Lanka firm plans $100mn India resort spend

Sri Lanka's biggest hotel chain John Keells Holdings plans to invest $100 million to build resorts in the Indian states of Goa and Kerala.

John Keells, which runs nine hotels in Sri Lanka and five in the Maldives, hopes to develop three properties in India, the group's deputy chairman, Ajit Gunewardena said.

"Unlike the Maldives, at the moment, Sri Lanka doesn't look too good for us, because of the security situation," he said.

Gunawardena says the Indian investment is part of the group's strategy to foray into South Asian markets. "South Asia has growth opportunities and we want to extend our hotel footprint into the region".

In August, Aitken Spence, Sri Lanka's biggest resort operator, announced plans to raise up to $10 million in India, with its partner Floatels India, to fund new hotel projects in Kerala.

Arrivals to Sri Lanka have dropped 12% to 38,815 as an escalation in violence between the government and Tamil Tiger rebels keep holidaymakers away.

Officials say local hotel occupancy has slumped to about 30%, in what used to be the beginning of the highly profitable winter season.