- In conversation with Tonik CEO Kokularajah Sundararaj
Under Acorn Group’s new hospitality venture Tonik, Sri Lanka is being pitched as a place that should be sold through the character of each stay. That is the argument Tonik CEO Kokularajah Sundararaj makes when he speaks about where the industry is heading and where he believes Sri Lanka has fallen short.
In his view, the old language of hospitality, rooms, amenities, views, and stars no longer captures what a growing share of travellers are actually buying. What matters now is whether a stay leaves them with something worth remembering.
He put that change down partly to how travel habits have changed after the pandemic. People, he said, now thought harder about how they spent their time, where they went, and what they took back from it.
That thinking sits behind Tonik’s attempt to build a hospitality brand around stories rather than a standard template. Sundararaj believes that every property owner has something to say about the place they have built or restored, whether it is linked to the architecture, the setting, the family, or the heritage of the location. Guests, meanwhile, travel with their own expectations and leave wanting a story of their own. Tonik’s role, as he sees it, is to bring those two things together.
That is also where he placed Sri Lanka’s larger challenge. For years, the country has leant too heavily on price, scenery, and generic promotional slogans, while underinvesting in how it presents itself to the premium end of the market. Sundararaj argued that Sri Lanka cannot keep trying to compete by being cheaper than everyone else, especially if it wants to draw more high-spending visitors.
“You cannot say we are the cheapest or most affordable in the region, or say we have five-star hotels or six-star hotels. That will not make sense. It has to have a celebration. It has to have an identity.”
A mismatch in national positioning
Sundararaj believes Sri Lanka has plenty to sell, but not enough clarity on whom it is selling to. The country’s tourism base is still overwhelmingly concentrated in the lower end of the market. According to him, around 96% of tourism falls within the broad long-tail segment, while only about 4% sits in the premium space. That smaller segment has not expanded much in recent years, even as new rooms and new brands continue entering the market.
That mismatch, he argued, had commercial consequences. Hotels may spend heavily to build and maintain premium products, but if the country is still marketing itself in a way that speaks mainly to budget travellers, the economics will not add up. The issue is that it has not done enough to make the right traveller believe the country can meet their expectations. He pointed to the Maldives as a useful contrast.
“People just think, if I go to that country, will they be able to cater to me? Will I be safe when I go there? Will I have the best experience, including food? For that market, we should be able to show that we can address and take care of their needs.”
In his telling, the gap is not merely about hotels; it is about national positioning. Sri Lanka, he said, needed stronger market development abroad, especially in Europe and other higher-value source markets, and it needed more consistent coordination between the private sector and the State.
“The private industry cannot handle this by itself. The Government tries to bring in people and the engine is not working right. People have worked in silos, so they are unable to focus all their energy on one mission.”
That frustration feeds into how Tonik is being built. The company does not want to turn every property into the same thing. In fact, he said that is exactly what it was trying to avoid.
“Tonic, you cannot drink it alone. Tonic is always making something taste better. We are exactly like that.”
Properties rooted in locality and story
Unlike larger brands that may stamp a uniform identity across all their properties, Tonik wants each property to retain its own character.
The company uses a framework of 187 audit points, based partly on international hospitality standards, and properties must pass 80% of those benchmarks. Those standards cover the basics that premium guests expect, including safety, health, security, and service. But meeting those standards alone is not enough.
“If I am to be very honest, it can be 100%. But we might not take it as Tonik if it does not have any story to it, or if it does not have soul to it.”
That has already led the company to reject some properties, including well-finished ones, because they felt too generic. The other 20%, the part beyond basic standards, is what he sees as the main part of the model.
Tonik is of the view that a property must feel rooted in where it stands. In the south, it should feel like the south; in the hills, it should carry the mood and texture of the hills. Architecture, setting, and the rhythm of the place should not be treated as decoration. They should shape the stay.
This idea runs through the way Tonik wants guests to experience its villas and boutique properties. Sundararaj said the company was trying to move away from a purely transactional style of hospitality, where the room is ready, the checklist is complete, and everything else comes at an extra charge. Instead, certain experiences should be part of the stay from the outset.
He said that the same thinking shaped a feature Tonik called the ‘heart of the villa,’ a central shared space, whether a living room, terrace, or pool area, where guests are encouraged to gather. Depending on the property and time of day, food and drinks may be served there without charge.
Tonik is not trying to be everything to everyone. Sundararaj said that the company was looking for travellers who wanted something different from ordinary hotel travel and were willing to pay for it. In spending terms, he placed that at above $ 400 a night. That may include residents as well as foreign guests, although in practice he noted that the upper end of the market tended to be heavily international.
“Resident or non-resident, it does not matter; I would not categorise our travellers in that way. We are looking for the traveller who wants to blend into the villa or the hotel they want to stay in, who is looking for that unique stay, trying to stay away from the usual life, who wants something different, and who wants to take back a good story.”
Addressing sector shortcomings
Sundararaj also addressed the weaknesses he saw in the industry. One is people. Retention, he said, had become a serious problem. Sri Lanka has long spoken of hospitality as part of its nature, but he believes that is being eroded.
“One of the biggest issues we have is retention and talent. There used to be a time when we were told Sri Lankans were born with hospitality. It is in our DNA. But if you now go to the market, it is being diluted little by little.”
The deeper problem, in his view, is that hospitality without care becomes little more than a commercial exchange. “Hospitality without a heart is just a transaction.”
He also noted that Sri Lanka’s tourism sector was still not analytical enough. Hotels and brands do not always think carefully enough about where their audience is, how to reach them, and how to place themselves in the markets that matter. He compared that weakness to the fast-moving consumer goods industry, where shelf placement, timing, and targeting are studied with far greater discipline.
He believes the country’s natural and cultural range is unusually strong for a destination of its size. Few places allow travellers to move across such different climates, landscapes, and histories within a matter of hours. That, he said, was a real advantage if the country could package it properly.
“You can operate three resorts here, one in Jaffna, one in the south, and one in Nuwara Eliya. Three different climates – fantastic. You cannot do this in the Maldives.”
That range, if supported by better positioning and better execution, could give Sri Lanka a stronger place in premium travel than it currently holds. Tonik’s bet is that the country need not invent a new identity, but that it needs to present its existing identities better, one property at a time.
“To the world, we only say that Sri Lanka is your home away from your home,” he said.