Barbados’ tourism rebound has had a positive ripple effect on the bottom line of one of its largest hotel operators.
Elegant Hotels Group plc, which owns and operates five properties whose 483 rooms are about a quarter of the island’s hotel room stock, is reporting a near $20 million pre-tax profit and getting ready to cash in one what is expected to be a strong 2015/2016 winter season.
The group, which also owns Daphne’s Restaurant, ispressing on with plans to add to its holdings here while expanding into the Caribbean.
Elegant’s results for the financial year ended September 30 were released last week on AIM – the London Stock Exchange’s sub-market for smaller companies – where it is listed, coinciding with the beginning of the new winter season.
The results, which included revenues of $60.1 million, have pleased the group’s chief executive officer Sunil Chatrani.
“This has been a landmark year for Elegant Hotels. We achieved strong revenue and underlying profit growth, and demand for Barbados as a tourist destination remains buoyant, with arrivals and flight capacity both continuing to improve,” he said.
“The group’s admission to AIM in May has provided us with a great foundation from which to grow and expand, both organically and through acquisitions in Barbados and the wider Caribbean. The year 2016 promises to be one of further significant development, and we are excited about the future prospects for the business.”
Elegant operates Colony Club, Tamarind, The House, Crystal Cove and Turtle Beach hotels. Officials said they were able to boost earnings by 4.3 per cent largely through “our strategic focus on driving rates while holding occupancy levels relatively stable”.
“Average daily rates (ADR) have grown by 5.7 per cent from $353 in 2014 to $373 in 2015, while occupancy has remained at circa 68 per cent across both periods. Increases in ADR attract little incremental cost so conversion to profit tends to be stronger than that of revenue growth from higher occupancy,” the company said.
“Although the occupancy at hour hotels has remained relatively stable, we have seen a strong period of growth in tourist arrivals to the island of Barbados. After a number of years of relatively stable visitor numbers, the total number of tourist arrivals for 2015 up to the end of October has grown by almost 14.7 per cent. Arrivals from the UK and the United States, which are the key markets for customers in our hotels, have risen by 12.7 per cent and 28.2 per cent respectively.”
This, they added, “reflects the recovery in both of these economies, with a delay of around six months due to the lead time in booking long haul holidays to the Caribbean”.
It believed that another factor was the likely shift in demand “from some competing winter-sun destinations in North Africa and the Middle East, due to the ongoing instability and uncertainty of some of those destinations”.
Noting that this customer demand was supported by increased airlift, Elegant noted that “increased demand can drive group profits even if there is little change in occupancy”.