Oh! Colombo - The Hospitality Industry

Mar 25 2022.

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For several decades the hospitality industry has been dealt blow after blow. The past three years were probably the most difficult after the era of fighting terrorism. With low gas supplies and fuel and price hikes of every item, the past month has been the worst. This has been a harrowing experience for all hotels and restaurant owners, searching for ingredients, taking care of its staff and coping with regular power cuts, non-deliveries etc. I asked six successful persons in the industry what their thoughts are for the industry in the current financial crunch and what they foresee.

Shanth Fernando, Chairman, Paradise Road Group of Companies
Difficult question to answer as we take each day as it comes. We are renowned for particular foods and maintaining standards and quality will be a challenge since we have never scrimped on ingredients. There are imported ingredients that are irreplaceable to achieve the taste and flavours that we have established in the last 25 years.  Finding substitutes will be difficult and how long can one store ingredients if you find them? They all have a shelf life. With all the hurdles of running a business in Sri Lanka, it was never a smooth sail anyway. We have to try to face each new day with a smile as it is not only the food but the employees that we have to care about in a crisis.
Jean-Charles Proprietor Café Française
It is true that the current situation is not simple but we have to deal with it. At this time, we really do not have any other choice. We have to stock up, become very well organized and be more professional than ever before. Purchase prices have increased by about 30% but our customers will not find a 30% increase on their bill. We have decided quite simply to increase our prices only by 10% and to reduce our margin. Under no circumstances does this affect the quality of our products, however. We have also decided to financially support our staff to help them with their loss of purchasing power.  
Nayantara Fonseka Managing Director - Taru Villas Resorts
Hopelessness - more than the shortages of food, fuel, and gas. I see that we are bound to lose the best in our industries of service and hospitality as they look for greener pastures out of this country to secure a better future and a life of freedom for themselves as well as their families. If I was younger, maybe I would do the same. How I wish I could just throw my hands up in the air and walk away. But I know I cannot. 
Our kitchens  have not been built with hearths to use ‘twigs and sticks.’ Maybe barbecue everything. Even balls of rice! Must think of something new.  As for selling our rooms - how do we do that with no electricity and no fuel for our generators? Maybe tents on the streets and on the beach for our discerning traveller. Another new thing to think and work on.
Harpo Gooneratne - CEO and Founder of Harpo's Hotels, Cafes & Restaurants
The restaurant industry is tasked with something that I have never seen. We fought a war, coped with a tsunami, Easter Sunday, and Covid but what we are going through now is unprecedented. Every day is a new day; purchasing gas, searching for raw material and ingredients, prices of imported items doubled or tripled, and, even then, its availability is unsure. It is like fighting an invisible battle. We are currently working with temporary fixes and if the intention is to promote tourism where some of the dollars are coming from, one has to prioritize their act and try to sort it all out before it gets any worse.  Restaurants will close down, staff will be without jobs, many staff are trying to get out of the country looking for greener pasture.  HR issues. It is a sad situation and staying positive and sourcing local ingredients will be the way to go. One cannot allow this industry to collapse.
Dinesh Wijesinghe - Managing Director MSD Capital Holdings
It would be stating the obvious to say that we are finding it increasingly difficult to conduct a smooth operation due to constant power outages and numerous shortages that affect productivity and profitability.  It is becoming increasingly difficult to maintain the availability of food and beverage products listed in our menus due to even basic essentials such as cooking oils and even local meats and vegetables being in short supply or totally unavailable in the market at any price. 

What I foresee for the immediate future is a period of acclimatization to the realities of the current economic environment and in the medium to adapt and innovate ways to be able to operate our businesses at possible minimum operable levels.  This will invariably mean frequent adjustments in our product on offer as well as pricing. I feel that most customers, both local and foreign, will readily understand any such adjustments as they are well aware of the conditions that compel us to do so. 

I also anticipate diminished earnings for the industry as customers become more frugal in their spending habits as they will be impacted by the constantly rising cost of living. However, in the long term, provided the government implements the urgently needed economic reforms to stabilize the dollar, the volatility of which has caused the current chaotic situation, we will be able to return to a more stable and sustainable business environment by the end of the year 
Dushyantha Tittawella- General Manager Residence by Uga Escapes
I certainly believe that the industry will suffer further. More and more people will leave this industry in the near future. There will be a time when restaurants will become occasional spots that people will frequent since the cost is inflating rapidly;  selling prices would break the records of increasing prices to maintain profit margins. And restaurants will not have huge, printed menus. We will have to use local ingredients and convert them and create dishes wisely. Therefore, the future of the restaurant business would face a huge threat of sustaining and sailing through. I would think the micro-level businesses would disappear due to lack of raw material and at the same time, large operators will sustain at low-profit margins. If the government does not involve itself directly to solve these issues we will lose so many restaurants because they simply will be unable to operate.

Natalie Jayasuriya Rodrigo -Co-Founder - Flamingo House/Love Bar
The entertainment industry has been greatly affected in the past three years, from the time of the Easter bomb and then the pandemic. We will, as we always have, pull through no matter what restrictions we have .. it has always been a fight in our industry, no matter which government has been in power.  We do not expect any different this time, no matter what promises have been made. 

As of now, we have had to raise our prices due to the hike in overhead costs. A lot of brands are not available on the market, so we are making do with what is available week by week. Guests are still patronizing our venues but we are unsure for how long.  The trick, I believe, is to be able to adapt to whatever curveball is pitched at us and keep forging ahead.


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