Hotel brands, infrastructure, and China and India as emerging tourist consumers were among the topics discussed by this reporter with an expatriate hotelier on Monday.
Karim Schadlou (41), Director Operations, Hilton Colombo Residence (HCR), of Iran-German mixed parentage, emphasizing the importance of good roads and of a good transport system, said that a tourist after a long flight won’t want to spend six hours on the road to get to his destination in the south from the Colombo Airport.
“Right now if Hilton did have a property in the south of the country it would have had been empty,” said Schadlou.
Sri Lanka, among the tourists, is identified for its beaches, wildlife and cultural sites, said Schadlou. Colombo is not the leisure traveller’s destination.
Schadlou who is from Southern Germany as an example said that SriLankan’s only German destination is Frankfurt, located in the West. To come to Sri Lanka, Schadlou takes a train to Frankfurt from his home, a three hour journey of some 3-400 kilometres. The flight from Frankfurt to Colombo takes nearly 11 hours. And another six hours on the road to a resort hotel in the South of Sri Lanka after landing in Colombo means that a tourist from Southern Germany would have had spent a whole day travelling, he said.
Sri Lanka gets its 3rd highest tourist arrivals from Germany.
The equivalent distance from Colombo to Kandy, some 115 km., in Germany’s autobahn could be done in an hour, but here it takes three hours, said Schadlou.
“Time is money,” said Schadlou, who said that he had previously served in Hilton properties in Thailand and Malaysia, but said that he has never experienced traffic congestion, the way it’s found in the island.
However, the move to provide a train service from Colombo Airport to Colombo Hilton is a step in the right direction, he said.
Hilton is looking for prospective investors in the leisure industry here, so as to manage their properties, thereby expanding their operations in the island.
The new markets are the Chinese and Indian markets, said Schadlou. “It’s not necessary to learn Mandarin or Cantonese to attract the Chinese, at one time the Japanese comprised the highest block of visitors to Sri Lanka, but that didn’t mean that there was a scramble by the locals to learn Japanese, he said.
On branding, Schadlou said that Hilton’s three properties in the Maldives are marketed by teams based in Europe in their payroll. The question is do indigenous brands have such resources to do their selling in international markets? asked Schadlou.
However, there is no specific marketing campaign for Sri Lanka per se, targeted by the Hilton Group as yet.
Hilton generally do not invest in hotel properties, but only manage those for a commission. In the case of HRC, they do get a commission on both the turnover and profits, the details of which he didn’t want to divulge.
Turn over made by HRC averages between US$ 6-7 million a year.
HRC which operates some 168 suites is enjoying an 89% occupancy, with suites on an average commanding a price of US$ 95 a night, up US$ 10, from $ 85 a suite a year ago.
“it’s a business hotel,” said Schadlou, with 50% of the guests staying from six months to a year, with rentals ranging from US$ 2½-3,000 a month, similar to that fetched by a luxury apartment.
The trend overall is very positive, he said.
But these prices are half that which Hilton commands in similar “residencies” operated in Abu Dhabi, where a suite is sold at some US$ 150-200 a night and peanuts compared to what their properties fetch currently in the Maldives, which period of time is specified as off season: $ 550-600 a villa in the Waldorf for a night, which comprises a total of 83 villas and rates going upto US$ 800 when the season begins next month. At present, occupancy levels in this hotel opened in March of this year is 70%.
Room charges at Hilton Maldives is $ 250-300 for a room, with such rates going upto $ 350 in season. Current occupancy levels are 90%, with Maldives overall enjoying a 55-60% occupancy at this time of the year, an off season period for this archipelago..
Among their recent clientele here, have been those from the Middle East and the Sri Lanka diaspora mainly from the UK.