Luxury hotel chain Ritz-Carlton has signed a management agreement with Indian real estate company Krrish on a $ 650 million hotel project in Sri Lanka’s capital, a top official said yesterday.

Titled ‘Krrish Square,’ the project will have four high-rise ultra-luxurious towers and will be envisaged as a vertical city. Three of them will house high-end residential apartments.
The fourth tower will be the tallest tower with 85 levels complete with a high-end retail complex, commercial office outlets and a seven-star hotel, which will be managed by Ritz Carlton.  “Krrish has informed us that they have tied up with Ritz-Carlton and we believe it will be to manage their hotel,” Investment Promotion Minister Lakshman Yapa Abeywardene told reporters.

However, the project has been dogged with controversy after the company repeatedly delayed lease payments to the Government, prompting the Investment Promotion Ministry to impose a 12% tax and threaten to end the contract. The agreement for the Krrish project was initially signed in August 2012 with the money to be paid in full by January 2013. Yet a final payment of Rs. 690 million ($ 5.3 million) is still pending, with the company assuring it will be handed over to the Government on 15 July. “If the payment is not made, then we will cancel the contract in September,” the Minister added. Nonetheless, he denied the delay of the project, which was initially expected to open in 2016, being a disadvantage to the Government, which owns the land. “We have made a car park into a money spinner,” he joked, insisting the Government had not made losses in the deal. Krrish is hoping to cash in on Sri Lanka’s lucrative tourism industry, which has boomed since the end of the three-decade war in 2009.

The Investment Promotion Ministry estimates 8,000 rooms will be added to the existing 24,000 by end 2015, creating sufficient accommodation for the 2.5 million tourists targeted by the Government in 2016. A second luxury hotel project by Hong Kong company Shangri-la in the southern Sri Lankan town is “70% complete” Yapa noted and likely to begin operations in early 2015. In the first six months of this year, a total of 727,353 tourists arrived in the island, marking a 24.6% increase from the 583,573 who visited during the corresponding period in 2013.
Most of the tourist arrivals were from Western Europe, with 223,810 tourists visiting in the first six months of this year recording a 17% increase over corresponding 2013 figures, the Sri Lanka Tourism Development Authority (SLTDA) said in its latest report on Wednesday.
Chinese tourist arrivals to Sri Lanka in the first six months of 2014 jumped a significant 137.2% to 52,230 travellers compared to 22,023 in the same period last year.
China remained the third largest market for tourists to Sri Lanka behind India and Britain, recording a 125.1% increase in June 2014 when compared with the previous year.
China remains the fastest growing market to the South Asian island, easily outstripping Indonesia at 76.9% and Russia, which grew at 74.8%, when compared with arrival numbers for the first six months of 2013. Sri Lanka’s tourist arrivals reached over 1.2 million last year and attracted earnings of $ 1.7 billion, according to the Central Bank. (UJ)

Source: http://www.ft.lk/2014/07/04/luxury-hotel-chain-ritz-carlton-ties-up-with-krrish/