Hassan Rafeek is hardly an imposing person. Cotton shirt with sleeves rolled up to the elbows, jeans and loafers are the uniform of a young entrepreneur, not the head of businesses worth multiple millions of dollars. But despite the original family business being 25 years old, Rafeek is clearly an entrepreneur at heart with high quality, high volume and low cost for an all-encompassing business mantra.

Second-in-command after his father in their core textile industry business, Fashion Fabrics, on Galle Road, the entrepreneur backpacked across Europe and Asia as a young man, and continues to travel frequently with his wife. Back home in Sri Lanka, Rafeek missed the cozy casualness of the hostels he stayed at when abroad. In December 2012, he began his contribution to filling the gap by setting up Clock Inn Colombo Hostel.

The Clock Inn Colombo property occupies family-owned prime land on Galle Road. Rafeek made a saving on leasing or purchasing land, and obtained an ideal location for the venture to top it off. The Rs10 million he intended to invest in the first property grew to nearly double that, but he managed to convince his father to pump in the investment, because he believed in what he was doing.

“I was seeing backpackers on busses and trains, so I knew they had to come to me.”

Rafeek’s talk of maintaining ‘cool, clean and cheap’ sounds idealistic to begin with. He expanded to a slightly higher-market, family-focused hotel at their Ivy Lane property, again spending double the Rs20 million he had estimated to refurbish the property. In 2015, he launched Clock Inn Kandy, and the latest property on the portfolio, Clock Inn Dehiwala, was opened in May 2016. From a four-man, single property business, Rafeek has grown Clock Inn to 50 staff and four properties with nearly 150 dorm beds and added private rooms in just over three years. Growth of the business follows a startup model, and rates sometimes lower than Rs800 per dorm bed means he doesn’t see a break-even point for at least the next five to seven years. But Rafeek insists that quality comes first.

“It was always an experience-focused business and we were only hoping it would turn out a profit.”

The luxury of an indulgent and wealthy father is on Rafeek’s side, and he also has years of solid experience from the textile business he runs. Rafeek is consistent in his application to Clock Inn because he knows good business takes time to grow. But his winning point is, as the formula goes, commitment driven by passion.

Clock Inn started as a pet project, when the Galle Road property lay unoccupied for nearly a year. For more than a year after officially opening the business occupancy remained as low as 20%. The first three or four months were especially difficult, he recalls, with lack of experience in construction and hospitality leading to the electrical wiring and plumbing sometimes giving away. Rafeek would be at the property within minutes, dealing personally with the issue.

“The first thing we did the next day was make full refunds,” he says.

Rafeek understands his customers, and the fact that even a single dollar makes a difference. So a refund goes a long way, and through word of mouth, by mid-2014, Clock Inn had risen to 90% occupancy.

Rafeek tries to stay hands-on, despite the growth in size, for very specific reasons.

“My staff see me get my hands dirty, so that keeps them committed too,” he explains. “I always tell them to talk to the guests, make friends and to give them a good experience.”

Rafeek is clearly not the only player in the game. Tourism is becoming everybody’s business, and hotels and homestays are a given almost across the island. The influx of low-spending tourists is also giving rise to more budget accommodation like hostels and dormitories along the coast and in more tourist-happy towns. The one thing you’re still likely to have difficulty finding is a sleeper capsule or pod, and he has got his fingers in that pie.

[pullquote]“It was always an experience-focused business and we were only hoping it would turn out a profit.”[/pullquote]

Capsule hotels were popularized in Japan as a simple and cheap solution to the lack of a bed for travellers. Each capsule contains a mattress, pillow and maybe a towel. On the inside, it is usually equipped with a light, plug point and sometimes a TV. A fee equivalent to Rs1,400 gives these, and communal showers and changing areas to travellers who don’t need (and therefore would rather not pay for) the added comforts of a regular hotel or the social prospects of a hostel.

On the bare rooftop of Clock Inn Kandy, under only a shed-like structure, five capsule sleepers made of concrete hume pipes with plushed-up interiors afford a unique experience to travellers. The inside of each pipe is lined with carpeting and planks laid across its diameter hold the usual mattress and pillows. What guests pay for is the novelty of the experience. The capsules cost Director Hassan Rafeek Rs150,000-200,000 each to set up, and with a Rs1,000 turn-down cost per guest night, make only a “minute” contribution to his books, but the has-been backpacker is only testing the market. He is confident that the response he has got is good enough to justify investing more in the venture. His mission with the capsules is the same as with the dorms: to have more of them, to become even more affordable, and then take them everywhere it is cool enough to go without air-conditioning.

What gets Clock Inn consistent ratings and reviews is the stringent hygiene and style standards Rafeek insists on. These ratings, although not excellent or remarkably high, are the result also of guests’ experience with like-minded people and relevant information. Instead of ads for expensive tours, Clock Inn collects and disseminates information on public transport and sharing options. Rafeek also has plans for a party bus in the future and is looking for property in Galle, Dambulla and Ella to expand.

“We’re here to stay, we’re here to grow,” he says, quiet, but confident.