Hearty congratulations to the CEO, Sunil Chatrani and his team at Elegant Hotels Group plc on their latest results for financial year ending 30th September 2015.
Included in the highlights is overall revenue up 4.3 percent to US$60.1 million, RevPAR (revenue per available room) up 4.9 percent to US$255, ADR (average daily rates) up 5. 7 per cent to US$373, Adjusted operating profit up 15.7 per cent to US$19.2 million
, Adjusted EBITDA (earnings before interest, taxes and amortization) up 12.7 per cent to US$22.2 million, Adjusted EPS (earnings per share) up 15.7 per cent to 14.7 US cents per share and Net debt down 61.2 per cent to US$40.8 million.
What is perhaps especially remarkable is that this improved financial performance has been achieved without the unilateral extraordinary tax and other concessions which were granted to other competing accommodation provider on Barbados.
Commenting on the results, the CEO is quoted as stating ‘Although the occupancy at our hotels has remained relatively stable, we have seen a strong period of growth in tourism arrivals’. ‘Adding ‘After a number of years of relatively stable visitor numbers, the total number of tourism 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. We believe this 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. There may also be demand over from some competing winter-sun destinations in North Africa and the Middle East, due to ongoing instability and uncertainty of some of those destinations’.
Mr. Chatrani also pointed out what is often overlooked ‘Increased demand can drive Group profits even if there is little change in occupancy. Higher demand allow us achieve better yield by increasing headline prices or by reducing discounts’.
As the largest private sector owner of hotel rooms on Barbados, Elegant’s continued success is good for the entire hospitality sector here. And while the majority of their five hotel’s room stock operate on an all-inclusive basis, there is a secondary spread over benefit from any additional guests for our car rental companies, activities, attractions, shopping and even off-property dining experiences.
Since floating the group on the London Stock Exchange seven months ago, the share price has risen 15 per cent and as I was quite rightly reminded, not bad for a Barbadian based company with one ‘expat’ out of over 900 employees.
While it is a company objective ‘from which to grow and expand, both organically and through acquisitions in Barbados and the wider Caribbean’, hopefully they will be able to do that, at least on Barbados, while being forced to compete with no or reduced tax competitors and low interest Chinese funded, but state driven alternative accommodation offerings.
Ultimately, it will be absolutely critical to our economic survival that we have a viable private sector led tourism industry.