Island Hostels: Entreprenurial Spirit

It’s all in the genes (and the jeans) for the next generation of hoteliers at Island Hostels

Former US president George W Bush once (allegedly) famously said, in all seriousness, that “the problem with the French is that they don’t have a word for entrepreneur”.

Jokes aside, his (alleged) intended meaning of the word seems to have got lost in translation from French to English, to American, and back to French.

According to the Merriam Webster dictionary: “You might well wonder whether entrepreneur simply means ‘a person who starts a business and is willing to risk loss in order to make money’. Or whether it carries an additional connotation of far-sightedness and innovation. The answer, perhaps unsatisfyingly, is that it can go in either direction.” Which, in the case of the unfortunate President Bush, the butt of the joke, it didn’t.

So what has this got to do with Sri Lanka? Quite a lot, as it happens, because Sri Lankans have a (possibly unfair) reputation for lacking entrepreneurial spirit and for not being willing to risk loss in order to make money.

It’s said they will happily risk losing someone else’s money, or the bank’s, but not their own. Meanwhile, with honourable exceptions, ‘far-sighted’ and ‘innovation’ are not generally in their lexicon.
With innovation, this seems particularly the case in the hospitality and tourism industries. Here, the preferred modus operandi is ‘wait and see’, let the other fellow take the risk, and if it works, pile in after him—thus potentially causing an oversupply and the bottom to fall out of the market.

Enter Sheron Cassim. Cassim is half Sri Lankan and half Swiss. Aged 27, he lived in Switzerland until he was eight before moving to Colombo with his family, his father is now a senior manager at one of the city’s top hotels. Cassim, therefore, knows a thing or two about hospitality and tourism.

So when he and a few friends, also sons of senior hotel managers, decided to get into the hospitality and tourism business for themselves, they thought: ‘Go with the flow or do something completely different?’

Thus, Island Hostels was born, where innovation and entrepreneurial spirit walk hand-in-hand to create something that is, a) completely different and b) bucks the government’s preferred focus on the upscale end of the tourist market.

The notion of ‘cheap and cheerful’ does not actually do Island Hostels’ first venture justice. True, the cost of accommodation is cheap(ish) and the ambience cheerful—but it’s also just a short walk from the beach in Mount Lavinia, perhaps the wealthiest and most exclusive residential suburb of Colombo.

Cassim himself has the sparky self-assurance of a jack-the-lad tuk-tuk driver. But unlike most tuk-tuk drivers, he also has a sharp business mind, combined with the wit, charm and engaging personality that could sell ice cream to Eskimos.

With his baseball cap on backwards atop a mop of unruly black hair, trendy stubble beard, low-slung jeans, battered sneakers and a Budweiser tee-shirt, he looks every inch the trustafarian global backpacker.

Which indeed he once was, and which might well be why he’s doing what he’s doing—combining a footloose hippy joie de vivre with a business that might provide a comfortable middle-class lifestyle when the yearning for hippydom wears off. Or for when his more high-slung haute couture Swiss genes take over, you might say, if they haven’t already.

Meanwhile, back at Island Hostels’ reception, he is all business, instructing our photographer on what to do and how to do it, arranging the shoot to his best advantage and chivvying things along, all the while greeting and schmoozing passing guests on first-name terms.

This is not the way many providers of low-to-mid end hospitality do business—in particular, it is their chiseling lack of attention to detail and customer service, and the ‘if it’s good enough for us, it’s good enough for them’ attitude that prompts too many scathing reviews on TripAdvisor.

So what is it about a small, seemingly insignificant backpacker hostel that it deserves a mention in the launch edition of this magazine?

“Today’s hippy backpackers transmute into tomorrow’s wealthy middle-class”

Bunk beds at Island Hostels made of wood

Aiming to bridge the gap between backpacker basic and star rated chic, the bunk beds are spacious, comfortable and private. Images courtesy of Island Hostels.

