Sri Lanka hotels dress up for post-war rush

Sri Lanka's hotel owners are racing to refurbish and add thousands more rooms as foreign holidaymakers pour into the country after the end of nearly four decades of ethnic bloodshed.

Leading hotel groups plan to spend millions of dollars on new decor and facilities for the influx of tourists drawn to the plentiful sunshine, beaches and tropical wildlife on the Indian Ocean island nation.

The ambitious expansion comes amid a post-war revival that has pushed up hotel room rates and given the hospitality industry something to cheer for the first time in years.

For once, after seeing tourists put off by violence and travel warnings from foreign governments, the industry says it is struggling to find places for the visitors, most of whom come from Britain, Germany, France, India and Japan.

"Hotels are overbooked, a 'problem' which our hotels have not experienced for a very long time," said Srilal Miththapala, who heads the Tourist Hotels Association of Sri Lanka.

Counting on this solid demand, many are now investing in new furniture, bars, restaurants, swimming pools and extensions.

Sri Lanka's tourist board expects the total number of hotel rooms to grow from about 15,000 now to 22,000 in the next two years.

In a sign of the changes underway, Sri Lanka's biggest leisure operator John Keells Holdings is partially refurbishing one of its flagship Colombo hotels, while two of its beach-front resorts are set for a complete facelift.

The group's resort in the eastern seaport town of Trincomalee, once a hotbed for Tamil Tiger rebels, will re-open in May as a retro-chic five-star hotel.

"With the war behind us, there is pent-up demand for a bit of luxury targeting well-heeled guests. We're very bullish," said its deputy chairman, Ajit Gunewardene.

The Tamil Tigers, who waged a 37-year separatist war of suicide bombings, assassinations and military offensives, were crushed by government forces last May, finally bringing peace to the Buddhist-majority nation.

John Keells, which owns seven resorts and two city hotels with 1,600 rooms, will spend in excess of 900 million dollars over three years to renovate and build three hotels, Gunewardene said.

Rival operator Aitken Spence Group says it is spending nearly 30 million dollars in the next year to spruce up properties and build three hotels in the island's war-torn north and east.

Shiromal Cooray, a director at the Jetwing Group which manages a chain of 10 hotels, admitted that significant improvement was needed because nearly half of the country's current hotel rooms are below so-called "star class."

Jetwing plans to spend more than seven million dollars this year to improve its properties.

Dileep Mudadeniya, who heads the Sri Lanka Tourism Promotion Bureau, says most hotels have been fully occupied in the past three or four months.

A key foreign exchange earner, the number of holidaymakers in February soared 68 percent to 57,300 over the same month a year earlier, according to tourist board figures.

"Forward bookings are encouraging," said Mudadeniya. "I was told that 20 to 30 hotels are closed for any new reservations till the end of March because they are fully booked."

The industry is hoping to attract 2.5 million visitors by 2016, up from 447,890 in 2009, the final year of hostilities.

It is also hoping to earn two billion dollars annually in tourist revenue by 2016, up from 350 million dollars last year.

The downside for holidaymakers is that the days of bargain hotel rates in Sri Lanka appear to be over.

A year ago, visitors could easily get discounts of 50 percent or more on advertised room rates.

"There are virtually no rooms in the southern resorts. Bookings are heavy," said Lakal Jayasinghe, who manages the Tangerine Beach Hotel, a deluxe beach resort in the south.

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