Hunas Falls Hotels PLC, a company controlled by the Hayleys and Jetwing groups has posted its third consecutive loss making year ended March 31, 2009 reporting a loss of Rs.8.9 million, up from a loss of Rs.6.9 million the previous year.
This was the highest loss posted by the company in the last eight years when it operated at a profit only on three years.
Considered one of the country’s most popular honeymoon hotels, Hunas Falls is located in scenic surroundings at Elkaduwa close to Kandy.
The company’s Chairman, Mr. N.G. Wickremeratne reported to shareholders that tourist arrivals into the country had dropped 12% to 435,000 last year with the tourism industry continuing to suffer from negative publicity and travel advisories due to the North East conflict with the global economic crisis too impacting on arrivals.
"A probable cessation of North-East hostilities in the short-term and the possibility that tourists may trade down under trying economic conditions to attractive value for money destinations, will favour Sri Lanka," Wickremeratne said in his statement written on April 23 before the war ended.
"The disruptions in competitor destinations such as Thailand will also have a positive effect on the Sri Lankan industry in the short-term."
The competitive advantage Sri Lanka enjoyed currently over similar long haul destinations could erode in the medium term as destinations such as Maldives offer competitive rates and increased capacity, Wickremeratne warned, saying that Sri Lanka will need to counter these developments.
While Hunas Falls turnover was up slightly to Rs.68 million from Rs.65 million the previous year the loss was up to Rs.8.9 million from the previous year’s Rs.6.9 million.
"The hotel maintains its position with tour operators and travel agents as an eco-friendly hotel and is very popular in the Sri Lankan market as a getaway for honeymooners. Consistency of service is a prime area we focus on and emphasize in our training and development program," the Chairman said.
Hunas Falls was focusing on growth markets such as the Middle East, Russia, India and China as well as on traditional European markets. There was a focus on web marketing and the use of payment gateways through which Hunas offers patrons very competitive rates.
The hotel had recently introduced a gasifier to reduce the usage of diesel and carbon emission in producing hot water when it won a Merit Award in the best Installation Category under the project for the Promotion of Eco Efficient Productivity.
With a stated capital of Rs.82.5 million and reserves of Rs.1.3 million, the company is currently carrying accumulated losses of Rs.31.1 million.
It carried a current liability of Rs.15.5 million on interest bearing borrowings and Rs.10 million non-current liabilities on the same account.
Carbotels, a Haycarb subsidiary is the biggest single shareholder with 46.89% followed by Mercantile Investments with 15.98% and Alliance Finance with 5.07%. Several Jetwing companies are also major shareholder with Mr. Hiran Cooray serving as Managing Director of the company of which Jetwing Hotels are the managing agents who were paid a hotel operating and marketing fee of Rs.2.3 million, up from Rs.2.2 million the previous year.
The Hunas Falls share commanded a net asset value of Rs.9.36 during the year under review, down from Rs.10.90 the previous year with the share traded at a high of Rs.36 and a low of Rs.15.25 during this period. This compared with a trading range of Rs.35 to Rs.21 the previous year.
The directors of the company are: Messrs. N.G. Wickremeratne (Chairman), N.G.H. Cooray (Deceased on 07.06.2008), N.J.H.M. Cooray (MD), V.K. Wicikremasinghe, R.A. Ebell, N. Wadugodapitiya and Ms. N.T.M.S. Cooray (w.e.f. 13.08.2008).