Serendib Leisure takes on boutique villas

The lack of a coherent tourism strategy, better brand positioning or creative destination management haven’t deterred this company from reaching higher or marching on

Serendib Leisure is quietly setting the industry standards by doing what they do best. Some may say they have the Midas touch when it comes to managing boutique villas or their foresight approach in all matters is worth trusting and paying for. The new Hemas Leisure, Travel and Aviation Sector is led by a team comprising Managing Director of Hemas Leisure, Travel and Aviation Sector Malinga Arsakularatne; Chief Operating Officer at Serendib Leisure Management Limited Shantha Kurumbalapitiya; Director of Industry Relations & Business Development at Hemas Leisure, Travel and Aviation Sector Harith Perera; and General Manager of Boutique Hotels & Villas at Serendib Leisure Management Limited Himaj Jayasinghe.

What’s your overview of Sri Lanka tourism at present? Both in terms of growth over the years and the country’s expected tourism numbers?
Since the war ended in 2009, Sri Lanka has continued to witness an increase in arrivals. All throughout, it has been two-digit growth, and we are expecting the same this year. Although there was a dip in October, November has been positive. Regarding the industry we are seeing positive results in arrivals. However, the growth aspect and parity between the formal and informal sectors has been alarming. The government will also not benefit owing to the negative impact on revenue due to the informal structure of this sector.

There are a lot of challenges due to new developments and trends in the tourism industry, so the SLTDA needs to rethink the entire strategy, Acts and regulations placed. We are still looking at the old model of Sri Lanka tourism and at the old tour operator mentality whereas tour operators in the rest of the world have evolved. This will make keeping pace with emerging trend globally a challenge. On the supply side, with growing demand, we see accommodation supply growing in various vectors, like boutique villas, Airbnb-type accommodations, budget stays and hostels.

What do you think are key emerging trends for Sri Lanka as a destination?
Sri Lanka continues to be a dominating beach product with culture, history, wildlife and adventure contributing to the country’s product offering. However, since of late, there has seen noticeable growth in demand for experimental and wellness tourism.

Another visible trend is that families with children are slowly starting to travel to Sri Lanka, for which the hotel sector has responded proactively by increasing their inventory of interconnecting rooms. Sri Lanka was previously known to be a country popular among the elderly, retired or semi-retired folks. However, this has drastically changed as we see a massive influx of young backpackers and travel enthusiasts visiting the country. With regard to the villa sector, this segment of accommodation providers are currently experiencing an increase in demand from travelers who usually book traditional hotels.

What are the challenges you see for Sri Lanka as a destination on a global scale?
The lack of global destination marketing is a major setback to the country as we haven’t been able to position ourselves well enough against the rest of the world. This country has so much to offer and we still haven’t been able to give Sri Lanka the exposure it truly deserves.

Being a 99% private-led industry, it’s vital that the formal sector works hand-in glove with the government, which is the regulatory body. The private sector has gone to great lengths to better the product offerings, which has resulted in higher prices being charged. However, this does not necessarily mean that service standards have matched the price that customers pay.

Sri Lanka being positioned as a country that is pocket-friendly may not still stand in this day and age; thus, it’s a challenge to change this mentality that has been around for years. Another challenge is the cost. With the ever-rising taxations and dollar rate, the selling price is becoming more expensive. The price is more or less like the prices you pay in Singapore.

What are the challenges for Sri Lanka tourism regionally?
When comparing Sri Lanka to Thailand or Bali, among various challenges, the cost of owning and running a hotel is very high. The cost of construction in Thailand is almost as much as 35% lesser than in Sri Lanka.

With tourist arrivals of 2.4 million people instead of 25 million like Thailand, we are in a good place to maneuver and change the country’s positioning strategy, product offering and pricing if and when necessary. Thus, it is an ideal time to carve our blueprint now or take it as it comes.

Tell us a bit about Hemas Holdings.
Hemas Holdings is one of the top listed conglomerates on the Colombo Stock Exchange. The thinking behind forming of the LTA sector is that it has four different businesses under it: hotels, inbound travel, outbound travel and airline representation. This sector was formed in 2016 when these industries were all growing. The board and group CEO of Hemas formed this with a mandate of growing this sector exponentially as it’s the smallest sector in the entire group. With many related businesses being run independently, this sector broke this cycle and got them to work together to develop better offering for customers. That would lead to much higher growth. We are regionally present in Thailand and the Maldives with hopes to increasing our footprint further.

With tourist arrivals of 2.4 million, we are in a good place to change the country’s positioning strategy

What are your properties in Sri Lanka at the moment?
We own four properties – Club Hotel Dolphin, Hotel Sigiriya, Avani Bentota Resort and Lantern Beach Collection – and manage Avani Kalutara Resort and Villa 700. Lantern and Villa 700 are boutique properties, while the others are resorts. We have also partnered with Minor International of Thailand for the Avani and Anantara hotels in Sri Lanka.

What learning has the SLML team gathered so far with 30 years of experience?
The key thing about managing these brands are international sales/marketing expertise, delivering expected service standards, giving shareholders a return on their investment and community engagement. We emphasis a lot on service delivery by continuously monitoring our service levels through various feedback, audits and other tools.

What is the opportunity in the boutique villa market segments?
If you analyze the accommodation trends of the modern traveler, there is a tendency to move away from large resorts and indulge in more intimate and unique experiences by staying in boutique villas. The bigger you are, the more difficult it is to personalize.

We now see that more people were willing to pay a higher price to stay in a smaller hotel. Boutique hotels started emerging in the Sri Lankan market in the early 90s. Since the war ended in 2009, this niche market has grown tremendously.

What’s your unique selling point for an owner looking for a management company?
We have a professional team geared to handle all requirements of the villa sector. This is the key element of our success. With the backing of Serendib Leisure, who has been in the business for the past 30 years, we have the required support in terms of international exposure in sales and marketing, procurement advantages, HR/Finance functions and other operational support.

How do you see Sri Lanka tourism developing over the next five to ten years, and what part do you see Serendib Leisure playing?
The outlook for Sri Lanka Tourism is very positive, but we don’t think the structure of our destination and product offering will change that drastically. The faster we have a coherent and a viable positioning strategy and future roadmap, the sooner we will reach our end objectives.

Serendib Leisure will continue to be a key player in the tourism industry by evolving and positioning ourselves to be in the space we compete in.