Barbados-based Elegant Hotels Group made “solid progress” in an “increasingly challenging market” in the half year to March 31.
The current political uncertainty in the UK has led to a reduction in consumer appetite for luxury holidays, and publicity around the Zika virus has resulted in room cancellations and in substantial competitor discounting, despite the relatively small number of reported cases in Barbados, the company reported today.
“While such factors are clearly unpredictable, the group is hopeful that their negative impact will be relatively short-term in nature,” said the firm, which owns six hotels and a beachfront restaurant.
The company reported an operating profit up 2.6% to $15.1 million in the winter half year, based on a marginal 0.1% rise in revenue to $36.5 million.
A continued focus on cost control is planned in addition to exploring other ways of reducing costs “while not compromising in any way on the quality of its properties or customer service.
One initiative is to lower electricity bills by introducing more efficient air-conditioning units.
“However, central costs have inevitably risen due to the additional costs associated with being a listed company,” the half year results statement said.
Chief executive Sunil Chatrani said: “This has been a period of solid progress for Elegant Hotels and we were particularly pleased to complete our first acquisition since becoming a public company, in the form of Waves Hotel & Spa.
“The group now owns around 29% of the quality leisure tourist room stock in Barbados and our objective remains to continue extending this position while also expanding further into the Caribbean region.
“Whilst there are currently a number of challenges that are impacting the trading performance of both Elegant Hotels and the wider luxury hotel market in Barbados, we continue to be confident in the group’s long-term growth prospects.”
His comments came against a backdrop of a 3.7% decline in demand for luxury accommodation on Barbados while overall arrivals increased by 7.4%, according to official figures. Most of the growth came from villa rentals and the lower end of the hotel sector.
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