Negombo sees itself as Sri Lanka’s premiere west-coast tourist resort, with more hotels and guest houses for its size than just about anywhere else in the country. TripAdvisor alone lists 720, many of them in the 3km strip running north-south between the beach and the main Puttalam-Colombo Road.
So Negombo sees a lot of tourists. The trouble is, it doesn’t see much of them, or for very long.
Being just 30 minutes from Bandaranaike International Airport, this former fishing village, population roughly 140,000, has become the ‘gateway to Sri Lanka’. Unfortunately, that’s exactly what it is—a gateway.
Which means that tourists with an itinerary, which is nearly all of them, pass through it on their way to somewhere else, spending only a night, possibly two, in Negombo at the beginning and end of their holidays. A ‘premiere west-coast tourist resort it is not.
Many of the bigger properties—for example, the three ageing Jetwings, the new Heritance, Goldi Sands—can supplement this transitory trade with wedding parties and MICE, the trade name for Meetings, Incentives, Conferences, and Exhibitions.
But for the smaller fry, of which the Pledge3 boutique hotel is a good example, things are not so easy. In fact, they could be described as difficult, and by all accounts likely to get even more difficult—possibly crisis-scenario difficult—without a radical change in mind set and the way they do business.
There are many reasons for this, but two stand out—value for money and customer service. The first is bedevilled by Negombo’s reputation for treating tourists as cash cows to be overcharged and under-served at every available opportunity. The second is the consequence of Sri Lanka’s growing shortage of staff who are trained and qualified in the business of making foreigners feel welcome and valued, not outsiders to be exploited.
Pledge3 knows this—which is to say, it does now, because that was not always the case. When it opened five years ago it was described by CNN’s veteran travel writer Ian Neubauer, with full allowance for breathless journalistic hyperbole, as “Sri Lanka’s most sophisticated hotel, a five-star oasis of luxury and retro style in busy Negombo. Every corner of this boutique hotel screams cutting-edge design.”
But it also charged like a wounded buffalo—“a deluxe double suite with breakfast $305, or $405 for an attic suite per night”, according to CNN—which meant it was punching way above its weight on price, as many disgruntled customers were quick to point out.
The same was said of its restaurant. Nice food, but too expensive for what it was when compared with similar establishments. So as the years passed, occupancy rates stagnated or fell as the novelty wore off, while the restaurant struggled to pull in the numbers of fine-diners it sought to attract. On top of that, the “cutting-edge design” is beginning to show its age, and is in need of a facelift.
The good news is that things are about to change.
Yohan De Zilva, Group General Manager at Pledge Hotels and Resorts
Late last year, owner Mahesh Fernando tasked Yohan de Zilva, an experienced veteran of the hotel and hospitality industries, with breathing new life into Pledge3 while also overseeing PledgeScape, Fernando’s second property which opened recently on a prime beachside location.
Yohan will be helped in his mission by Pledge3’s new operations manager, Mervin Ravindran, who recently returned to Sri Lanka after years working in top hotels in the Middle East. Young, energetic, and forward-thinking, he is full of ideas that will focus on exploiting the full power of social media—Facebook, Instagram, Twitter, YouTube, etc.—to create a personalised service for every individual guest.
Yohan says he is well aware of what might have been going wrong at Pledge3, and what is still going wrong throughout the industry. But while there’s not much he can do about the latter, he is well qualified to tackle the former, starting with the fact that this “five-star oasis of luxury and retro style”, while indeed a very nice and very stylish oasis, is not five-star and not retro.
He says: “First, I had to find out what went wrong, why it went wrong, and what we can do to put it right. When Pledge3 opened, it got a lot of things right, but it had teething troubles and has not lived up to its potential.”
Some of that is to do with the original vision, and how it was executed. A good example is the so-called ‘RetroPub’, a plain concrete bar on the edge of the dining area. Again, decidedly not retro and definitely not a pub. Whoever thought it was, clearly does not understand the meaning of the words. Thus Yohan chooses his own words with care when he says that the original architect held too much sway over the outcome.
“Architects are not in the hotel business, and in this case seemed to be too focused on creating an architectural design concept at the expense of what this is supposed to be—a warm and welcoming exclusive space where people come for great hospitality, first and last.” Fortunately, he says, Fernando now understands this and is open to suggestions on how things can be changed and improved.
“Secondly,” says Yohan, “for too long, we had too many staff who were not doing their jobs properly, which is sadly a reflection of the management over the past few years. So I let half of them go and ensured that the other half are motivated to give customers the kind of service they have a right to expect from an upscale boutique hotel.”
