Three five-star hotels: Business shifts from south to north

The star hotels located in Dhaka north city corporation are doing better business than the hotels in Dhaka south city corporation area.

Three star hotels in Dhaka which are enlisted with the stock exchange had a turnover of 6.41 billion in the 2022-23 fiscal. The turnover of The Westin Dhaka and Le Méridien Dhaka in Dhaka North city corporation area was Tk 4.72 billion while Intercontinental in Dhaka South had a turnover of Tk 1.69 billion.

Again, the income of the hotels was more from the sale of food than from the room rent. In the last financial year, these three hotels earned Tk 2.91 billion from room rent. In contrast, their income from food sales was Tk 3.04 billion.

This information was obtained by reviewing the financial reports of the hotels last year.

Two more hotels—Sea Pearl Beach Resort in Cox’s Bazar and The Peninsula in Chattogram—are also enlisted with the bourses.  Two of these five hotels are enlisted in the stock market under their own names while three others are in the market with the names of owner companies. Intercontinental Hotel is enlisted in the market under the government-owned company Bangladesh Services, Le Meridien is enlisted by its owner company Best Holdings and the Westin is enlisted by its owner Unique Hotel and Resorts. Peninsula and Sea Pearl Beach Resort are listed under their own brand names. These five star hotels are enlisted in the stock market as tourism sector companies. After Best Holdings came to the market on 6 February, the number of tourism sector companies in the stock market stood at five.

Hotel Intercontinental in Dhaka’s Shahbag started operation in 1973. It is the oldest five star hotel in the country. Intercontinental hotel was once synonymous with five-star hotel in the capital to the people. Then came Pan Pacific Sonargaon in the 1980s. After 2000, five-star quality hotels started to be built around Gulshan and airport areas by private initiative one by one.

In 2022-23, Intercontinental had earned a revenue of Tk 1.69 billion. The Westin hotel, which was established in 2000, in Gulshan-2 earned Tk 2.03 billion. Le Meridien hotel in the Nikunja area near the airport turned over Tk 2.69 billion in the fiscal.

Of these three hotels, Le Meridien had most earnings from renting out rooms. It earned Tk 1.5 billion from room rent while Westin earned Tk 980 million and Intercontinental Tk 430 million.

Despite lagging back in room rent, Intercontinental hotel did better business than other two in dining. The oldest five-star hotel earned Tk 1.12 billion from sales of food and beverages in the year. Le Méridien Dhaka earned Tk 1 billion from sales of food while Westin earned Tk 980 million.
According to the information provided in the financial reports, the star-hotels have some other source of revenue alongside room rent and food sales. These sources include hall rent, health club, spa, parlor, saloon and transport. Intercontinental clocked the highest revenue earning Tk 140 million from these sources while Westin earned Tk 130 million and Le Meridien made a revenue of Tk 90 million.

Westin hotel’s Chief Executive Officer (CEO) Shakhawat Hossain told Prothom Alo that the hotel's location is a big factor in this business. Gulshan and Banani are known as upscale areas of the capital where diplomats, businesspersons and wealthy people reside. This is why hotels in Gulshan are likely to earn more revenue than the hotels in Shahbagh or Karwan Bazar.

Hoteliers think that the hotels earn more revenue from food because the earnings of a section of people have increased and the food habits of people have undergone a big change. To these people, dining out once or twice a month in five-star hotels has become a habit. The star hotels offer a wide array of local and foreign foods which attract many people.

Dhaka University’s tourism and hospitality management department’s chairman Santosh Kumar Deb told Prothom Alo, “Along with improvement in people’s living standard, the influence of western culture has also increased in the lifestyle of middle class, upper middle class and upper class. In developed countries, it is a tradition to dine in hotels and restaurants with family and friends on weekends. This trend can now be seen in a certain class of people in our country as well. This has impacted the business of star hotels in our country. Also, the hotels took various initiatives to increase food business during the pandemic. That too has boosted the food business of hotels.”