Singapore-based Calamander group has invested 20 million rupees to build a longest glass fronted pool, spanning 25 metres as its next stage of the reinvention of Unawatuna Beach Resort to Calamander Unawatuna Beach.
“There is no beach now in Unwatuna due to sand filling to the other side of the beach, hence the company is innovating within the "affordable luxury" segment maintaining to be the best 4-star hotel in Sri Lanka,” Calamander chairman Roman Scott told LBO.
Roman Scott also was critical of the new Land Law which prevented foreigners purchasing land in Sri Lanka saying that the Foreign Direct Investment would suffer because of the new law.
“Some policies can appear a little arbitrary and foreigner unfriendly,” he said.
The pool has been fabricated with a bespoke 48mm glass wall that has been tempered and laminated which creates an aquarium-like effect, allowing swimmers to view the azure blue Indian Ocean and spectators to view swimmers doing their laps or splashing around with friends.
Calamander had bought Unawatuna Beach Resort just off Galle in Southern Sri Lanka for around one billion rupees in 2011 and rebuilt it by investing 350 million rupees.
Sri Lanka has seen a surge in hotel investments after a 30-year war ended in 2009 and tourist arrivals started to pick up.
The 30-year old hotel has since been re-named Calamnader Unawatuna Beach Resort and refurbished to provide 83 rooms of 4-star standard accommodation.Scott said the company aims to grow 20-25 percent compound annual growth rate a year.
“Since the company is so young we need to grow aggressively,” Scott said.
“I am a great believer in scale. And I recognize that I remain a small player in Sri Lanka and all our other markets, competing against bigger, well capitalized local companies that have a fifty year or more advantage over me.”
“Note our growth target of 20 percent is for the balance sheet i.e. assets, like a bank, and not on revenue or profits.”
“This reflects my banking background. Since everything is reinvested at this stage of growth, profits are secondary to asset growth and scale.”
Challenges
Sri Lanka has about 16,223 formal sector rooms in 2013, a 10.3 percent increase according to 2010 data.
On the other hand, the number of supplementary accommodation rooms increased from 5,895 to 7,373 which is a 25 percent increase.
However, there are numerous unregistered accommodation units providing room facilities to tourists in Sri Lanka, while home stay also operated same time.
Despite the increasing tourist arrivals and tourism related servicers, the, Island faces a lack of labour in the lower level and in the management.
Calamander also suffered from the same issue Scott said.
“We are short of good staff on the hotel and coffee bean side, across all levels.”
“The issue has been with us from the start, is the tight labour market, rising wages, and the limited experienced management talent pool to draw from, as the country continues to lose a lot of talent to work abroad,” he said.
Added to that he said that the recent ban on foreign companies purchasing land made it almost impossible to grow on the hotel side.
“I had major investment plans. Building hotels requires land. Running hotels requires people. Both are problems. It's as simple as that,” Scott said.
“The new land law makes it very difficult for foreigners to invest here in sectors like hospitality, which require land to build.”
“I understand, and approve, of preventing the purchase of non-productive, non-employment generating residential land for private villas being bought by foreigners.
“But the nation damages its interests if it prevented genuine, bona fide proper companies, who employ and lot of people and pay significance taxes as we do, from building and operating productive facilities like hotels, factories, healthcare facilities, BPOs, shops, on lands purchased for this purpose,” he said.
“FDI will suffer.”
The Land Bill adopted by Parliament last month prohibited foreign individuals, companies and locally incorporated firms with over 50 percent foreign ownership from buying land in Sri Lanka, a move the government said would curb tax evasion.
The new act will allow foreigners to acquire land only on a lease basis of up to 99 years with an annual 15 percent tax on the total rental paid up front.
“I remain highly committed to Sri Lanka and I still love the place and the people, however frustrating it can sometimes be building a business here,” Scott said.
“I do have more grey hair than before I invested! But investing here has become more difficult for the reasons I said above,” Scott said.
“Some policies can appear a little arbitrary and foreigner unfriendly.”
“I remain one of the country's best friends and most ardent champions. But Sri Lanka doesn't always treat its best friends as well as it should.”
