Covid brings hotel, resort business to a standstill
Skip to main content
  • Home
  • Economy
    • Aviation
    • Bazaar
    • Budget
    • Industry
    • NBR
    • RMG
    • Corporates
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Features
    • Book Review
    • Brands
    • Earth
    • Explorer
    • Fact Check
    • Family
    • Food
    • Game Reviews
    • Good Practices
    • Habitat
    • Humour
    • In Focus
    • Luxury
    • Mode
    • Panorama
    • Pursuit
    • Wealth
    • Wellbeing
    • Wheels
  • Epaper
  • More
    • Subscribe
    • Videos
    • Thoughts
    • Splash
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • COVID-19
    • Games
    • Long Read
    • Interviews
    • Offbeat
    • Podcast
    • Quiz
    • Tech
    • Trial By Trivia
    • Magazine
  • বাংলা
The Business Standard

Saturday
February 04, 2023

Sign In
Subscribe
  • Home
  • Economy
    • Aviation
    • Bazaar
    • Budget
    • Industry
    • NBR
    • RMG
    • Corporates
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Features
    • Book Review
    • Brands
    • Earth
    • Explorer
    • Fact Check
    • Family
    • Food
    • Game Reviews
    • Good Practices
    • Habitat
    • Humour
    • In Focus
    • Luxury
    • Mode
    • Panorama
    • Pursuit
    • Wealth
    • Wellbeing
    • Wheels
  • Epaper
  • More
    • Subscribe
    • Videos
    • Thoughts
    • Splash
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • COVID-19
    • Games
    • Long Read
    • Interviews
    • Offbeat
    • Podcast
    • Quiz
    • Tech
    • Trial By Trivia
    • Magazine
  • বাংলা
SATURDAY, FEBRUARY 04, 2023
Covid brings hotel, resort business to a standstill

Economy

Kamran Siddiqui, Shafayat Hossain & Sayeed Alamgir
03 July, 2020, 01:05 pm
Last modified: 03 July, 2020, 01:32 pm

Related News

  • The Peninsula Chittagong incurs loss in Jul-Dec
  • Dhaka Regency Hotel celebrates Christmas and New Year
  • Dhaka Regency holds Bijoy Kid’s Art Competition 2022
  • The Palace Luxury Resort wins South Asian Travel Awards
  • The hotel that never lands

Covid brings hotel, resort business to a standstill

In this sector, thousands of people have already been sent on leave without pay

Kamran Siddiqui, Shafayat Hossain & Sayeed Alamgir
03 July, 2020, 01:05 pm
Last modified: 03 July, 2020, 01:32 pm
Dhaka Regency Hotel and Resort. Photo: collected
Dhaka Regency Hotel and Resort. Photo: collected

With rapid economic growth – 6.5 percent on average – for the past one decade, hundreds of hotels and resorts were built in different parts of the country, especially in the tourism areas and big cities.

Entrepreneurs built the hotels and resorts with 60-70 percent bank borrowing and the remaining part was their equity.

The Covid-19 pandemic has brought the sector to a standstill. For many of these hotels, layoffs have become the ground reality. In this sector, thousands of people have already been sent on leave without pay.

Owners are on a double-edged sword – they do not have business but the interest on their bank loans is accumulating for non-payment.

Dhaka Regency Hotel and Resort, a star establishment with 220 guest rooms and suites, has a Tk90 crore bank loan. It has to pay a monthly installment of around Tk1.5 crore. The payment was not tough for the hotel because its monthly revenue was nearly Tk8 crore, but it has now come down to only Tk15 lakh.

"We have no income and we could not pay the installments for the last two months," Shahid Hamid, executive director of the Dhaka Regency, told The Business Standard.

He said they are trying to find alternative opportunities to face the challenges.

"Around 220 health professionals involved with coronavirus treatment are staying in my hotel from May. Of the 250 employees of the hotel, 80 are serving the doctors. The rest are on leave without pay."

He claimed many hotels have laid off their staff partially.

The hoteliers said their business has mainly three sides – room business, banquet hall and restaurant business. The room and banquet business is almost at the zero level in most hotels after the outbreak of novel coronavirus.

