1 June 2017 12:01 am
By Chandeepa Wettasinghe
John Keells Hotels PLC (KHL), a subsidiary of the country’s largest conglomerate, John Keells Holdings PLC (JKH) will be demolishing the Bentota Beach Hotel, one of the masterpieces of the legendary Sri Lankan Architect Geoffery Bawa, next month, for recreation at a cost of around Rs.4 billion.
“The hotel was getting old. (But) the centre block, which is the Bawa block, will be rebuilt in exactly the same way,” JKH Executive Director and JKH Leisure Industry President Krishan Balendra told Mirror Business yesterday.
He said following consultations with experts, who also advised against refurbishing since the structure is too old, Bawa protégé Channa Daswatte has been selected to design the new hotel.
“We will be using internally generated funds, and it would cost approximately Rs.4 billion,” Balendra added.
JKH currently has Rs.84.28 billion in short-term investments and cash, although it has commitments for three other hotel constructions, including the mega-project Cinnamon Life, which exceeds Rs.100 billion, for which around half the funds were raised through a syndicated loan in 2015.
The current Bentota Beach Hotel, a 4-star 133-key property will become a 5-star establishment with 150 rooms once it is reconstructed in two and a half years. The existing hotel, currently branded as Bentota Beach by Cinnamon, will close on July 1, 2017.
The Bentota Beach Hotel’s iconic central building designed by Bawa gives nods to both ancient Sinhalese architecture as well as the colonial Dutch fortification which had stood in the premises earlier.
The hotel was commissioned by the Sri Lankan government in the 1960s to replace an old rest house and was completed in 1969. The John Keells Group acquired the hotel in the 1980s from the government, and conducted major refurbishments in 1998.
The neighbouring Serendib Hotel, now named Avani Bentota and owned by the Hemas Group, was also designed by Bawa, who designed dozens of hotels, resorts public sector buildings, houses and educational institutes both locally and abroad.
KHL, which operates JKH resorts and non-city hotels in Sri Lanka and the Maldives, posted Rs.1.04 billion net profit for the Januyary-March quarter (4Q17), up 15 percent year-on-year (YoY), which helped more than doubling the net profit for the 2017 financial year (FY17).
Revenue for 4Q17 increased 5 percent YoY to Rs.3.79 billion, while cost of sales increased 12 percent YoY to Rs.1.02 billion. Although the slow growth in tourism arrivals to Sri Lanka during the 4Q17 resulted in a negligible revenue loss, leaner operations resulted in profits after tax (PAT) edging up to Rs.514.99 million from Rs.512.94 million YoY.
The Maldivian operations gained ground with PAT of Rs.512.49 million, up from Rs. 385.54 million YoY.
Net assets per share increased to Rs.17.02 from Rs. 15.72 at the start of FY17, while the asset base expanded to Rs.32.08 billion from Rs.28.90 billion as well. Net profit for FY17 increased 6 percent YoY to Rs.1.85 billion, while sales increased 6 percent YoY to Rs.12.31 billion, and cost of sales increased 10 percent YoY to Rs.3.77 billion.
JKH owns 80.32 percent of KHL shares while the government holds 10.88 percent of the shares through various state-owned institutions.