Colombo: Aitken Spence & Co, Sri Lanka’s biggest operator of resort hotels, will focus on India, the Maldives and Oman to boost profit as escalating violence deters tourists from visiting the South Asian island.

Spence has added a fifth hotel after signing a contract to manage properties of Oman Hotels & Tourism Co in February, deputy chairman J M S Brito said in a telephone interview from the company’s Colombo headquarters.

Spence will be managing eight properties in India by the end of 2008, he said. “Our overseas ventures are proving to be very profitable and helping to wipe out losses at local hotels,’’ Brito said. “The losses in Sri Lankan hotels will only increase.’’

Spence and larger rival John Keells Holdings Ltd are investing in resorts in India and the Maldives to counter slowing tourist arrivals to Sri Lanka’s white-sand beaches. Sri Lanka on January 2 announced it’s ending a Norwegian-brokered 2002 truce with the Liberation Tigers of Tamil Eelam, saying the rebels used the cease-fire to rearm, recruit and prepare attacks.

Tourist arrivals in Sri Lanka dropped 12% to 494,008 last year as a result of travel advisories from European nations. Arrivals rose 0.7% in the first three months of 2008.

Spence said in February it will add 406 rooms to its portfolio by managing four hotels in Oman - the Al Falaj and the Ruwi Hotel in Muscat, the Al Wadi in Sohar and Sur Plaza in Sur.

The company, which relies on tourism for about 20% of earnings, had in 2006 signed an agreement with India’s Anant Raj Industries Ltd to manage a hotel in the capital, New Delhi, while seeking resorts to operate in Kerala, Tamil Nadu and the Andaman islands.

Spence, which runs beach resorts and a tea factory converted into a hotel in Sri Lanka’s hill country, also has five resorts in the Indian Ocean archipelago of the Maldives.

Keells, which runs nine hotels in Sri Lanka and five in the Maldives, has said it plans to invest $100 million building its first resorts in India.

Spence said group fiscal third-quarter profit rose 31% to Rs 34 crore ($3 million) in the period ending December 31.

Aitken Spence,which has added power generation and freight services to the marine insurance agency it started with about 140 years ago, has joined PSA International Pte to vie for a $400 million terminal to be built at Colombo, Sri Lanka’s biggest port.

The government said in March it’s scrapping bids for the 2.4 million-container-a-year facility at Colombo’s south harbour, and will call fresh bids with new terms in three months.

Brito said Spence will consider whether to resubmit its bid with the world’s second-biggest port operator depending on the new request for proposals. Spence currently runs a port efficiency and management service in Durban, South Africa.

“Operators looking outside will do well to diversify country risk,’’ said Vajira Premawardhana, head of research at Lanka Orix Securities Pvt in Colombo, who has a “buy’’ recommendation on Aitken Spence. 

“The company is one of the best managed and with its overseas expansion, the outlook for growth is excellent.’’ Spence has gained 35% this year, compared with a 4.2% rise in the benchmark Colombo All-Share Index.

Source : DNA