In August this year, Rohantha Athukorala wrote in the DailyFT, “In a typical island nation, the contribution from the tourism sector can be as high as 25% of GDP. Sri Lanka is at around 5-7%, which tells us the opportunity Sri Lanka has to develop this sector and thereby contribute to the economy.”

However, he notes, “The development of an economy cannot be done only by the policymaking body, which is state-driven, but it must be pushed by the private sector so that the industry can be consumer-led.”

Two key words in any marketing campaign are ‘connect’ and ‘engage’. Connect with potential customers and engage them in conversations that will create lasting—and profitable—business relationships.

Writes Rohantha: “The key initiative required on the development of the tourism industry is to increase the awareness level of Sri Lanka as a tourist destination.”

But he points out that successive government marketing campaigns “have tried to address this issue but failed… while our competitor destinations like the Maldives, Seychelles, Thailand or Malaysia have launched more than 10-12 marketing campaigns over the last 10 years”.

The clear implication of all this is that innovation and entrepreneurial spirit—new thinking and ideas—are sorely needed if the tourism and hospitality sector is to shrug off the straight jacket of government ineptitude.

Politicians rarely think long term or give much thought to the unintended consequences of short-term expedience. Hence, their desire to attract high-end tourists who will spend a lot of money today, ticking off their bucket-list destinations without much thought for creating long-term relationships.

This is driving the rapid proliferation of high-end hotels aiming to capture and profit from that end of the market—but which is already beginning to backfire.

A growing glut of rooms, some of them in the wrong places, is driving down occupancy rates to the point that the more highly leveraged properties are being forced to slash their room rates to survive.

This often leads to a downward spiral of cost cutting, falling standards, plunging customer satisfaction, even lower occupancy rates—and in the worst cases, closure, abandonment and potentially severe knock-on problems for the banks and investors that financed the projects.

Re-enter Cassim and Island Hostels. As a well-connected, switched-on millennial, he and his partners understand the importance of connecting and engaging.

It is not usually a good idea to take a hospitality-connected website at face value, as with pictures of food on a restaurant menu that rarely if ever represent the actualité of what appears on the plate.

But Island Hostels’ reality actually does deliver what its website (www.islandhostels.lk) promises. The pictures do represent the actualité, and the opening words are worth quoting in full:

“Island Hostels is a unique hospitality experience, bridging the gap between backpacker basic and star-rated chic. We combine affordable, well-appointed rooms and facilities in a safe environment, where you can meet great people both that work there and fellow travelers. After all, it’s the people you meet along the way that make a place truly special.

“We care about the details, from the spacious interiors to including almost every amenity possible to make a traveler’s experience more convenient and comfortable; we are truly passionate about our guests getting the very best Sri Lankan experience.”

This reflects the fact that Cassim is building a brand, as well as possibly living up to a Calvanistic rectitude born of his Swiss antecedents. He plans to open more hostels, some in more central Colombo locations, others in key tourist destinations such as the hill country and cultural triangle—which means creating that most elusive of benefits: brand loyalty.

This not only generates short-term benefits by attracting fellow backpackers today, but also lays down markers if he ever decides to get into the middle- to high-end hospitality market—Island Hotels, anyone?

In other words, when today’s hippy backpackers transmute into tomorrow’s wealthy middle-class professionals and want to share the great time they had in Sri Lanka with wives and families, they will (hopefully) remember Island Hostels and its upscale, middle-class offspring.

Cassim embodies a mindset that needs to be nurtured and encouraged if Sri Lanka’s tourism and hospitality industry is to flourish and grow from 7% to 25% of GDP, and thus help the country’s economy to flourish and grow.

As he says: “The government does not realise how much budget tourism helps the country and local people. Budget visitors who fall in love with Sri Lanka today will return as mid- to high-end visitors tomorrow and the day after tomorrow.”

Hospitality Insider Issue 4