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Sri Lanka resort operators in Maldives seen facing more competition

Sept 06, 2010 (LBO) - Tourists arrivals to the Maldives, where two Sri Lankan conglomerates own or operate resorts, are recovering from recession but construction of more hotels is seen hitting room rates.
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China is the second highest tourism market to the archipelago so far this year with a 14.2 percent market share preceded only by the UK with a market share of 14.
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8 percent. Sri Lanka's Aitken Spence and John Keells Holdings had long relied on their Maldivian resorts to compensate for lower earnings or losses in their local hotels during the island's ethnic war.
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But earnings from Maldivian hotels were hit last year owing to global recession which reduced arrivals from the main market in Western Europe.

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Although arrivals from Europe are likely to be affected in the short to medium term by the region's economic woes, CT Smith Stockbrokers said in a report they expect this to be mitigated by increased arrivals from Asia, especially China.

In July 2010, Maldivian resort occupancy rose to 65.

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9 percent from 58.4 percent in July 2009, albeit off a low base.
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"Capacity in the Maldives is also expanding, as international hotel chains and the government have plans to open more resorts and hotels

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