Shangri-La Says Sri Lanka Hotels To Cost More

February 27, 2012

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Hong Kong-based Shangri-La Asia said the cost of building two new luxury hotels in Sri Lanka has risen 10 percent to USD$550 million.

"The cost has slightly gone up. Between the two projects it's about USD$550 million," chief financial officer Madhu Rao told reporters after the groundbreaking ceremony for the start of work on its planned 661-room hotel in Colombo.

He said the higher cost was because of last-minute design changes.

"It will take about three years to finish," he said, adding that the Colombo development will include shop units, apartments and conference facilities. That puts completion in 2015, instead of the originally planned 2014.

Shangri-La Hotels and Resorts initially planned to spend USD$500 million on the Colombo project and another 315-room hotel in the southern district of Hambantota.

Since the end of the civil war in 2009 Sri Lanka has attracted USD$1.2 billion in tourism investment, including from Shangri-La, and is targeting USD$3 billion by 2016 due to a post-war boom in tourism.

(Reuters)