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Tuesday, 19 April 2016 00:10 - - {{hitsCtrl.values.hits}}
Fairview Hotel Colombo Managing Director Gerard Ondaatjie - Pix by Lasantha Kumara
By Shehana Dain
Q: Could you tell us about Fairview Colombo – the property, its positioning, offerings and potential?
A: Well, firstly it’s a breakthrough product in accommodation for Sri Lanka and there are two factors to it. The more important one is the pricing factor because we are setting a price which is very attractive to the customer. For instance, if you take a Colombo hotel, you will have a coffee shop, a pool and restaurants – basically a lot of added services. Therefore when you add those services there is a cost factor to it and as a result you have a minimum price of $ 150. There are many guests who come into Sri Lanka who don’t want those services; what they require is a good clean room, they want safety, and in that room they want comfort. They are not willing to pay a higher price because it’s added on with those other services; saying that, there certainly are customers who are willing to pay that premium price.
If you take a transit or for that matter even a leisure traveller, they come into Colombo to go back to the airport. They don’t have time to go to the pool or the gym, they just want to wind down and relax. Therefore, if you really look, you will notice how many of the city hotel pools are really barely being patronised by in-house guests and the gyms are being patronised by outsiders.
If you look at Sri Lanka, we have never had a product like this. If a product at this price point existed it was considered very ‘sleazy’ if a room was offered at $ 50 and if you go there you find that the atmosphere is not very safe. With a low price comes a certain connotation and thereafter a bad reputation, but this venture is established by a very reputed group of companies and we have structured the business where we are taking all the frills off.
They just want a clean room, good service, privacy and accommodation and that is exactly what we are giving at $ 65. We are overwhelmingly full. There is a market in Sri Lanka which was not fulfilled and now we are grabbing this opportunity. In the next five years everything we have known and traditional forms of business are going to be challenged.
You can pay $ 2,000 for a room or $ 50 but when you finally go into the room and when you go to sleep, the bed is all that matters. I tell everyone over here a king size bed is 72 by 76 and if you go to our bed, the amount of emphasis that we have put on the bed is very high; the 14 inch mattress is perfectly designed for us and it has a mattress topper. The sleep quality is remarkable and I think we have fulfilled our customers’ desires. We were not expecting to make profits so soon on but we are and for a small property like this we are giving record service charge for the staff.
Q: How did the idea of Fairview materialise?
A: For me as a person who conceptualised it four years ago, it’s rewarding because I had traditional gurus telling me ‘What are you talking? This is nonsense; it’s not going to work out.’ Even when I went to get the approval and I said that I have a block of land which is 18 perches, the people who write the law were sceptical, questioning how I could do something like this because their mindset is still conventional. Yet we emerged a winner. I think the sooner we put three of these in Sri Lanka, we are going to break all boundaries.
The lateral forms of new business are changing; it’s the market place that’s driving it. I’m sure after seeing this product lot of people are going to ask themselves why they didn’t think about this business model.
Q: Do you have plans to expand this brand further?
A: I have hoteliers from around the world who have come to me and said that I should immediately consider putting up two of these in India, and we are really thinking of it.
We are thinking of calling this ‘Fairview Beach’. If we put one in Galle we will call it ‘Fairview Galle’ and if in Katunayake as there is business for transitional traffic we could call it ‘Fairview Airport’. We have this brand which is very sellable. I think this could be developed into a world-class idea.
Q: Can you tell us about the award that you won recently via an online booking platform?
A: We won an award from booking.com. How it works is we upload the images of the hotel and they market it. Therefore when we opened, that is on 19 July, we loaded the images around the same time. Since then we have had bookings trickling in and based on the reviews for the past six months we got this award. We have not been able to have an opening for this property because we have been full from day one onwards and being having repeats as well.
This basically speaks for itself; what is noteworthy is that online bookings have increased, which I think is the way forward now.
Q: What do you think about the key internal processes that contributed to this win?
A: Certainly the internal process is the structure of the product itself and the staff and the entire design. Price is a focal point as well. I always say this to everyone: Price never goes out of fashion. I had people saying ‘go at $ 75,’ ‘go at $ 80,’ and I said, ‘hold on, we go at $ 65’. Price is a very important element which can make or break and we are at that point.
If you look at the breakfast that we serve, the bakery items are prepared in the hotel itself. There is fresh juice, tea, coffee, eggs, yogurts, fresh fruit and chicken bacon to suit the palette of the clientele in-house. We don’t serve pork or beef and we are very proud of that strategy. We are giving what the market wants as there is a huge portion of people who don’t eat pork or beef. We are next to a very famous Hindu temple. In fact the idea of not to sell beef came due to this reason because some of the people who come for meditation stay here.
