Westin, top listed hotels see business slump

Winter is known as the carnival season for the hotel business in the country. People involved in the industry eagerly wait for the season to make a big profit.

However, such has not been the case this year. This season has not had the expected dynamism. Luxury hotels owned by the companies listed in the share market saw a slump in business in the first six months of the current fiscal year.

These hotel owning companies had good growth in the same period in the last fiscal year (2018-19).

Officials of these companies say business has been sluggish this year because of increased competition and the increased cost of management. 

Three listed companies involved in the luxury hotel business are: Unique Hotel and Resorts Ltd, The Peninsula Chittagong Ltd and Sea Pearl Beach Resort and Spa Ltd.

Unique Hotel and Resorts Limited

Unique Hotel and Resorts runs The Westin Dhaka and Hansa- A Premium Residence in Dhaka. They are going to introduce another five-star hotel – the Sheraton.

However, in the first half of the current fiscal year, the company's revenue from Westin and Hansa fell by 1.34 percent and stood at Tk111.64 crore. At the same time, the company's net profit slid by 19 percent and stood at Tk29.91 crore.

In the first half of the previous fiscal year, the company's revenue rose by nine percent and net profit went up by four percent.

Md Sharif Hasan, company secretary of Unique Hotel, told The Business Standard, "The hotel business is now going through a lean phase. However, there is nothing to panic over."

He said, "We have three ongoing projects. The company's administrative cost has increased because of these projects and the profit fell. Both revenue and profit will increase when the commercial activities in the projects start."

The company's share price did not change in the Dhaka Stock Exchange on Wednesday (January 29, 2020). Its closing price of was Tk46.70 that day. 

In the last one year, the highest price of its share was Tk55.40 and the lowest Tk41.

The Peninsula Chittagong Limited

The Peninsula Chittagong has been in the luxury hotel business in Chattogram for a long time. The company is building a five-star hotel near Chattogram Airport which is expected to be completed next year. 

In the first six months of the current fiscal year, the company's revenue from the hotel and restaurant business increased by 14 percent and stood at Tk19.97 crore. During this period the company's net profit was Tk3.54 crore, a decrease of 53 percent.

In the same period of the previous fiscal year, the company's revenue increased by 31 percent and net profit by 97 percent.

Md Nurul Azim, company secretary of Peninsula Chittagong Ltd, told The Business Standard, "We could not raise the price of services because the competition in the hotel business in Chattogram has increased. The company's profit margin decreased as a result."

The company's share price in the Dhaka Stock Exchange increased by 4.79 percent on Wednesday and reached Tk19.50 at close of day.

In the last one year, the highest price of the company's share was Tk31.90 and the lowest Tk16.10.

Sea Pearl Beach Resort and Spa Ltd

The company has been in the hotel business at Inani Beach in Cox's Bazar for some time, and they are also building a resort in Bandarban.

In the first half of the current fiscal year, the company's revenue increased by 7 percent and stood at Tk30.56 crore. During this period the company's net profit was Tk3.22 crore, a fall of four percent.

During the same period in the previous fiscal year, the company's revenue increased by eight percent and the net profit increased by one percent.

On Wednesday, the company's share price fell by 3.98 percent in the Dhaka Stock Exchange and reached Tk55.70 at close of day. 

In the last one year, the highest price of the company's share was Tk61.40 and the lowest Tk17.60.