A stabilisation of the luxury hotel sector in Barbados helped Elegant Hotels Group to achieve a “solid” winter performance.
The owner and operator of seven upscale freehold hotels and a beachfront restaurant on the island saw adjusted pre-tax profits fall by 7% to $11.4 million.
However, revenue was up by 8% to $38.8 million in the six months to March 31 with average daily rates rising by 2% $433 and occupancy up one percentage point to 67%
Adjusted earnings [Editda] edged up by 1% to $15.4 million.
The UK remains the group’s primary market, accounting for 72% of room nights
The winter period saw a 6% increase in capacity to 588 with the opening of the 35-suite Treasure Beach hotel.
Construction of Hodges Bay Resort in Antigua, the group’s first management contract and its first hotel outside Barbados, is nearing completion.
A newly revamped website forms an important aspect of the group’s direct market strategy.
Direct bookings increased to 23% from 22% in the same period a year earlier.
The website acts as an information portal for customers which will ultimately be converted through the group’s reservation team, the company said.
The group “continues to assess a range of further expansion opportunities, both on and off island”.
This includes both further management contracts as well as “the selective acquisition of undervalued and underperforming assets”.
However, the company added: “As announced in January, the board was previously at an advanced stage of discussions with one particular opportunity. However, it subsequently decided not to proceed with a formal offer having concluded that the transaction would not be sufficiently value-enhancing for the group.
“This reflects the board’s determination to maintain a rigorous and disciplined approach to assessing possible acquisition targets.”
The group aims to boost the profitability of several of its hotels through selective refurbishments. Some were last refurbished up to seven years ago.
Elegant Hotels chief executive Sunil Chatrani said: “We are pleased to have delivered a solid financial and operational performance in the first half of the financial year.
“The high end hotel market in Barbados appears to be stabilising after several challenging years, and we have a strong pipeline of bookings for the remainder of the financial year.
“As a result, we remain comfortable with the full year 2018 outlook versus market expectations and confident in the group’s longer term prospects.”