Fund crunch hits hospitality industry

Hoteliers have been trying to reopen their establishments on a limited scale across the country by following health guidelines except for Dhaka as these are mostly dependent on foreign business and corporate travellers.

According to experts, the hospitality industry is in the grip of unprecedented financial crises and uncertainty of quick recovery of losses they have incurred so far.

The situation is better in areas outside Dhaka considering the domestic tourist movement.

From March last, many hotels have suspended operation while many of them are closed after the government had announced general holidays across the country limiting movement to contain the spread of coronavirus.

As of now, some hotel owners cannot open their establishments as they have outstanding rent to building owners and no working capital. So, they can reopen their hotels and run the business even if there is no guest.

Industry insiders said the whole hospitality industry is facing an uncertain future with more people losing job, rise in the number of loan defaulters and closure of more establishments due to a shortage of working capital to rerun the business. As many as 0.31 million are at risk of losing job.

Many tourist spots across the country are slowly reopening by maintaining health guidelines as people have become impatient to go for leisure tour after staying at their homes for the past six months.

Besides, the government also wants gradual advancement of the economy by allowing reopening of the economic activities.

Bangladesh International Hotel Association (BIHA) disaster management committee co-chairman Khaled Ur Rahman Sany told the FE that the re-opening plan of the hotels is ready but there is no fund to do so as the government support is not there.

A hotel which is not doing any business since March cannot re-open without paying staff salary, house rent, utility bills and refurbishment, he added.

Referring to a recent government decision to withdraw the facilities of staying in hotels for the doctors and health workers, he said many hotels were rented for this purpose. As many as 8,000 rooms across the country were rented for the health workers working at the covid hospitals. Otherwise, those establishments would have been closed by this time.

"The government has suspended the hotel facilities putting the health workers' families at risk and without preparing the rooms at government facilities, ensuring quality food and separate toilet facilities for quarantine. It will need only Tk 2.5 billion to Tk 3.0 billion if 10,000 health workers stay in hotels for next six months," he said.

Mr Khaled, also managing director of Golden Tulip The Grand mark Dhaka, a chain hotel of France, said there is an allocation of Tk 150 billion in the budget for covid-19 control.

"I urge the government to allocate a fund for the hospitality industry under the stimulus package and pay the staff forced to stay home Tk 5.0 billion directly from that allocation to save the industry. Otherwise, more people will lose job if the hotel, motel, resorts and restaurants there are not re-opened soon making many entrepreneurs defaulter," he said.

The situation of hotel business is particularly worse in Dhaka as these are dependent on business, corporate, diplomats and development agency travellers. Over 60 per cent guests of hotels, motels, guesthouses and resorts outside Dhaka are local while it is 90-95 per cent foreigners for Dhaka.

Many hoteliers fear that the number of business travellers to Bangladesh will fall by 50 per cent if the pandemic control measure is not proper. The long haul tourists who plan one year beforehand are no longer planning to travel to Bangladesh. In western countries, citizens are being seriously discouraged to visit Bangladesh.

Owner of Grand Oriental Hotel at Gulshan MH Rahman said that there will be no guest in the hotels of Dhaka even after re-opening as the tourists and business travellers are uncertain unless air connectivity is opened again. People hardly visit the restaurants although those have remained open since 10 August.

"We fear the occupancy rate of the hotels will even reach the breakeven point in near future. There is no support under the stimulus package and no moratorium on loan and concession on interest as per our demand. All the hospitality entrepreneurs are trying to reduce staff by 40 percent while some have already left," he said.

Bangladesh Parjatan Corporation (BPC) Public Relations Officer Ziaul Haq Hawlader said that their hotels, motels and resorts reopened all over the country. They have announced a 50 percent discount to attract tourists. But the number of tourists varies place to place. The number of tourists is better in Nikli in Kishoreganj, Rangamati, Cox's Bazar, Dinajpur, Rangpur, Rajshahi. But the number of tourists is less in Sylhet, Benapole, and Mongla.

"There are offers to hold wedding and reception parties and many corporate clients want to come in large groups which we do not allow due to health risk. Tourists can visit tourist spots by following health guidelines and using own vehicles. The district administration can help in this regard," he said.

Mahbub Hossen Sumon, one of the directors of Beach View hotel in Cox's Bazar, said that the deputy commissioner instructed to re-open the hotels, motels at the municipality area of Cox's Bazar from 17 August. The hotel staff started coming in after Eid-ul-Adha. Now the occupancy rate is 30 per cent. The booking is better on Friday and Saturday which has been hampered due to bad weather.

Mr Sumon has expressed the hope that domestic tourist movement would start very soon.

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