Ahead of the inaugural Asia Hotel & Tourism Investment Conference (AHTIC), taking place in Colombo at the end of this month, a study by STR reveals that Sri Lanka’s hotel market recorded strong overall performance growth through September 2016, driven by a sharp increase in average daily rate (ADR).
In year-over-year comparisons with the first nine months of 2015, Sri Lanka hotels reported a 15.0% increase in ADR to LKR15,806.02. Meanwhile, occupancy was relatively flat at 66.4%. As a result, revenue per available room (RevPAR) jumped 14.9% to LKR10,495.60.
As highlighted in Sri Lanka Tourism’s 2016 Strategic Marketing Plan, the country has a target of 2.2 million visitors for the total year, which would be a 26% increase compared with 2015. Tourism statistics show that the country welcomed 1.5 million visitors as of September, a 14.6% increase compared with the same nine months last year.
Boosted by the government’s efforts to increase international arrivals, Sri Lanka’s hotel demand (rooms sold) increased 4.0% as of September. Supply, however, also increased at a rate of 4.0%, and STR expects that supply will continue rising over the next two years with more than 4,300 rooms currently in Sri Lanka’s pipeline.
STR analysts attribute Sri Lanka’s recent boost in ADR to a changing hotel landscape in the market driven by recent openings of new Luxury properties. Additionally, more than 3,600 of the 4,300 rooms in Sri Lanka’s pipeline fall in the Luxury and Upscale categories, which should further lift the country’s ADR as more of the hotel rooms available will be sold at higher prices.
Jesper Palmqvist, STR’s Area Director Asia Pacific, said: “The market for hotel accommodation in Sri Lanka is decidedly healthy, with double-dight growth in occupancy for the past three years and this year, we have seen an uplift in average daily rates too.” At AHTIC, which takes place, November 27 – 29, 2016, at the Hilton Colombo, Palmqvist will give a detailed presentation on the demand for hotel accommodation across the region.