Recovery of hospitality, tourism in BD seems far away: Stakeholders

- A Monitor Desk Report 21 Jul, 2020 | 413 Views|-+
Dhaka: The recovery of hospitality and tourism in Bangladesh, the sector hardest hit by the coronavirus pandemic, appears to be far away, said industry representatives at a webinar organised by The Business Standard on July 19.

Referring to the analysis of PATA BD Chapter, the stakeholders said that the entire industry had a revenue loss of BDT 9,705 crore till June. And by the end of this year, they estimate the number is likely to go over BDT 20,000 crore, of which about BDT 2,000 crore will be the net income loss.

The webinar was attended by key industry elites including Shahid Hamid, Executive Director, Dhaka Regency Hotel and Resort; Md Al Amin, General Manager, Six Seasons Hotel; Kazi Wahidul Alam, Editor, The Bangladesh Monitor; and Taufiq Rahman, General Secretary, Pacific Asia Travel Association (PATA) Bangladesh Chapter.

Sharier Khan, Executive Editor of The Business Standard delivered the opening speech while Sajjadur Rahman, Deputy Editor, moderated the session.

Hotel occupancy

Md Al-Amin, General Manager of Six Seasons Hotel said that currently all the hotels are generating zero revenue or the bare minimum amid this coronavirus crisis.

In this season, Six Seasons usually has 70-75 per cent occupancy, mentioned Al-Amin, adding that "this year, it has dropped down to 5-10 per cent only".

"Forecasts say there will be 37-40 per cent drop in hotel's revenue per room till 2021," he said. Meaning even if a vaccine comes out tomorrow, the impact of this pandemic will remain for at least a year for all hotels in the country.

Outbound travel

About passenger traffic, Kazi Wahidul Alam, Editor of The Bangladesh Monitor mentioned IATA estimates that 49 per cent passenger traffic will drop this year compared to last year. "But, I believe it will drop further to 60-70 per cent."

40 per cent of our outbound traffic is employment which has stopped completely. Rather, they are being repatriated back home. Pilgrimage traffic, for Hajj and Umrah, which accounts to 10-15 per cent, has also stopped.

And to further add to the woes, many countries across the world, such as Italy, Schengen, Japan and Korea, are not accepting flights from Bangladesh for being one of the high-risk countries right now, said Taufiq Rahman, General Secretary of PATA BD Chapter.

On top of it, the recent incidents of issuing fake COVID-negative certificates has further ruined our image globally. And this affects both inbound and outbound travel, stressed Alam, adding that "we won't recover from this impact any time soon".

Therefore, the only flights being operated currently are mainly for repatriation of stranded passengers, he mentioned.

Inbound travel

Taufiq Rahman, who is also the CEO of a tour operating company Journey Plus, said some of his English clients are cancelling scheduled tours till 2021. Therefore, he estimates that inbound tourism will not resume before 2022.

Also, to generate inbound tourism, "We have to brand our country to the entire world," claimed Al-Amin.

Dhaka mostly receives business travellers. But amid the virus pandemic, they will only take the risk to come to the country if they are projected the output of it first, he added.

And for inbound leisure travel, the branding should be focused on building faith among travellers ensuring their proper security, claimed Wahidul Alam.

Domestic travel

Domestic tourism, on the other hand, will also take long to recover. Since per person income has decreased now, leisure travel comes after the basic needs. As a result, we will see a destination like Cox's Bazar, which relies on domestic tourism mainly, to be vacant this Eid. Whereas, earlier, it used to be fully booked for seven days during Eid, Al-Amin explained.

Also the flattening of the virus curb is also necessary for domestic tourism to get back on track, added Taufiq Rahman.

Govt stimulus package

The government on April 5 rolled out a BDT 30 thousand crore stimulus package for big industries and BDT 20 thousand crore for small and medium enterprises affected by the COVID-19 pandemic.

On its promise, Md Al Amin, said, "The package is for the entire service industry. Since we, hotels, are part of the industry, we have applied."

But the terms and conditions to get the loan are not that simple, he mentioned. A hotel will get one third of the paid-up capital of the time it was opened. Now, over the years, the value of a hotel increases. So the amount one eventually gets will only cover a day's cost, making it hardly beneficial to anyone, the general manager of the hotel added.

Wahidul Alam also stressed that the stimulus package might help a little during the crisis but it is not enough to ensure survival. "If you cannot generate revenue, how are you going to repay the loan at 5 per cent interest?"

Layoff and pay cut

PATA Bangladesh Chapter previously did an estimate that over three lac employees would be jobless by the end of June, said Taufiq.

Asked about it, Al-Amin said Six Seasons Hotel till now has not laid off any staff. But they, like other hotels, did take other cost minimisation measures which includes pay cuts and paid leaves.

Usually, international standard hotels require 1.5-1.8 manpower per room on average. However, since the occupancy rate is very little right now, hotels are not needing all of their staff in operation, marked Al-Amin.

Furthermore, since the hotels are not getting much support from the government, they are having to go through cost minimisation in employee payrolls, starting from the doorman to general managers, he also expressed.

Way ahead

In travel, Taufiq Rahman shared that he sees potential in regional cross-border tourism in the future with neighbouring countries or states like India, Kolkata, Siliguri, Meghalaya, Seven Sisters and others. A convenient visa regime has to be ensured in this regard.

But, in case of hospitality, there might be changes in customer preference in the post COVID-19 era, Al-Amin and Wahidul Alam both expressed.

Zoom meetings could affect the MICE business in the future. Therefore, digital transformation is going to be the way forward.

But, the customers preferences will be constantly changing every day. Hence the hotels have to be in pace adapting to every new one of them, taking hospitality to the customers at individual level.

"Employees, in the mean time, should focus on skill development. Because in the post pandemic era, it will be all about survival of the fittest," said Al-Amin.

Survival

To ensure survival, Kazi Wahidul Alam, stressed, "The government should form a crisis management team immediately with the stakeholders."

Finally, Shahid Hamid, Executive Director of Dhaka Regency Hotel and Resort and Chairman of the PATA Bangladesh Chapter called for restructuring under situational leadership as the hospitality industry struggles to survive in this period of crisis.

He mentioned that a five-star hotel on an average pays BDT 25-35 crore every year to the government as vat, corporate tax, supplementary duty and utility bills.

If the government does not subsidise the cost of utility bills or waive the charges for vat, tax and supplementary duty, for a only certain time, then it will be very difficult for the hospitality industry to survive through the crisis in such a vulnerable state, Hamid concluded.

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