Wealth Management company hunts for hotel investments in SL | Sunday Observer

Wealth Management company hunts for hotel investments in SL

4 December, 2016

‘Properties need upgrade to improve margins’

Sri Lanka offers much potential for investors in tourism but its hotels need better marketing and upgrades to make the profit margins that would attract foreign private capital, said Chairman of East India Capital Management, Simon Hopkins.

“We are talking to locals, capital starved owners who have land and assets but which need to be upgraded,” he told the first Asia Hotel and Tourism Investment Conference (AHTIC) held at the Hilton Colombo in Sri Lanka last week.

“I feel Sri Lanka has a fantastic opportunity vis-a-vis Europe. For winter sun destinations where do people go? Not to West Africa or North Africa because of the problems of Islamic extremism, not to the Caribbean because of the zika virus issue,” he said.

In terms of time zones and long distance flights routing through the Middle East Gulf region, Sri Lanka will continue see passenger numbers growing, said Hopkins, whose Singapore-based EICM is a private wealth management affiliate of Milltrust International Group, an international asset management group that invests in emerging markets’ hospitality assets.

Hopkins founded Milltrust International in 2011, focusing on investment management in emerging markets. East India Capital Management manages assets for entrepreneurs and families in businesses across the world with investment vehicles to control and develop hospitality assets such as hotels, resorts, and serviced apartments in the Maldives, Sri Lanka, Mauritius, London, Paris, and New York.

“The problem is the product offering and that’s the opportunity for us in Sri Lanka. If you continue to cater to bus loads of Thomsons tourists, who stay in three-star resorts, the same way as the Chinese, you are not going to make the margin,” Hopkins said, referring to the British tour operator offering cheap holiday packages. “This is a part of the world that needs to upgrade.”

Sri Lanka has been a traditional destination for British tourists for generations and throughout its ethnic conflict, Hopkins told the AHTIC, which was held in partnership with the Sri Lanka Tourism Club (SLTC).

But Sri Lanka’s tourism industry and government need to do more to market the destination better, he said, saying that good branding has drawn huge numbers of tourists to places such as the Maldives and Bali in Indonesia. “The Maldives and Sri Lanka are very different markets,” Hopkins said. “Maldives has a proven product, an institutional product – all of major operators are already on the ground and it continues to deliver growth. It has a diversified international market – the Middle East, Russia, Europe, and now increasingly from China.” “But the branding of Sri Lanka is weak. Branding is important,” he added, outlining the success of Bali, “a far more remote destination, but with similar topography, culture, and climate,” he said. Bali got 2.27 million international visitors in the first half of this year, hitting a new record and up 19% over the corresponding period of last year. The AHTIC attracted an international audience of senior figures and decision-makers involved in hotel and tourism investment in South Asia and the conference focused on hotel development and infrastructure plans in these markets.

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