Now, Dhaka based posh hotels are seeking alternative opportunities such as a special offer for guests, keeping health professionals and food delivery service, to make up for some losses.

But these initiatives are not enough to allow hoteliers and resort owners to repay their massive loans. Most of the hotels could not continue paying the loan installments for the last three months.

Hotel Inter Continental is run by the state-owned company Bangladesh Services Limited (BSL), and Agrani Bank has a big investment in the company.

According to its financial statement,the company has a loan of around Tk767.79 crore till March 31.

Senior Secretary to the civil aviation and tourism ministry Md Mohibul Haque, who also serves as chairman of BSL, said, "We have reopened the hotel but it has no guests."

"We will seek an interest waiver and an increase in the grace period of loan payment after September," he added.   

Unique Hotel and Resorts Limited has three hotels – Dhaka Westin, The Sheraton Banani and Hansa.

According to its financial statement, as of March 31 this year, the company has a bank loan of Tk311 crore.

Shakawath Hossain, chief executive officer of Unique Hotel and Resorts, expressed his inability to speak on the  subject of loan repayment.

Industry insiders said the boom in chain hotels is part of the country's economic growth in the last decade.

Over the years, many investors have come forward to develop international luxury chain hotels to serve the growing number of foreigners coming here.

According to the hotel and restaurant cell at the civil aviation and tourism ministry, now the country has 17 five star hotels while a minimum of 12 hotels are in the pipeline to open within a few years.

There are also four 4 star and 17 three-star hotels, it added.

Besides, around 200 resorts have been built across the country in the last decade, especially in the surrounding areas of the capital like Gazipur, Narayanganj and Narsingdi, according to the Bangladesh Parjatan Corporation.

Khabir Uddin Ahmed, president of the Tourism Resort Industries Association of Bangladesh (Triab), and owner of Arunima Resort Golf Club in Narail, said, "The resorts do not have guests because of the coronavirus outbreak. Now, we have started agricultural production in our resort such as vegetables and fish farming to face the Covid-9 challenges. My target is to deliver the products in the market and start agri-tourism."

"I have a moderate-sized loan. If I succeed in attracting domestic tourists, the current situation will change,"he added.   

Hoteliers' sufferings in Cox's Bazar

Cox's Bazar, popularly known as the tourism city of the country, has around 450 hotels and resorts. Among them, some 16 hotels are of star category.

The luxury hotels that have started up in the last 12 years include Ocean Paradise, Royal Tulip Sea Pearl Beach Resort and Spa, Seagull, Sayeman Beach, JolTarongo, Long Beach, the Cox Today and Sea Palace.

Abdul Kader Mishu, director of the five star Ocean Paradise Hotel and Resort, said, "We have started our hotel with bank loans and we have to pay installments every month. Though the banks did not create pressure amid the coronaviruspandemic to pay the loan, the tension of compound interest is growing."

"We kept around 100 staff among 300 in the hotel maintaining health safety. We paid the staff in the last two month but we are facing hardship this month," he added.

The situation is almost the same in most hotels of Cox's Bazar. As hoteliers cannot bear the employment cost, they applied to the prime minister last week through the district administration to manage loans at low-interest.  

"We have demanded loans at low interest," said Abul Kashem, general secretary of the Cox's Bazar Hotel Motel Guest House Owners Association.

"All the hotels have to send at least 50 percent of their staff on leave. They are giving full pay to their employees who are attending work, and partially to the rest," he added.  

Mohammad Shams-Ul Islam, managing director of Agrani Bank, said, "The tourism and hospitality sector is in the worst situation among all sectors amid the pandemic. We have investment in the sector, and the money has come from public deposits."

"If hotels do not get guests, then how will they repay the loans? Still, we did not receive any directive from the government about the loans, except the installment grace period till September this year. We will review the whole scenario then," he added. 

Hoteliers demand:

"Now the occupancy rate is around 2-3 percent in most hotels, which is the lowest in history. The combined loss of the hotels would be around Tk4,000 crore till July this year," said Hakim Ali, president of the Bangladesh International Hotel Association. 

