Financial Times - Spence hotels in huge investment drive

Aitken Spence, unlike most in the tourism and leisure industry, is not only upbeat about the future of tourism in the midst of a security crisis but is also investing millions of rupees into new projects including a hotel school, a boutique hotel with an international operator and actively pursuing a hotel development in Colombo.

“No, we are not looking at any existing properties in Colombo but strongly considering a hotel which will supplement our resorts and assist the travel arm of the company,” said a buoyant Malin Hapugoda, Managing Director of Aitken Spence Hotel Holdings (ASHH).

Asked whether the company was interested in the Hilton, Hapugoda said, “not really …it has a lot of debt.” “I am absolutely confident this war will end in three months and peace talks will be back on track. This has to happen,” Hapugoda said when asked whether the time was ripe for the group’s extensive investment plans.

The group which recently invested US$18 million in refurbishing its former Triton hotel property and Kandalama and re-launched Triton under its new brand, Heritance Ahungalla is investing in a hotel school at Ahungalla aimed at alleviating poverty in the area and providing training opportunities for unemployed youth; and creating the Evason Hideaway Resort at Ahungalla in a joint, 50-50 collaboration at a cost of US$ 20 million with the world famous Six Seasons chain that would have 14, 2-room super luxury beach villas and 40 spacious garden villas, and a spa. The new property will jointly be run by Aitken Spence and Six Seasons and ready for occupation by early 2008.

The hotel school, the first mega-sized initiative by the private sector outside Colombo, is what the company describes as a “humanitarian task and a joint venture with Hilfswerk Austria, a non profit organization, which provides assistance in educating underprivileged youth and children among many other aid packages in many parts of the world.”

It will cost Rs 48 million and is a social responsibility project aimed at developing vocational skills of the youth in the area. Hapugoda said students will be charged a nominal fee for theory and practical lessons to cover the cost of operations with any shortfall being met by the company. There will be four basic level courses in cookery, house-keeping, reception and F & B services. Those who pass out will be able to seek employment any where in the country including hotels run by the company. Training in banqueting will be provided at Waters Edge Colombo city, which is very popular among MICE clientele.

Initially the intake will be limited to 100 students of which 30 will be residential. A two acre block of land has already been purchased in Ahungalla. The total floor area of the school will be 14,585 sq. ft comprising lecture rooms, auditoriums, restaurants and other facilities. Workers for the project will be recruited from Ahungalla.

A company statement said the majority of the population in Ahungalla has no formal employment; some are employed in the agricultural sector specially in cinnamon estates while 25 – 30% are below the poverty line and depend on government welfare benefits. About 5 -10% of the population has no proper housing facilities. Unemployment is high especially among educated youth. Per capita income is less than Rs.2,700 per month as against the national average of Rs. 4,326 per month.

The hotel company in the meantime is rolling out its ‘where tradition comes alive’ Heritance brand which includes Kandalama (from Friday it was known as Heritance Kandalama) and, subsequently, the Tea Factory. “These three hotels are unique and different in character. The Heritance brand in fact will bring tradition alive in the hotel with a flavour that is unique to that region, that town, that village,” Hapugoda said.

Company officials said the cuisine would also reflect the environment, the surroundings. For example, the Tea Factory hotel will reflect the tradition of tea and estate culture where visitors are greeted with a ‘pottu’ while the Heritance Ahungalla brings alive the sea, the fisherfolk the beaches.

Kandalama has the traditional village meal –ambula - on the half cave-half rock formation outside the restaurant in addition to the Kashyapa theme dinner.

The company has also re-fashioned the Golden Sun at Wadduwa as a Ramada Resort and opening in November after entering into a franchise agreement with the international hotel operator. This is primarily aimed at the Asian market, mainly Indian tourists, wo prefer familiar hotel brands and hotels is closer to Colombo, Hapugoda said.