Tea with

Lanka slack in destination marketing

Indunil HEWAGE

Serendib Leisure Management Limited which comes under the management of the diversified Hemas Group owns and manages a series of hotels and resorts in several strategic tourist locations within Sri Lanka. The hotels cater to the discerning, mid-market tourists mostly from Europe and Asia.

It comprises four hotels named Hotel Sigiriya, Club Hotel Dolphin, Avani Bentota and Avani Kalutara.

Daily News Business interviewed Serendib Leisure Management Limited and Serendib Hotels PLC Managing Director Ranil De Silva for this week's column.

Here are the excerpts of the interview

Q: As far as local hotel industry is concerned, many hoteliers have shown keen interest in investing in the North and East areas after the war. What are your plans for these regions?

A: I would say we don't have immediate plans to reach these areas. The reason is I don't see the North area as a proper tourist destination for international travellers.

But as far as the Eastern coastal area is concerned, yes, we are on the lookout to expand our presence there. But we will be coming late once all infrastructure is put in place in this area.

Q: How much has your market share grown over the last couple of years?

A: We are the eighth largest hotel management company in Sri Lanka. If we take our market share, we have a 50% market share in Sri Lanka. We are concentrating on growth in the local market, so our growth plan is to increase our inventory to 1000 rooms by 2016. We believe that this would put us in good stead.

Q: Where do you see growth coming for your hotels?

A: Germans are still sustaining us despite the slump from UK tourists. In addition we see a lot of middle eastern and more upper market Indian clientele coming to Sri Lanka. However, if we look at Sri Lanka's tourism industry statistics, this year there is a 30 percent growth in this sector over the last year.

The country would be end up probably with around 850,000 tourists by the end of the year. But the fact that only 65% convert to real guests where hotels are concerned.

The rest is coming to see their parents and friends and such like.

We want to look at new markets such as Russia, Poland, Sweden, Netherlands and Austria to take the industry to next level.

Q: How has government policies impacted on the tourism industry?

A: We raise the prices of hotel rooms in what we call a price correction and I fully subscribe with that view.

Earlier we were giving rooms at cheap rates and with that move hoteliers managed to earn enough to reinvest in their existing properties. Some say we are not hitting the numbers we are expected to achieve. I think its not the case. The problem is there has not been much destination marketing by the government side. Government authorities and private sector investors have contradictory ideas about the destination marketing.

The SLTDA view is that first you get the infrastructure ready and then we will do the marketing. Where as the industry says we have to do the marketing, otherwise we can't even sustain what we have, otherwise we could capitalize on war ending, if we did that at that time, tourists would have come in. But I think there has to be a balance.

What we really need to do is to raise the bar where the industry is concerned. If we don't have our hotel inventory, here won't be a place for them to stay. Its kind of a balance that we need to strike here.

Q: What trends can be identified in this business on a global basis? How has it impacted on the local hotel industry?

A: Sri Lanka has to be very cautious about what is happening in Europe as we already see a huge drop from the UK market for us particularly. Both Club Hotel Dolphin and Avani Kalutara were predominantly dominated by the British market last year.

This year it has totally come down and Germany has taken over that position.

It clearly shows that UK markets has come down. On the global basis , what we can see is that Europeans are looking for short haul travels in their region rather than travelling countries like us.

European tourists are looking at shorter term durations of stay and their main objective is to have experiential travelling.

It is imperative for us to change our products and marketing strategies in such a way in a bid to sustain the local industry.

Q: What are the pressing challenges you see in this industry?

A: We as a country need to raise the bar today, as the industry had been in difficult times during the last couple of years. I think we are still in a survival mood.

What we think is that we can get away from anything with our smile, but its not the case any more, instead we need to up that bar where service standards are concerned. For me I feel we don't have the enough management capability in Sri Lanka to do that.

I would say we desperately need to look for bringing more foreign managers for a certain period and learn from them to take the industry to next level.

Q: What are your future plans?

A: Leisure management has been one of the major focus areas of Hemas Group.

Accordingly a large sum of Rs 70 billion will be allocated for the next 4 to 5 years for the development of the hotel sector and we are looking forward to move from about 420 keys to 1,000 keys by 2016.

The company is on the look out to expand its presence locally in some identified areas such as Nuwara Eliya, Kandy, Willpattu or Yala area. In addition, the company will put up five star hotel named Peace Haven in Tangalle with an estimated investment of US $ 35 million .The hotel will comprise 120 rooms plus 20 residential components.

The room count of Club Hotel Dolphin will be increased by another 50 rooms. With this, the entire room count of the hotel will come upto 200. We also looking building a four star city property in Sri Lanka as part of aggressive expansion plan in Sri Lanka.

At the moment we work closely with Thailand based Minor Hotel Group. We believe that our strength lies in the four star category since we don't have the five star experience.However brand that we carry for international purpose is Avani and are talking to Minor about managing Avani properties overseas as well.

Profile

Full name - Ranil de Silva

Current position - Managing Director, Serendib Leisure Management Limited, Serendib Hotels PLC.

Ranil de Silva is a fellow member of the Chartered Institute of Management Accountants, UK, an Associate Member of the Institute of Chartered Accountants of Sri lanka and a member of the Chartered Institute of Marketing - UK.

He began his career at Ernst & Young and then went overseas to work for a multinational for 10 years. De Silva has wide experience locally in the apparel industry and retailing, prior to assuming office as Group CEO of the blue chip conglomerate - the DCSL Group.