He said they applied for interest waivers from March to December this year, and will be starting the current installment from March next year.

Besides, the association demanded utility bill waiver and cash assistance for employees.

"We sent a letter to Prime Minister Sheikh Hasina in May this year with four demands. It will be impossible for the sector to stay afloat without government support," said Hakim Ali.  

Top News

Hotel and Resorts / Dhaka Regency Hotel and Resort / Hotel / resort

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • The Adani Group headquarters in Ahmedabad. Photo: Bloomberg
    Adani Enterprises shelves $122 million bond plan
  • Illustration: TBS
    Cash-strapped banks fail to maintain emergency cash
  • Israeli forces kill unarmed Palestinian man in occupied West Bank
    Israeli forces kill unarmed Palestinian man in occupied West Bank

MOST VIEWED

  • The International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, U.S., September 4, 2018. REUTERS/Yuri Gripas/File Photo
    IMF approves $4.7 billion loan for Bangladesh, calls for ambitious reforms
  • Will reform pledges to IMF work this time?
    Will reform pledges to IMF work this time?
  • Illustration: TBS
    Biz leaders want crisis management, energy security for survival
  • Infographic: TBS
    Bangladesh in better position than Sri Lanka, Pakistan to navigate forex crisis: UCB Asset Management
  • Reconditioned vehicles running out of stock as traders fail to open LCs
    Reconditioned vehicles running out of stock as traders fail to open LCs
  • Despite downturn 3 dozen listed firms plan Tk7,500cr investment
    Despite downturn 3 dozen listed firms plan Tk7,500cr investment

Related News

  • The Peninsula Chittagong incurs loss in Jul-Dec
  • Dhaka Regency Hotel celebrates Christmas and New Year
  • Dhaka Regency holds Bijoy Kid’s Art Competition 2022
  • The Palace Luxury Resort wins South Asian Travel Awards
  • The hotel that never lands

Features

Sketch: TBS

Say 'Salud' before your salad main course

7h | Food
Coots running. Photo: Enam Ul Haque

Cute Coot of Baikka Beel: 'And yet he was as bald as a coot'

2h | Panorama
With only one government run specialised cancer hospital in the capital — the National Institute Of Cancer Research and Hospital (NICRH) in Mohakhali — patients have no option but to resort to private hospitals. Photo: Noor A Alam.

Cancer care: Medical treatment and beyond

8h | Panorama
Andy Mukherjee. Sketch: TBS

What makes India's billionaires' support special for Adani

1d | Panorama

More Videos from TBS

Concord launches new plant to produce environment friendly bricks

Concord launches new plant to produce environment friendly bricks

4h | TBS Stories
How Asif Khan would invest his fresh funds right now

How Asif Khan would invest his fresh funds right now

5h | TBS Markets
A proper price formula can help investors to plan big

A proper price formula can help investors to plan big

1d | TBS Round Table
Rumors about Sarika that everyone thinks are true

Rumors about Sarika that everyone thinks are true

1d | TBS Entertainment

Most Read

1
Leepu realised his love for cars from a young age and for the last 40 years, he has transformed, designed and customised hundreds of cars. Photo: Collected
Panorama

'I am not crazy about cars anymore': Nizamuddin Awlia Leepu

2
Photo: Collected
Energy

8 Ctg power plants out of production

3
The International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, U.S., September 4, 2018. REUTERS/Yuri Gripas/File Photo
Economy

IMF approves $4.7 billion loan for Bangladesh, calls for ambitious reforms

4
Fund cut as Dhaka's fast-track transit projects on slow spending lane
Infrastructure

Fund cut as Dhaka's fast-track transit projects on slow spending lane

5
Photo: Collected
Court

Japanese mother gets guardianship of daughters, free to leave country

6
Belal Ahmed new acting chairman of SIBL
Banking

Belal Ahmed new acting chairman of SIBL

EMAIL US
[email protected]
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Privacy Policy
  • Comment Policy
Copyright © 2023
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - [email protected]

For advertisement- [email protected]