A Decade After Civil War, Sri Lanka Dives Into Luxury
(Bloomberg) -- In 2004 businessman Malik Fernando bought Castlereagh, a decrepit bungalow in the terraced, emerald hills of Sri Lanka’s sprawling tea country. The structure had no roof. “It was in absolute shambles,” he recalls. “There were cattle roaming through the whole house.”
But it had one irresistible asset: “It was what was available,” he says, shrugging and welcoming me to the neat, gingerbread-style mansion on a clear, 80F winter day. That was enough to make it the perfect place for the area’s first luxury hotel.
When Fernando closed 13 years ago on Castlereagh, Sri Lanka’s government was in a cease-fire with a secessionist militia, the Liberation Tigers of Tamil Eelam, and optimism was in the air. He saw an opportunity to cater to fans of his family’s burgeoning tea farms, who were flocking here from around the world. It took him a year to update the colonial ruin, named after a long-ago tea picker who lived there, into a parquet-floored paradise with five bedrooms and a fleet of butlers in sarongs servicing a hillside pool. Over the next year, he did the same thing with three more bungalows, giving each a different style, its own restaurant, and rooms facing the tea fields. Then the cease-fire ended.
Standing with Fernando in front of Castlereagh, with its lakefront views and blooming purple gardens, it’s hard to reconcile that it was just a decade ago that Sri Lankans hid for cover from daily bomb threats. But locals remember it like it was yesterday. The civil war stretched from July 1983, when the Tamil Tigers first struck the Sinhalese government’s armed forces, until May 2009, when the militia lost its last fight. In between, Sri Lankan civilians were in the crossfire.
In the three years that followed the 2004-05 cease-fire, about 350,000 of them were displaced from their homes, 2,000 disappeared or were kidnapped, and 9,000 died. Fernando harbors memories of bomb warnings arriving during dinner, planes getting blown up at airports, and a constant current of fear for his wife and children. Serving jasmine-scented gin and tonics to tourists was a bit beside the point.
But he was among the lucky few business owners who could afford to hang on until better days, thanks to his family’s tea empire, Dilmah. So he welcomed a trickle of visitors to what is now a 27-room resort complex he calls Ceylon Tea Trails—and waited for change.
Today, Fernando’s hotel company, Resplendent Ceylon, stretches from inland tea country to the palm-fringed beaches on the island’s southwestern shore. Castlereagh remains the heart of it all: a place where lazy lunches can consist of finger-size prawns and single-estate silver-tip tea that sells for $1,000 per kilo, and where the perpetually sold-out hotel rooms start at $675 a night.
Excess isn’t the intention. Rewriting Sri Lanka’s narrative and casting a global spotlight on the country’s assets—cultural, natural, and agricultural—is. There is a tremendous upside in doing so: Countrywide, the number of visitors has jumped from fewer than 450,000 in 2009 to more than 2 million in 2016. But with the luxury hotel industry in its infancy, the bulk of tourists traditionally have been backpackers at surf shacks. Sri Lanka is poised to welcome a wider audience.
Fernando, 52, had picked up my sister Jenifer and me in a seaplane in Colombo, the nation’s capital and largest city. When we land in tea country, he escorts us through what he jokingly calls the CIA: Castlereagh International Airport, whose runway is a reservoir. Staffers wait at the end of a wooden pier to gather our luggage.
The unevenly paved, single-lane road to the resort passes packed terraces of Camellia sinensis bushes, crumbling 19th century colonial buildings, and rickety tuk-tuks that grant our van right of way. The road surveys the land that made Fernando’s family famous: His father, Merrill, created Sri Lanka’s first fair-trade tea company in 1988. Today, Dilmah sells in more than 100 countries worldwide. Its mission, then and now, has been to grow and package pure Ceylon tea at the source. (The company dramatically prunes the 140-year-old plants every few years, then manually harvests individual leaves every five to seven days.) Rather than blend small amounts of Ceylon with cheaper varieties from other countries, as its competitors do, Dilmah works only with Sri Lanka’s prized crop. That means its talent and profits are fully retained within the country.
During the war, tea exports held steady, and to this day the industry remains a critical part of the economy, directly employing 1 million Sri Lankans (25,000 work for Dilmah alone). “From a GDP perspective, though, tea isn’t as important as it used to be,” Fernando says. Tea has accounted for 2 percent of the country’s gross domestic product for years; as of 2017, tourism claims 5 percent. In other words, tea allowed the country to survive, but tourism is helping it thrive.
Halfway up the road to Tientsin Bungalow, a squad of grinning young townsmen bursts from around a bend in the road, some dressed in plaid button-downs and some in sarongs, singing in Sinhalese and hoisting a float covered in a rainbow of flowers, tinsel, and embroidery. Inside is a gilded figurine of Surya, the Hindu sun god. Behind the men, an entire Tamil community spills out, singing and dancing for the Pongal harvest festival. We wait for them to pass. “You can’t rush things here,” Fernando tells us. “You just have to slow down and enjoy the ride.”
Fernando has just brought his hotel company’s head count to 450 with his latest endeavor, Wild Coast Tented Lodge, on Sri Lanka’s southeastern tip. It opened in November with 28 spaceshiplike suites on stilts, set between Yala National Park, a haven for endangered leopards, and towering sand dunes that frame the Indian Ocean. After Tea Trails and a beach resort near Galle, Wild Coast is Resplendent Ceylon’s third property; taken together, the circuit gets a jingle-ready tag line: “Tea, sea, and safari.”
