HOSPITALITY INDUSTRY SHATTERED BY COVID-19
- Tk9,705 crore in business losses from Feb-June
- Tk2,000 crore plus net income loss in 5 months
- Tk20,000 crore expected year-end business loss
- 3 lakh people have already lost jobs
- Tk30 lakh minimum electricity bill for a star-rated hotel
- Hotels not getting bank loans under stimulus packages
- 2 years at least for industry to reach pre-Covid-19 level
This year and the next few were supposed to be a good time for people engaged in the hotel and tourism sector in Bangladesh. Just in 2020 alone, at least four star-rated hotels were scheduled to enter the market and over a dozen more were in the pipeline.
But the Covid-19 pandemic has appeared as a killer for the hospitality sector, directly impacting livelihoods of around 3 lakh people in the industry.
Yet, no one in the government – the ministry concerned, the tourism board or the Parjatan Corporation – has done anything for the industry, worrying industry players about survival.
"We had no work for over four months. Now many of us selling cattle and mangoes online for livelihood," Taufiq Rahman, CEO of a tour operating company named Journey Plus, said at a webinar organised by The Business Standard on Sunday.
Hoteliers, tour operators, and tourism specialists attended the discussion.
Around 700 tour operators were active in the pre-Covid-19 period, he said. Most of them shut down their offices and laid off employees, said Taufiq, also the general secretary of the Pacific Asia Travel Association's (PATA) Bangladesh chapter.
PATA Bangladesh estimates that the industry has already incurred losses of around Tk9,705 crore in the last five months till June. As the rampage of the coronavirus continues, the fallout and business loss could reach far higher – around Tk20,000 crore by the end of the year.
At the moment, hotels are in double trouble. They have almost zero income, but also have to pay hefty utility bills and taxes amid the pandemic.
Shahid Hamid, a long-experienced hotelier who is now the executive director of the Dhaka Regency Hotel and Resort, said as hotels do not have incomes now, layoffs and furloughs have become a common thing in the industry.
"Hotels' business has gone down by 95 percent due to the pandemic. But a star hotel has to pay a minimum utility bill of Tk30 lakh per month. Also, there are VAT and tax issues," said Hamid.
He expected support from the government as star-rated hotels in the country paid, on an average, Tk300 crore to the national exchequer every year.
"A five-star standard hotel pays Tk25-30 crore yearly as VAT and taxes. Unfortunately, the sector did not get a single penny from the government at a time when it is fighting for survival," he said.
Md Al Amin, general manager of Six Seasons Hotel, said, "My hotel has a 5-10 percent occupancy rate now, while it was 75 percent before the pandemic in the same season.
"We have already suffered 130 days of Covid-19's impact on the sector. If we do not get subsidies on utility bills and VAT-tax waivers, it will not be possible to run the business for the next one or two years."
Without any business, he said, they have to spend at least Tk50 lakh a month for maintenance.
He said he has applied for loans under the government stimulus package, but the terms and conditions are very critical. He said no hotel has gotten loans yet.
Al Amin suggests emphasising customer preference, digital transformation and skill development of manpower for the sector in the upcoming days.
Kazi Wahidul Alam, an eminent tourism specialist and also editor of travel magazine The Bangladesh Monitor, said, trust is a big factor for tourists across the world.
"Fake coronavirus certificates have destroyed the image of Bangladesh. So, recovery amid this new normal will become more challenging for us," he said.
Considering the hotel and tourism industry to be on track, he said "We have to prioritise recovery from Covid-19. And obviously, our good image has to be rebuilt so that the situation can return to normal. Then the travellers will prefer to come to Bangladesh."
He mentioned that there is a lack of initiatives from the policymakers to assist the sector.
"A crisis management committee for the tourism and hospitality sector, consisting of the stakeholders, is a must to face the current crisis. Besides, the tourism ministry has to be run with combined efforts," he added.
Sharier Khan, executive editor of The Business Standard, delivered the welcome address while Sajjadur Rahman, deputy editor, moderated the session.