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Editorial

November 25, 2007  Volume 14, Issue 23


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Minimum 5 Star hotel room rates in Colombo

Hilton highest at $ 105; Galadari, Continental lowest at $ 65

The onus of charging the "minimum highest" hotel city room rate falls on Colombo Hilton in a move that comes into effect next year to prevent under-cutting among hoteliers.

Colombo Hilton, categorized as a five star hotel will have to sell their rooms at US$ 105 net of taxes and other charges for a day in this industry driven initiative. It comes under the first rate band under this category.

This hotel until a few months ago had been selling their rooms at between $ 60-70, it has been reported.

Meanwhile, the five star John Keells Holdings (JKH) controlled 500 room Cinnamon Grand Hotel which comes second under this grading system (because it does not belong to an international chain of hotels unlike Hilton) will have to charge a minimum room rate of $ 90 net of taxes and other charges under this scheme.

In the third band comesTaj Samudra and the other JKH controlled city hotel, Trans Asia, which will have to charge minimum room rates of $ 75 each. Both Taj and Trans Asia Hotel also come under the five star category.

Trans Asia currently charges $ 65 for a room, inclusive of breakfast and enjoys a 70% occupancy. Its General Manager Neroy Marso told The Sunday Leader that it was expected to enjoy a 100% occupancy in the first half of next month coinciding with the English cricket tour.

City hotels, in good times and bad, mainly cater to the corporate clientele and therefore generally enjoy fairly good occupancy rates, he said.

"What we are missing out however is the leisure traveller, who, on his way to the resort, stops in at a city hotel, and, when leaving the country, again checks in at a city hotel before taking his flight back home," Marso said.

And as our clientele is mainly the corporate sector, the hotel starts emptying itself after December 15, with this sector going back to their homes overseas for the Christmas vacation, and those numbers once again picking up from January.

He said that their topline was flat, ie, in the six month period ending September 30, 2007, when compared with the corresponding period the previous year. Trans Asia, in order to make the numbers, until recently were selling their rooms at a discounted price of $ 55 to locals.

Meanwhile, under this new minimum room rate system, the last of the two five star hotels in the city, namely Ceylon Continental and Galadari Hotel will have to charge a minimum room rate of $ 65 from next year.

Hotel sources said that the second tier hotels in the city, such as Galle Face Hotel, Holiday Inn, Renuka and Sapphire too have minimum rates fixed under this scheme, which, however are lower than what have been prescribed for the five star categories.


JKH supermarket chain enjoys double digit growth

John Keells Holdings' (JKH') supermarket operations which has been experiencing double digit growth in both their topline and in their bottomline in the six months ended September 30, 2007 when compared with the corresponding period the previous year, plans to add four more supermarkets next month.

"We shall be opening these outlets at Kurunegala, Pepiliyana, Mahabage and Attidiya," JKH Assistant Vice President and Head of Human Resources-Retail Sector Nilush Cooray told reporters on Thursday.

"In fact Kurunegala will be our first outlet outside the Western Province," he said.

The company currently operates a chain of 28 supermarkets, providing employment to 1,365 persons. The company targets to have a total of 50 supermarkets by the end of next year.

Nielsen, a market research company, in a recently released report said that 14% of grocery sales in Sri Lanka were derived from supermarkets last year, up 1% over the 13% in 2005.

Traditional groceries still have a huge 86% chunk of the market.

Nielsen however said that traditional grocery outlets declined by 2.47% to 102,382 last year (over 2005), while the number of supermarkets in operation in the period under review increased by 10.4% to 360.

The report identified Cargills, Keells, LAUGFS, Kings Super, Lak Sathosa, Arpico and Phulyaya as supermarkets.

It further said that in 2006, the number of Cargills outlets increased by nine (over 2005 figures) to 94, Keells-from 15 to 21, LAUGFS-from eight to nine, Kings Super from six to 10, Lak Sathosa from five to 28, Arpico from four to six and Phulyaya from three to four.

Cooray said that an employee in their supermarket could earn upto a maximum of Rs. 9,000 a month. That includes a basic salary of Rs. 5,000; allowances of Rs. 2,000 and a sales bonus of Rs. 2,000.

The company on Thursday tied-up with the government run vocational training institute NAITA to train youth between 17-23 years to be salesmen and women in the supermarket industry. The programme includes an 100 hours learning programme in English.

"We have found that English is essential for this type of business," Cooray said.  "And not only that, there is a huge demand for supermarket salesmen overseas, therefore this qualification will help our youth to find jobs overseas," he said.


Poor pass rate linked to poor English

The development of the business process outsourcing (BPO) industry has created a demand for accountants, John Keells Holdings PLC (JKH) Group Financial Controller M.J.S. Rajakariar told reporters on Wednesday.

He said that JKH which operates a BPO centre in India, plans to launch a similar centre in Colombo.

Opening of such BPO centres mean that accounts of a company in the USA may be sent to Colombo for processing because of the relatively cheaper labour available here.

Companies such as Amba Research and WNS are some of the more famous BPO operations here, catering to the accounting needs of clients in First World countries.

It was the advent of the internet that spurred the BPO industry."But a chief drawback in churning out an adequate supply of accountants to meet the demand is the inadequate knowledge of English by students here," Institute of Chartered Accountants of Sri Lanka (ICASL) President Yohan Perera said.

To address this problem, ICASL has started an "English lab," he said. ICASL allows students to sit the first two papers in the vernacular, but the final two papers followed by the "case study" have to be done in English.

As a result of the poor knowledge of English, the pass rate at the finals were a low 30-35%, with around 1,000 students sitting for the ICASL finals annually."But at the case study level, after passing the two final papers, the pass rate is a high 80%," said Perera. Around 250 students pass out annually as accountants after successfully getting through the final hurdle, the case study tests.


Strengthening Colombo's hub status

MCC Transport, a common carrier container feeder company is to start its maiden service in the South Asia region, said a statement.

With a volume of five million twenty foot equivalent units of containers (teus) expected to be handled in 2007, MCC would be the world's 2nd largest feeder company growing at a fast pace. In keeping with their growth strategy they have entered into South Asia region with Colombo as the hub.  MCC Transport is fully owned and backed by the strengths of A.P. Moller Group and caters to multitude of connections for its customers in various hubs.

 The service termed "BAN3' on a weekly fixed day basis will cover Colombo-Chittagong sector which has seen tremendous growth in volume in recent times. The inaugural call is due in Colombo on Wednesday.

MCC had hitherto been active in South East Asia, connecting Vietnam, Cambodia, Indonesia, Philippines, Thailand and more recently China with the hub ports in Malaysia, Singapore, Kaohsuing and Hong Kong.MCC Transport is represented in Sri Lanka by Maersk Lanka (Pvt) Ltd.


Security for airports

The latest US airport to consult with Israel on security policies and procedures is Denver which is conducting an operations review in anticipation of rapid growth. Denver has issued more than $1 billion in bonds to fund expansion projects through 2013, including the addition and reconfiguration of security lanes. In Israel, unmanned ground vehicles (UGVs) equipped with weapons and cameras have begun to assist jeep-mounted security personnel in their patrols of the perimeter fence at Ben-Gurion, reported Haaretz.

(Washington Aviation Summary)


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