Singapore-based, Lankaisla, sees immense potential in Sri Lanka’s tourism sector, and is set to expand its presence to Sigiriya and Colombo shortly, in what is billed to be a major acquisition.
The company has invested over $8 million in Sri Lanka over a year, and will hold as many as 1,000 rooms across the country by the year end, during its first-phase of expansion.
Lankaisla Chairman Dakshitha Bogollagama, speaking to the Daily FT said, Sri Lanka holds many underutilised potential tourism hotspots, and his company hopes to transform traveller experiences in the country with an innovative business model that has global reach.
Lankaisla has acquired over 300 rooms at present with investments in six properties consisting primarily of boutique hotels. The company spent over $3 million for its recent venture at the popular Peacock Beach Resort in Hambantota, which was relaunched following renovation that cost over Rs. 200 million. The Ocean Queen at Wadduwa is their latest venture, exceeding Rs. 50 million in investments for crucial upgrades and is now open to discerning travellers worldwide.
In Sri Lanka, Lankaisla has six properties in its present collection, namely, Mazarine Surf Suites Dickwella, Peacock Beach Resort Hambatota, Sunrise Cabanas Arugam Bay, Oga Reach Tissamaharama, Ceylan Lodge Anuradhapura and The Glenrock in Belihul Oya. The company has purchased outright some of the properties, while others are held in partnership with former owners.
“June 2022 is when crisis really hit the hotel sector following the triple shocks of the Easter Blast, Covid and finally the financial crisis. The third hit affected tourism the most. That’s the time we came in, as we saw this as an opportunity. The first investment was in September 2022. Investors wanted to see up to 500 hotels, and we had two months to showcase potential properties,» he said.
“Many hotels were stuck by then but they were reticent. So literally, we had to knock on doors to garner information, and managed to add about seven hotels a day to our prospective list. The first investment was in Dickwella, on the Mazarine Surf Suites with a loan to be repaid. We acquired it, completed the construction and it is now the first luxury hotel in Hiriketiya. Similarly, in Anuradhapura, Sena Lodge had an outstanding loan. We cleared it and now we enjoy 70% occupancy. We started work on Peacock Beach in April this year, and got the 106-room hotel ready in just six weeks. The Harbour Wing was not built since the tsunami, and today we have brought this hotel back to life and even launched four restaurants there,” Bogollagama said.
Hambantota is an area that offers immense potential, remarked the Chairman of Lankaisla, who believes the industry could take advantage of the infrastructure available on the ground. There is an airport, a port and a convention centre that could accommodate 1,500 people, and serves as ample ground for specialised MICE events. Bogollagama noted that six investors from various sectors had visited Hambantota and Peacock Beach recently, who had links with airlines that could prove beneficial for the Mattala airport. He said Mattala offers significant potential as it is closer to Ella, Nuwara Eliya, Arugam Bay and the largely untapped East coast. This potential connectivity is very much underutilised, he added.
Lankaisla acquired Biology in Arugam Bay and converted it into Sunrise Cabanas, which now has the first air-conditioned bar in the area. The company also acquired OGA Reach Tissamaharama, while Ocean Queen and Elements at Kalametiya are under Lankaisla’s management. Bogollagama said the management model presents an appealing option, utilising technology and infrastructure developed during the pandemic.
“We realised we could put to use the infrastructure we created during Covid to help us manage the hotel network, reduce costs and streamline operations. So, we have given that option to the owners. Some people are stuck for capital to fund expansion, with no revenue inflow. Who will grant them a loan? We provide loans without any collateral, up to Rs. 50 million in some cases to get the place cleaned up and operating. This is the difference in our operating model,” Bogollagama said.
Lankaisla is backed by an extensive network of partner companies based in Singapore and other countries that extend effective marketing and support services to the chain. Singapore-based Zeta One offers finance, administration, ICT and general management support to the company, rendering Lankaisla a completely paperless operation. Bookings, billing, sourcing and its entire restaurant management process are done online, enabling the management and the shareholders to have complete visibility over every aspect of operation. Bookings at properties operated by Lankaisla are managed by its own booking and hotel management application and site named Ceybook that allows visitors and management to customise their experience.