Q: What’s your stance on the much-debated minimum price?
A: I don’t think that’s a good idea, I think they should let the forces of demand prevail. For instance, if you look at Cinnamon Grand or Hilton, depending on the supply and demand before the whole minimum price regulations came to place, one day they will go at $ 135 and then on another day they may go at $ 90. However, since the Government introduced this minimum price, there were many opportunities underneath and that’s how Fairview came into the scene. If they take the minimum price off, then there will be a lot of pressure on us because we are now underneath that radar. We are occupying all that’s underneath the minimum price. I think in a free market there should not be intervention. Let the forces of demand and supply determine the price.
If you book a hotel though the internet from any part of the world, one day you might get it at $90, the next day at $135 and another day at $75. It all depends on the demand and supply forces on the particular product at a certain time period.
I know that The Hotels Association of Sri Lanka (THASL) is saying that we should keep it but my feel is that we should let the forces of supply and demand decide. If you’re putting a business and pumped a lot of money into it, obviously within your own internal structure you will want to maintain a minimum price. Let’s not wait till the Government tells you that. There are certain days you’re at 20% occupancy, why not bring down the price and get that money in?
Q: What is the story behind the name ‘Fairview’?
A: It’s a very interesting thing. I used to live in the USA in the late ’80s and come home at about 2 a.m. in the morning. There used to be a street called Fair Oaks next to my home. There was therefore much emotion over that name like ‘Okay, I’m coming home now’; like I’d work the whole day and when you see that street name I’d know I was only two minutes away from home. That name kind of psychologically came to my mind. Then I realised that if I called it ‘Fairview,’ it makes sense because we have a fair view from here and it all really works well because we have really reasonable and fair price.
Q: Being new to the Colombo city hotel scene, what have your challenges been?
A: The challenge has been to find good, skilled staff. In the hotel industry if you take Sri Lanka the labour force is for other economies like Dubai, Maldives and all over the world. When we have good ideas I think we may have to import people to come and work here. It is a challenge to find good, quality hard-working people. We concentrate a lot on quality staff. Our mission here is we reward you adequately, we treat you like human beings, but we want good staff. A lot of emphasis is on that and not just hiring and firing. In here the staff turnover is quite low, virtually low. When we have new businesses coming in, even after we put 10 advertisements, we don’t get many responses.
Q: Pricing can be very competitive and research has shown that mid range hoteliers should closely watch the market as they face the highest threat of being overpowered by market forces. Where does Fairview stand?
A: That is true but the success of our business also lies with where we have located this business. This particular zone has a lot ethnic travellers and in addition a lot of travellers have their relatives in Europe. We looked into all these factors before selecting this property in Wellawatte. I feel that if it’s run well and in the right location the $65 price is a good price.
In most cases when it comes to Airbnb, this is another challenge for graded hotels. I’ll save probably 15% whereas there can be difficulties in sourcing your meals and in terms of wanting an ironing-board to iron your shirt or read the morning newspaper. Therefore I think there’s room for Airbnb and certainly for products like this.
Q: How geared are you to face the steep rise of the informal sector, which is a rising threat to graded hotels?
A: The steep rise in the demand sector I feel won’t be eating into this price brand. There is an informal sector and yes there will be a certain amount of erosion but I think there will be a sector of clients who wants this limited-services hotel just like another group who’d pay $300 and stay in a hotel with full service.
We are closer to compete with Airbnb customers than the five-stars. But I’m not worried about that. If you take Sri Lanka, Airbnb has been here for the last 20 years. Rooms in almost every house like Wellawatte, Kandy and Nuwara Eliya and even in the Marine Drive area are especially given for rent at lower prices. The sector has always been in Sri Lanka but the world has now confined that to Airbnb.
Q: What’s your outlook on Colombo and its tourist potential?
A: We are not involved in promoting Colombo. There’s nothing much we can do here. It is a transitional point. For some reason Colombo has become a one-night destination. However it is the capital after all, therefore visiting Colombo has become a norm. It’ll definitely attract that block client who wants to go to the capital after a long leisure holiday around the country as well as the business community.
Q: Is there anything that should be done to make the duration of stay in Colombo longer?
A: Yes, definitely. If someone stays here for four days, there should be things like cultural shows and integrated resorts, but gambling doesn’t necessarily have to be in Colombo. Maybe some shopping malls and most importantly keeping the city clean because tourists like to walk around. Nowadays the street conditions are better. We have good weather and a tourist would always love to walk around and take pictures; for that the roads should be clean and safe.
