Hoteliers and restaurateurs in Negombo are being forced to rethink their business models as the global Covid pandemic impacts their major source of revenue—tourists. Negombo, a sleepy seaside fishing town only six kilometers from Sri Lanka’s main international airport, over the last two decades has emerged as a tourist destination appealing to several types of visitors.
However with the nearby Bandaranaike International Airport now shut for regular air traffic, Negombo’s ‘bookend’ trade—tourists who stay a night or two at the beginning and end of a tour of the island, and on which many small to medium properties depend—has evaporated. And for two of the biggest hotel operators – Jetwing group and the Aitken Spence group – who also cater for the normally lucrative MICE (meetings, incentives, conferencing and exhibitions) trade, the outlook for the rest of 2020 is bleak. Even before coronavirus, ‘bookend’ properties were being upended by the express highway between the airport, Colombo and points south.
The 260km journey time to the leopards of Yala National Park has been cut to around three hours, while Marissa, the über-popular surfing and whale-watching resort, and its neighbours are now just over two hours away. As a result, Negombo’s position and utility in the tourism map had been under strain for several years, and since the last link of an expressway network connecting the highway to the airport to the one going South was completed in November 2019, it’s become easier to ignore Negombo for the more picturesque beaches.
Colombo has also seen large scale hotel development. Due, in part, to the anticipated oversupply of hotel accommodation, local tour operators and DMCs (destination-management companies), may opt for putting up guests in Colombo reached in as little as 30–40 minutes. Negombo’s independent hotel owners wonder, if not most, of those foreign ‘bookenders’ were already bypassing Negombo, possibly never to return even when – the Covid global pandemic retreats.
Meanwhile, local lockdowns and quarantines made matters worse—Gampaha district, which includes Negombo, was a coronavirus hotspot – resulting in many hotel and restaurant closing. Negombo occupies a unique position in Sri Lanka’s pantheon of beach resorts. Originally a west-coast fishing village 35km north of the capital, it is also known as ‘Little Rome’ because of the striking number of its Roman Catholic churches.
The resort’s main features – and tourist attractions – include its lagoon and the Hamilton Canal, which runs through the centre of town all the way to Colombo. It was originally constructed to carry spices from the north of the country for export. As a major fishing port, Negombo has one of Sri Lanka’s biggest daily fishmarkets, with everything from prized tuna to sprats, prawns and assorted seafood destined for domestic and overseas tables, plus the local hotels and restaurants.
Of those latter, many are now in deep trouble. However a few restaurateurs managed to mitigate the lockdown crisis by starting local home deliveries, complete with special-value menus alongside their a la carte offerings. One such is Roy de Cruz, owner of Prego, generally considered to be Negombo’s best Italian restaurant.
He quickly re-engineered his website and Facebook page to focus on house-bound customers. After lockdown was lifted, he was also one of the first to reopen, even though he knew there would be far fewer, if any, sit-down customers, at least to start with. He says: “A top priority during lockdown was to maintain our brand awareness, to let people know we were still alive. “Our main focus was our pizzas—we have the only imported woodfired pizza oven in town—and together with our short delivery times, it proved more successful revenue-wise than I had hoped.
“Before reopening, we rearranged and reduced the number of tables to ensure social distancing, and we maintain a strict cleaning and sanitation regime.” He also has the benefit of Prego Suites, a range of accommodation above the restaurant that he hopes to leverage to attract more customers from Colombo and further afield.
“We hope to offer special deals that include dinner and an overnight stay, which means customers can relax and enjoy a few drinks without having to risk driving home the same night.” So far as the future of tourism in Negombo is concerned, he is not optimistic that it will recover to anything like its previous level.
“The highway was already an issue, and the coronavirus pandemic is badly affecting global tourism, including Sri Lanka, and may do so for years to come. “It is also badly damaging the economies of our main tourism markets—the UK, Australia and India, while China is another story altogether—which means that people will likely have less money to spend on foreign holidays.”
For Prego, a major source of lunch and dinner customers was the Aitken Spence-owned Heritance Negombo property just across the road. But with the hotel’s occupancy at 2 percent on a mid July date, as revealed by a staff member who did not want to be identified as he was not authorised to speak to media, and forward bookings for August and beyond “quite low”, it is not a source that Prego can continue to rely on. Striking features of Heritance include its 100-meter beach frontage, outsize twin entrance lobbies, barracks-like appearance, and a host of lifelike child statues in various poses—including one young boy gazing at the outside world through the bars of the hotel’s ten-foot fence.
