At a time when hoteliers are going through a rough patch with dwindling revenue because of poor guest occupancy amid Covid-19, the government-declared Tk1,000 crore stimulus package is a ray of hope for their survival in these difficult times.
But many banks are reportedly turning them down for low-cost loans on the pretext that the hospitality sector is "not attractive" for lending as recovery from them is not up to the mark.
Last July, the Bangladesh Bank declared the stimulus package, so hotels and amusement parks get loans in the form of working capital at 4% interest rate for paying salaries to employees.The repayment tenure is a maximum of one year.
Khaled-Ur-Rahaman Sany, co-chairman of the Bangladesh International Hotel Association's disaster management committee, told The Business Standard that most hotels had not been able to pay installments of previous loans since last year with almost zero business amid the pandemic. So, banks are now keen on adjusting the outstanding loans with stimulus ones, instead of giving fresh loans, which will not serve the intended purpose, he added.
"We have not paid staffers since April last year and recently applied to a bank for a loan as working capital. The loan is now under process. But some hoteliers in Cox's Bazar have informed me that banks are showing various excuses to avoid disbursements," Khaled said, also the managing director of Golden Tulip The Grandmark Dhaka.
The 4-star category chain hotel has 100 out of 140 staffers at work. Others were furloughed last year because of poor occupancy.
There are around 1,200 hotels, including 43 star ones, in the country where around five lakh people are employed, according to sector insiders.
The tourism and hospitality sector is one of the worst affected sectors, but it did not get any bank support under the government-declared stimulus package meant for the service sector last year, the industry insiders claimed.
Syed Mahbubur Rahman, managing director and chief executive officer of Mutual Trust Bank told TBS, "In specific, our bank has no case of denial to give loans to hoteliers under the new stimulus package. But in general, the hospitality sector is not in the good books of banks regarding payments of non-performing loans.
"Banks show reluctance when clients come to get loans only for hotels, resorts or theme parks. Because they could not pay previous instalments amid the pandemic," he added.
The banker also said banks were not getting repayments of stimulus loans from other small and medium enterprises even after one year. "In this situation, how will banks be interested in disbursing new loans?".
The fund will be treated as a refinancing scheme and the central bank will provide 50% of every loan under the package.
Businesses of the sector which had earlier taken out loans from other stimulus schemes of the central bank will not be allowed to get loans under the new scheme.
Owners of hotels and theme parks will have to take loans from banks with which they already maintain accounts to run business, said the central bank.
"When I reached out to banks concerned in Chattogram and Cox's Bazar, they told me that they did not receive Bangladesh Bank's notice regarding the stimulus package. Banks' response is very slow and they show many formalities," said Hakim Ali, president of the Bangladesh International Hotel Association and also owner of Hotel Agrabad.
Meanwhile, the government has decided to reopen hotels, resorts, tourist spots and community centres with half capacity following hygiene rules from 19 August. The cabinet division issued a notification in this regard on Thursday.
The decision of lifting restrictions on tourist spots will bring some kind of relief for Cox's Bazar hoteliers who are already in a tight corner.
Abdul Quadir Mishu, director of 5-star Ocean Paradise, told TBS, "Currently, some star hotels in Cox's Bazar have 6-12% occupancy as only a few foreigners are staying in these hotels for having links to Rohingya camps. Our hotel has guests in only five out of 200 rooms.
Cox's Bazar has around 450 hotels, motels and resorts. The tourist spot reopened for travelers on 17 August last year. Then, most star hotels had seen the pre-pandemic level occupancy till March this year. But in April, the Cox's Bazar district administration announced the closure of all recreational centres, including the sea beach, in an effort to curb the fresh wave of the novel coronavirus.
Star hotels in Dhaka have only 20% occupancy
The star hotels in Dhaka currently do not have more than 20-25% occupancy on average.
Janealam Shawon, director (revenue strategy) of Dhaka Westin, said, "We now have 20-22%, down from 30% last March."
Sharfuddin Newaz, director (sales and marketing) of Radisson Blu Dhaka, said it had some fixed aircrew guests. Now, 50 out of 200 rooms are occupied.
However, some hotels have more than 50% occupancy with Chinese guests involved in various development projects.
An official of Hotel Sarina said it had around 70% occupancy at this moment. The Chinese guests have to maintain hotel quarantine before leaving Bangladesh. But such types of guests are not available in most hotels.
The amusement or theme parks are nearing permanent closure as owners are struggling to pay salaries, bank loans and hefty maintenance costs since April.
They are also allowed to get loans under the new stimulus. The country has over 300 amusement parks, dozens of whom went out of business in the face of continued losses due to Covid-19, according to the Bangladesh Association of Amusement Parks and Attractions (BAAPA).
Anup Kumar Sarkar, coordinator of BAAPA, said, "We will ensure every safety measure so that people can enjoy the parks without concern."