Luxury hotels recovering thanks to local guests

Luxury hotel businesses in Bangladesh are on the path of recovery to pre-pandemic levels, with local customers playing a vital role in renting rooms, holding a large number of events and seeking food made by their restaurants. 

People's inclination to avoid crowded areas, high incomes of a section of society and social media are propelling local customers towards availing hotel services.

All four listed companies having hotels saw better performances year-on-year in the July 2021 to March 2022 period, especially centring the two annual Eid vacations.

Non-listed companies also experienced a better occupancy rate, higher number of guests at restaurants and a large number of events.

"In some cases, we rebounded fully, say, like in restaurant business, but we are yet to rebound to the pre-pandemic level in every sphere," said Shahidus Sadeque, director of marketing and business promotion at InterContinental Dhaka.

Foreign travellers are still not arriving in the same numbers as in 2019 but domestic consumption soared, so 30 rooms to 40 rooms are occupied daily with local guests and it rises on the weekends, he said.

"We have created the demand by offering attractive packages and that worked well," he said.

Social media also influenced local guests into booking rooms and dine at the higher-end restaurants, he said, adding that a huge number of rooms were occupied during the Eid holidays.

Bangladesh Services, the company owning InterContinental Dhaka, InterContinental Dhaka Balaka Executive Lounge and Bangabandhu International Conference Center, logged a profit of Tk 24 crore in the July-March period of fiscal 2019-20.

In contrast, it had incurred a loss of Tk 81 crore in the same nine months of the following fiscal year.

However, in the nine-month period of fiscal year 2021-22, its business slightly improved with the loss reducing 8.4 per cent to Tk 74 crore, says its financial report.

Worldwide, the hospitality and tourism sectors are two of the worst-hit sectors of the pandemic.

Due to lockdowns, restrictions on people's movements, international flights and holding events, the business of the hotel was hit hard in the year, it said.

Mohammad G Jisan, manager for sales of Radisson Blu Dhaka Water Garden, said their business has picked up considerably.

At the beginning of the pandemic, room occupancy was at only 40 per cent. In the last two Eids, all 200 rooms were fully booked for four days to five days in a row.

Following Eid-ul-Azha, the occupancy is now at 70 per cent, said Jisan, adding that the number of local guests rose during the pandemic.

"As Cox's Bazar alongside many tourism sites were shut down during the pandemic and many people wanted to avoid crowded areas, people chose us," he said.

"If we talk about the overall recovery of the business of hotels, it is not complete yet," he added.

"In the meantime, inflation has increased significantly in different countries of the world. That has an impact on our business," he added.

As taka depreciated, room rent and foreign travel costs rose. So, they either shortened their stay plans or tried completing their work online, he said.

Among the listed hotels, the profit of The Peninsula Chittagong soared 55 per cent to Tk 8.55 crore in the first nine months of fiscal year 2021-22.

In the same period, profits of the Sea Pearl Beach Resort & Spa dropped 15 per cent to Tk 12.22 crore.

The Unique Hotel and Resorts, the owing company of The Westin Dhaka and Sheraton Dhaka, secured a profit of Tk 88.54 crore in the period whereas it incurred a loss of Tk 9.63 crore in the same period of the preceding year, shows data of Dhaka Stock Exchange (DSE).

Saadman Salahuddin, cluster assistant director of marketing communications at Sheraton Dhaka and The Westin Dhaka, said, "Now business situation is better than the pandemic level."

"For instance, 85 per cent of the recovery has been done in terms of business compared to the pre-pandemic level," he said.

There are no travel restrictions now and many people are vaccinated so they are confident in travelling. So, the room occupancy rate is increasing, he said.

Salahuddin said at present the room occupancy was close to pre-pandemic levels. If no other big issue arises, the situation will definitely normalise in the near future, he said.

"Our events are also growing. The number of events that used to happen before the pandemic is not the same as it is now, but it is getting closer," said Salahuddin.

In the fiscal year starting in July 2020, hotels and tourism businesses were severely affected due to Covid 19 as the hotels were closed for several months and programs were prohibited.

Even after they had opened again, the hotel business had to be run abiding by various restrictions.

At this time, hotels are more focused on selling food to sustain the business. Several hotels also launched takeaways or home delivery services.

Sabrina Mridha, associate director for marketing and communications of Amari Dhaka, said, "Business is picking up. However, we have not yet returned to the pre-pandemic level. Business is now better so far compared to the previous year."

She said room occupancy was still not the same as before. It is floating between 60 per cent to 70 per cent. Food and beverage and other segments have recovered to 50 per cent to 70 per cent of the previous level, she said.

"We are still offering discounts on various segments based on the type of guest to make a full recovery in business. Because we still don't get the number of guests targeted as of year 2019. That's why our offers are being made keeping that in mind," said Mridha.

"To be honest, we haven't faced any challenges so far with global inflation and the dollar crisis," she added.

According to the Ministry of Civil Aviation and Tourism, there are currently 17 five-star hotels in the country.