Although its resorts share the same attention to detail as the best properties in the world, what distinguishes Resplendent Ceylon from, say, the Aman resorts on Sri Lanka’s beaches is a commitment to giving back: Fernando’s operation is set up to funnel profits to MJF Charitable Foundation and Dilmah Conservation, his family’s nonprofits. Together, they support more than 120 conservation and community projects across the island. MJF itself is the largest private foundation in Sri Lanka. It contributes to entrepreneur mentorships, sustainable agriculture programs, and a culinary school for disadvantaged youth—initiatives that earned Fernando’s father the prestigious Business for Peace Award, an annual prize granted by previous Nobel laureates. By 2020, MJF estimates it will have had an impact on 200,000 lives across the country.
Much of that is thanks to Fernando himself, who acts as a trustee at MJF and imbues his hotels with its ethos. Near Tea Trails, MJF operates a children’s day care and a wellness clinic; its nature-focused counterpart, Dilmah Conservation, is creating a wildlife research station at Wild Coast where Sri Lankan scientists can compare findings and produce policy papers to inform future legislation.
Guests may not even realize that 10 percent of Resplendent Ceylon’s profits go back into Fernando’s initiatives. But that philanthropy is one thing that appeals to Philippe Gombert, president of Relais & Châteaux, the independent hotel group to which Fernando’s resorts belong. “A commitment to the local community is one of the stronger pillars of the Relais & Châteaux brand,” he says. Fernando’s engagement, he adds, is among the best he’s seen.
The next day we hop on a seaplane for a half-hour’s flight down to the safari-style Wild Coast Lodge and watch the rippling landscape flatten along the way. Upon arrival, we’re ushered into a dramatic, arching pavilion made from thatched bamboo that opens to the crashing waves of the Indian Ocean. Our villa is a futuristic bubble, stitched in undulating waves from PVC-coated polyester and featuring oversize portholes that overlook the jungle. Outside, there’s a private plunge pool. That night we dine on Sri Lankan shrimp curry, stewed okra, and lentil dal at a moonlit table in the sand.
On 2,000 acres between the property and nearby Yala, Fernando wants to establish his most ambitious initiative: a private wilderness reserve, like those dotting Africa. It’s set to open next year and would help reduce congestion in the national park—which can see “jungle jams” of 50 Jeeps swiveling madly toward a single animal—while giving wildlife more protected room to roam.
Yala may be one of the world’s best places to see leopards, but because of overcrowding, the staff at Wild Coast varies the expeditions. Along with a chef we go to a market in the tiny town of Kirinda on a muddy dock where fishermen unload king mackerel, marlin, and enormous jackfish from colorful boats. Locals—mostly men, with a smattering of women and children—shout prices at the vendors before swapping cash and loading up motorbikes. We choose a moderate-size halibut for lunch and throw it onto an ancient scale. It costs about $2, and the chef serves it steamed in a banana leaf with a dizzying array of local salads a few hours later.
When we finally head to Yala, it’s with Chandika Jayaratne, an environmental lawyer who switched careers when luxury tourism made guiding a sufficiently lucrative career path. Job creation is one of the biggest benefits of tourism growth in Sri Lanka, says Tiffany Misrahi, who focuses on travel and tourism at the World Economic Forum. According to her research, it takes only 30 first-time visitors to the country to create one job for a local. This can slow the trend of young adults leaving their hometown for Colombo or Dubai.
Jayaratne adeptly picks out the page-flipping sound of peacocks mating, identifies birdlife—jungle fowl, bee eaters, striped painted storks—and schools us on the area’s quirky geology, including massive boulders with evocative names such as Darth Vader Rock (it looks like it’s wearing a helmet).
To avoid gridlock in the bush, he takes us to a relatively quiet part of the park an hour away from the lodge. Within moments of arriving, I hear a squawk and an angry series of snorts. Jayaratne floors the gas pedal to lurch the car forward through a dense, tangled forest.
As we swerve down the narrow dirt road, a herd of buffalo charges loudly in our direction, angrily frothing up a shallow pond. From their midst, a leopard darts out, leaping into a bristly bush. I see only the flash of her spotted hide, and then it’s nothing but gnarled horns smashing into the greenery. “Holy shit,” we all repeat in whispers like an incantation, hearts racing, not knowing whether to watch or look away. This is an apex predator with plenty to lose. Estimates indicate that there are only 250 leopards in all of Yala, and they’re a main draw for tourists to the entire region. “Please get out, please get out, please get out,” Jayaratne whispers to the cat, until finally she catapults herself out of the bush and onto a tree in a streak of spots. Eventually a lightly injured buffalo calf emerges from within the pack, and we piece together the drama. “They were both lucky to get out alive,” he says.
By the time I plan my next trip to Sri Lanka—and I will definitely return—it’s likely that Fernando will have brought his circuit to five hotels or more. Up next is a property he wants to build on pylons in the shadow of Sigiriya, the famous “lion rock” monument in the central part of the island. That will be followed by a Robinson Crusoe-inspired beach resort in Trincomalee. He estimates that within three years, Resplendent Ceylon will employ 800 Sri Lankans. That’s nowhere near the size of Dilmah’s workforce, but it’s certainly significant.
“We’re flying the flag for Sri Lanka the same way my family has at Dilmah over the years,” Fernando says. In tourism as in tea, it’s all about the positioning, the packaging, and the pricing. “My success is my country,” he says, “and it’s time to stop underselling it.”
©2018 Bloomberg L.P.