Sri Lanka Aitken Spence to run Oman hotels

Sri Lanka's Aitken Spence, a top leisure group that also runs resorts in the Maldives and India, said it had inked a deal to operate four hotels of Oman Hotels and Tourism Company (OHTC).

Al Falaj and Ruwi Hotels in Muscat, Al Wadi in Sohar and Sur Plaza in Sur would add 406 rooms to its portfolio, the company said in a statement.

The properties are now managed by OHTC.

"Aitken Spence will be submitting a plan to the board of OHTC to improve the four properties and to position them to exploit the emergent tourism climate in the region," Aitken Spence chairman Harry Jayawardena said in the statement.

Aitken Spence, a part of Jayawardena's Stassen's group, says it was the first Sri Lankan hotel company to enter the Maldives in 1993 and India in 2007.

In first half of the current financial year most of Aitken Spence's leisure profits came from Maldives and it lost money in Sri Lanka which has been hit by an internal conflict. December quarter numbers are expected any day.

In India the group already runs two hotels under management contracts and five more are due to start.

"Management contracts are probably the best way to approach a new market," says Channa Amaratunga of Boston Capital, a boutique investment house.

"You don't have the burden of ownership, so the return on equity is high. Middle East is one of the fastest growing markets in the World."

In a report last month the World Tourism Organization said Middle East tourism grew 13 percent in 2007 with 46 million arrivals despite conflicts, followed by Asia-Pacific which grew 10 percent and Africa 8 percent. Saudi Arabia and Egypt led the growth.

"Given the buoyant economic conditions and the importance given to hospitality industry by the Government in the Sultanate, our company sees a bright future in the coming years," M Hameed, chairman OHTC was said.

"In order to optimize the economic yield from these opportunities and to professionalise its service offering, our company has entered into a management agreement with Aitken Spence to manage its four properties."

Aitken Spence runs operates 10 resort hotels in Sri Lanka. It says it is the fourth largest in the Maldives with eight resorts operated under the Adaaran brand.

The company's premium grade resorts operate under the brand Heritance.

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