Many small hotels in the southern coastal belt are approaching their bigger counterparts for management buyouts or part stake sales, as they struggle to fight escalating costs, overpricing and competition, industry analysts say.
“Most hotels are based on future earnings and valuations. Right now they are overpriced. Small hotel operators are finding it increasingly hard to operate with the high costs, and expensive rates. Most are for sale and some have approached larger hotel groups to either sell or part-sell their properties,” an industry analyst said.
He said that this includes boutique hotels and 3-to-4 four star properties in Wadduwa, Hikkaduwa, Galle, Thalpe, Ranna among other towns. According to industry sources, boutique hotels are being offered at as much as US$ 3 million for a 70 per cent stake. “Both locals and foreigners are seeing these properties and some sales are nearing completion,” an industry source said.
(Source: Sunday Times)
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