Says Roy: “The bottom line is that the Negombo Tourism Association(NTA) and Negombo Hoteliers Association (NHA), as well as the individual businesses, are going to have to seriously up their game if Negombo is to survive as a tourist destination.” How likely is that? He paused for a moment. “Who knows”, he said. “But I hope so, for all our sakes.” The good news is that the current NTA president, 35-year-old Sawan Peiries, is also co-owner of King Coconut, a family restaurant which is weathering the storm better than most.
That’s because since relocating two years ago to its current prime beachside location, the restaurant has focussed on locals more than foreign tourists (now 60%–40% respectively), which is proving more resilient to the tourism downturn. He has background is in IT and business management, and a dual Sri Lankan-Australian citizenship, having lived in Australia for many years. His father was a bank branch manager here in Sri Lanka.
In February, Sawan gave a presentation to a group of visiting business students on how best to manage SMEs (small and medium enterprises), and the benefits of data-driven cost and margins management. Bottom line, he says, is that while revenue is down 60%compared to last year, and after having spent 12% of June’s gross on Covid-19 health-and-safety precautions, the restaurant still made a profit.
In other words, not your typical Negombo restaurateur. But that might change if, as he hopes, the NTA takes a more proactive role in helping upgrade what he tactfully describes as “the more traditional business approach favoured by many of Negombo’s SME hospitality offerings”. Will that happen? As with Roy de Cruz at Prego, he paused for a moment. “I hope so, but we’ll have to wait and see.”
Meanwhile, tourist resorts run on alcohol, and Negombo’s best known and most popular bar-restaurant is Rodeo, with its ten-foot cactus, cowhorns and ‘cosy’ bench tables, which is owned by local entrepreneur, Janaka Weeramanthri.
He too has seen a massive Covid19 tourist downturn, but was also quick to introduce home deliveries and refocus his marketing and social-media efforts to attract more local customers. Early on he co-owned a gem and jewellery shop with his father, and later invested in a travel and DMC business, complete with a fleet of coaches.
He is now capitalising on a growing lockdown-prompted home-cooking trend by opening a small plant-growing business producing potted herbs and spices, which he says is doing well. He adds: “It’s been tough, and will very likely get worse before it gets better. There are bound to be casualties, but thinking long term, that might not be such a bad thing.
“Negombo’s tourism businesses have been running on autopilot for too long, and this shake-out might be a wake-up call. Things must change—mindset, business strategies, everything—to cope with the harsh new realities.” An early headline casualty was Lords, a long-established and well-known fine-dining restaurant aimed squarely at tourists and foreign visitors, which is owned and run by British expat Martin Fullerton.
With its somewhat dark and gloomy daylight exterior and minimalist all-black interior, Lords Restaurant Complex, to give it it’s full name, has cultivated a 1960’s London demi-monde clubland ambience. Sadly for some, it has been closed since the pandemic first struck, and according to Fullerton, who is currently away travelling, it will remain closed for the foreseeable future, certainly well into next year, if not until next season.
In complete contrast, the nearby and wholesomely welcoming Dolce Vita beachside café restaurant has also reopened, much to the relief of locals and expats who like to breakfast on its fresh croissants, Danish pastries and excellent espresso. Run by its exuberant Italian expat proprietor, Andrea ‘O Sole Mio’ Frattini and his charming Sri Lankan wife Tanya, it has direct access to the beach from the main strip, which is much appreciated by locals and tourists alike. So far as Negombo’s hotels are concerned, things could hardly be worse.
Jetwing, one of the big two hotel groups in Negombo (the other being Aitken Spence) has three main properties, Blue, Beach and Sea. All are currently running at between 1% and 2% occupancy, according to a staff member at Jetwing group who did not want to be identified. August advance bookings for Jetwing Blue, which was operating as a quarantine centre up to July28, he quoted at 20% of the seasonal normal, and under 5% for two other hotels in Negombo.
He added that staffing is currently at the bare minimum required to operate at those levels, with additional staff on standby should the need arise.
Meanwhile, mid- and upper-mid-market independents have also been badly hit. One such is PledgeScape, which opened a year ago to much fanfare on one of the last available prime beachside locations. Built by Mahesh Fernando, owner of the Negombo-based Mahesh Corporation vehicle importer and dealership, it is now closed and seemingly abandoned. Fernando’s only previous experience of hotel ownership was the Pledge3 boutique property.
After a flying start four years ago it is managing to remain open, although in much-reduced circumstances. Another notable survivor is the St Lachlan. Tucked away behind the main strip, it’s a discrete smallish hotel that has a loyal clientele of locals and expats who live nearby.
Director Mohan Raj is determined to keep the property alive and kicking, and is now focussed on providing non-resident events such as wine-tastings, the recent first of which he was “extremely pleased with”. He says: “The situation is not good, no doubt about that, but with a bit of lateral thinking and entrepreneurial spirit we hope to maintain our reputation for great food, great service, and keeping our customers satisfied!”