,” Jayawardena said.
The 5-star property was acquired last year for US$ 25 million, and is ready for operations, subject to regulatory approvals.
It is being marketed as a business hotel, located in the Chennai IT corridor, and 20 minutes away from the Chennai Airport.
Aitken Spence is seeking to widen its portfolio under Turyaa not only in India, but also in Sri Lanka, becoming the second brand of the company to operate locally following the luxurious ‘Heritance’ brand, MirrorBusiness learns. Further, in a change of its modus operandi in regional markets, Aitken Spence is attempting to own and operate its future properties, instead of managing as a third party.
“We were reassessing our existing investments and business model in India to enable our presence there to make a more positive contribution to overall performance. Accordingly, our existing management contracts during the financial year were discontinued,” Brito said.
The company was managing 2 hotels in Coimbatore and Puducherry. Aitken Spence also owns 2 undeveloped properties in the tourism state Kerala.
Heritage Grove changes direction
Aitken Spence has changed the direction of its elder care services project which was launched last year, due to stakeholder feedback.
“‘Heritage Grove’ was launched during the last financial year as a high-end retirement community. However, having gained market feedback, we have strategically changed the concept and positioning of the project to a country club, thereby expanding the target market,” Aitken Spence Group Chairman Harry Jayawardena said.
According to the annual report, 3 model homes were constructed, and the marketing and promotional expenses of Heritage Grove had a negative impact on the profitability of the services sector during the financial year.
Located in Negombo, Heritage Grove will be a gated community offering 140 villa homes, a clubhouse, spa and other hospitality and entertainment services.
It is aimed at high net worth Sri Lankans and expatriates, with villas priced between US$ 195,000 - $225,000.