Hilton signs landmark agreement

Hilton Worldwide (Hilton) signed an agreement with Hotel Developers (Lanka) PLC (HDL) for the management of the Hilton Colombo. The agreement reiterates that Hilton will continue to operate and manage the Hilton Colombo.

HDL Chairman, Thirukumar Nadesan said that he was happy to ink this agreement after a prolonged discussion and expressed great satisfaction that the new agreement would immensely benefit HDL in savings fees paid to Hilton and other tangible benefits such as reduced operating terms with options for renewal by mutual consent.

The new terms will be effective from June14, 2012. The savings on the total fees payable to Hilton based on the current year's forecast revenue and gross operating profits will be approximately Rs. 122 million. On an annualized basis the savings for an year will be over Rs. 250 million. The operating term of the new agreement ends on December 31, 2019 with extension by mutual agreement, more flexible than the provisions in the previous agreement which Hilton claims extends up to 2037.

“This agreement establishes our joint commitment to support and drive the growth of the tourism industry in Sri Lanka. Backed by Hilton Worldwide's expertise in global hospitality, we are confident that the country will continue to attract a growing number of domestic and international visitors,” Nadesan said.

“We are pleased to have reached an arrangement mutually beneficial to HDL, as the owners of the most sought after five-star property in Sri Lanka and Hilton Worldwide, the most prestigious Hotel Chain, to continue managing the Hilton Colombo,” said President, Asia Pacific, Hilton Worldwide Martin Rinck.

“Hilton Worldwide has been operating in Sri Lanka since 1987 and enjoys an excellent working relationship with HDL and the local community.

We remain totally committed to the market and firmly believe in the country's outstanding potential as a tourist destination and business hub,” he said.