Luxury hotels struggle to revive business from pandemic blues
Luxury hotels thrive to revive business by cutting down on costs
Listed luxury hotels are struggling to revive business from the pandemic shock by reducing expenses and introducing new services.
The revenue of Unique Hotel, the owning company of The Westin Dhaka, dropped 57% to Tk67.54 crore and incurred a loss of Tk12.77 crore in fiscal 2020-21.
Despite the loss, it recommended a 10% cash dividend for the general shareholders but its sponsors and directors will not get any dividend.
Although there were strict lockdowns in the first quarter of this fiscal year, the company achieved the growth in revenue but it was not sufficient to make a profit.
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In the July-September quarter, its revenue grew 113% to Tk19.85 crore and still, the company incurred a loss of Tk1.16 crore.
Following the release of the first quarter financial statements, its share price jumped 12% over the last few days and closed at Tk53.90 on Monday at the Dhaka Stock Exchange (DSE).
Sea Pearl Beach Resort, which owns Cox's Bazar-based five-star hotel Royal Tulip, performed well in FY2021 when it reported a 40% growth in revenue to Tk64.39 crore and made a profit of Tk7.36 crore riding on a large flow of tourists to the country's tourism district.
But in the first quarter of the current fiscal year, it incurred a loss of Tk1.05 crore although it achieved a 16% growth in revenue to Tk16.32 crore.
An officer at Sea Pearl said it raised Tk370 crore through a bond and has to pay Tk9.82 crore quarterly as an instalment. But the company failed to earn such an amount from its operation and as a result, it incurred losses due to the instalment payments.
However, in the last few days, its share price rose 8% and closed at Tk42 on Monday at the DSE.
Besides, The Peninsula Chittagong posted six times growth in profit to Tk4.87 crore although its revenue fell 10% to Tk25.42 crore in the last fiscal year.
The company kept the profit growth momentum in the first quarter of this fiscal year. An officer of the company said, during the period its core business had been interrupted by the Covid-19 pandemic.
However, the management has taken some improvised steps to reduce avoidable costs. Moreover, the current tax rate was also reduced to 22.50% from 25%, which helped the company post such growth.
To diversify the business, Sea Pearl has recently started a passenger cruise ship tour package programme on the Khulna-Sundarban-Khulna route. To operate the new business, the company has purchased two cruise ships for Tk8.50 crore.
Peninsula Hotel is going to launch a five-star hotel near the port city airport for expanding its business. It also increased the investment in the capital market. As the market has boomed in that period, the company received a good return from its stock investments.
Besides, Unique Hotel is setting up a power plant in Narayanganj as part of business diversification.
A senior officer at the company, seeking anonymity, said some of its projects on the hotel business are stuck owing to the pandemic. The company is supposed to start the projects next year.
He also said the tourism sector will suffer from the new Omicron variant of the coronavirus. Now the company is observing the situation and trying to introduce new services by following health safety measures.