“Our partners complement our service and offerings. Helios Ventures is our investment arm that also offers IT support and our systems are built on Helios. We can support any business from any place. Our hotels have no accountants or marketing personnel; the systems have been built to support these functions island wide. Our booking platform Ceybook, manages visitor check-ins. We have a Digital Concierge Service (DCS) that services our guests’ every requirement from their arrival to departure. To support this requirement, we have our own security company, Helios Guards who can provide any support island wide. DCS is available on Whatsapp, WeChat and Telegram. Visitors could simply scan a QR code to get any information and support round the clock in any part of the island,” Bogollagama said.
He added it is imperative to create positive impacts, enthusing that Lankaisla has successfully created over 600 jobs in the country, with prospects for hundreds more. “This is all equity, all paid for in dollars and not a single cent of our tax money,” he said elaborating that all managers at hotels are trained by ZETA from Singapore, while the group has also taken in many young people who are tech-savvy and able to extend their services and reach across a wider plane.
“As a global company, with a base in Singapore, Hong Kong, Europe and beyond we have our own licensees in China, and that is a significant strength. When a Sri Lankan talks about Sri Lanka, people would think twice, but if you get a Singaporean to talk about Sri Lanka that is a different ball game altogether. This is the infrastructure we have created over the past eight years, and it was tough to build. I don’t need to go overseas anymore because I have people out there taking Sri Lanka there, and bringing people here and to Hambantota, not only Sri Lankans, but also Europeans and Russians. Thus we are gradually building up and covering the whole tour map in the country and soon we will have it all covered,” Bogollagama said.
He is of the view that the East coast is severely under-represented on Sri Lanka’s tour map, pointing out that places such as, Rajagala, Thiriyaya and Sampur offer great opportunities for investment and leisure. He touched on the potential of Trincomalee as a fashion and entertainment hub in the country, where Sri Lanka’s apparel industry could showcase some of their creations to a global audience instead of sending them to Paris and other destinations. Lankaisla envisages a holistic travel experience that enriches all aspects of business, travel, leisure and thereby enhances growth prospects in the country.
“People travel to the Maldives, why? It’s just the beach. In Sri Lanka we have so much more. But we are only showcasing the beach. Ours is a scalable model. This system allows us to manage hotels and gives the owners the freedom as well. We trade globally on stocks and commodities, there were hotels that were stuck; we have already invested $8 million in the country and have zero debt.
“We have investments in other countries as well, but Sri Lanka is my passion and it’s much more than just hospitality. We can invest in anything. We have raised $2 billion capital for an oil storage project in Indonesia. We planned for a $3 billion investment on the east coast to build our first fashion capital. But the Government is slow, it’s not that we cannot bring in investment, but investors don’t wish to wait two years for approval. That’s the problem. We have to streamline those processes and change the dynamics of the country,” Bogollagama said.
A former Chairman of National Enterprise Development Authority, Bogollagama said it is imperative for Sri Lanka to embrace technology to enhance reach and drive productivity across all spheres. He stressed that the country must focus on empowering a global workforce from here across services industries, as opposed to encouraging Sri Lankans to seek opportunities overseas. Bogollagama also touched on the need to enhance Sri Lanka’s brand image, pointing to a large number of negative media from past events that impacts the destination’s outlook.
“How do we attract the right tourists? Projects like these and projects such as the proposed fashion capital in Trincomalee. High-spending tourists need to have places to visit, high-end living spaces like in Dubai. We are attracting the low-end mostly, we are not marketing our country to the high-end tourists who need the facilities and locations to come and spend. We must have global events, such as in Singapore.
“Singapore is built on the fundamental law which applies equally to all. Any legal matter needs to be completed in six months, and that gives great confidence to the investor. We must also have a policy framework that doesn’t change and impact projects negatively. Once we have the systems in place there is no room for corruption. The Government must bring in systems to streamline infrastructure. If not, no matter who comes, the needle will not move,” Bogollagama said.
Lanka Newsweek © 2024