Mervin Ravindran, Operations Manager at Pledge3
On the general subject of staff, he is not hopeful that problems facing the industry island-wide will be solved any time soon. In short, there are not enough to go round, and of the few that Sri Lanka’s one and only training school produces, many of the best are heading abroad for better pay and conditions in the Gulf, Middle East, UK, Australia, Canada, India—ironically, the same countries many of Sri Lanka’s target-market tourists come from.
Meanwhile, again choosing his words carefully, he alludes to the rampant overcharging—offering mediocre quality at inflated prices—that has become the tarnished hallmark of many of Negombo’s small-to-mid-size tourist-facing hotels and restaurants, as well as the beachside shops selling the usual overpriced assortment of trinkets, tea, and tat.
As he says: “Most of the Negombo tourism businesses have very big margins—over 50%, sometimes well over, is common—which cannot be justified by the product or quality of service they offer. This is a rip-off.
“Many of them have little or no idea what a line item actually costs to produce, whether it’s a dish on the menu or a service, and no idea of an acceptable margin. They charge what everyone else charges—basically, as much as they can get away with—regardless of quality, which tends to push prices up without any increase in quality or service. They might get away with overcharging tourists in the short term, but it can’t last.
“At the same time, there is no vision or leadership that can create the medium-to-long-term marketing strategy Negombo sorely needs based on value, quality of experience and a fair deal, and no desire to act together to improve the situation.
“There is an old saying that ‘a rising tide lifts all boats’, but there is a huge reluctance here to do anything if it also means benefitting the competition. They would rather see the tide go out in the short-sighted belief that somehow they won’t be left high and dry themselves.”
Mervin Ravindran, Operations Manager at Pledge3
Back to Mervin at Pledge3. One example of his forward thinking is to actively market the property as a halal hotel to attract more of the world’s 2 billion practicing Muslims, particularly from the Middle East, the Gulf and elsewhere. It so happens that all the hotel’s meat is already sourced from local halal butchers. It does not serve pork or pork products, and it will be but a small step to align the rest of the hotel’s USPs and general service to appeal more to Muslim visitors.
He is also keen to promote Pledge3 as a regular meeting place for locals, even from as far afield as Colombo, where friends can gather to drink and chat and experience something new in the way of food, music, and ambience.
Meanwhile, he wants to distance Pledge3 from Negombo’s rip-off culture by stressing that profit margins must be realistic and based on a scale that emphasises value, whether for cup of coffee or a three-course meal. “Profit is basically revenue minus costs, and we must get the balance right, which means fair for us and fair for our customers”, he says.
To spread the good news, and to connect and engage with existing and potential customers, he has created a blog that will be a vital means of communication across the board. Linked with their Facebook, Instagram, and YouTube channels, it will serve two purposes: to spotlight the hotel and, just as important, promote Sri Lanka as a must-visit holiday destination.
So what does owner Mahesh Fernando think about all this?
He readily admits that he is first and foremost an entrepreneur who got into the hotel and hospitality business without much real understanding of how it all actually works.
His main interest is Mahesh Corporation, which is primarily a leading importer and retailer of cars and commercial vehicles. He has been very successful at it, which prompted him to diversify into hospitality and tourism purely as a business opportunity while leaving the running of it to the so-called experts.
He accepts that he might have relied too much on self-serving ‘expert’ opinion that has so far failed to produce the results he was led to expect. On the other hand, he also knows that tourism and hospitality is far removed from the kind of ‘hard-sell’ environment he is used to and thrives in. You can ‘hard sell’ a car, but not a dream—and dream holidays in an exotic tropical paradise is what Sri Lanka is all about.
That said, running a hotel is like running any other business—it must make an acceptable profit if it is to survive and thrive. ROI (return on investment) is a key part of that, and underpins Fernando’s insistence that everything and everybody must now justify their existence by performing to expectations—and ‘expectations’ is a key word in the tourism business.
Unfortunately, what tourists expect and what they experience can be two separate things. The latter can fall far short of expectations. If hospitality providers want repeat business, they need to understand and empathise with the needs of their target market – foreign tourists – and ensure that their service adheres to international standards.
All of which Yohan de Zilva has in mind when discussing PledgeScape. He is determined that this latest venture will not make the same mistakes as occurred at Pledge3, and that value and the best possible customer experience will be reflected in every aspect of the business. It will also be an opportunity to revitalize Pledge3 and reposition it to emphasise value and to meet customer expectations, whatever they might be.
Talking of repositioning, a young(ish) male customer lounging with a drink beside the pool laughingly described how, on his first night in the attic suite, he slept “the wrong way round” with his head at the foot of the bed.
Why? So that the first thing he saw when he opened his eyes in the morning was the huge colour close-up of Marilyn Monroe, the blonde bombshell Hollywood icon who enchanted 1950’s America, that hangs on the wall above the bed.
Now that really is retro!