Market Research Thesis Report On The Tourism & Hospitality Industry In Bangladesh Glossary of Terms Abbreviation Description BDT Taka ARR Average Room Rate CAGR Compound Annual Growth Rate DAC Dhaka F&B Food & Beverage M 2 Square Meters MICE Meeting, Incentive, Conference and Exhibitions OCC Occupancy Levels RevPAR Revenue per available Room BD Bangladesh USD United States Dollars NLRA Non-Last Room Availability Abdullah Al Mamun – ID 08515030 Page 1
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Market Research Thesis Report On The Tourism & Hospitality Industry In Bangladesh
Glossary of Terms
Abbreviation Description
BDT Taka
ARR Average Room Rate
CAGR Compound Annual Growth Rate
DAC Dhaka
F&B Food & Beverage
M2 Square MetersMICE Meeting, Incentive, Conference and
ExhibitionsOCC Occupancy Levels
RevPAR Revenue per available Room
BD Bangladesh
USD United States Dollars
NLRA Non-Last Room Availability
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Market Research Thesis Report On The Tourism & Hospitality Industry In Bangladesh
Chapter 1
Introduction
1.0 Introduction
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Market Research Thesis Report On The Tourism & Hospitality Industry In Bangladesh
During the post-Second World War era, tourism demand has rapidly increased
and tourism has become a worldwide phenomenon. Not surprisingly, this post-
war boom has drawn the attention of many developing countries, and tourism as
one of the growing industries of the world economy has enticed many
entrepreneurs and governments of various countries to invest in the tourism
industry without proper planning and preparation (Cevat Tosun and Dallen J.
Timothy, 2001).
Tourism is not associated with aristocracy. Today even ordinary persons can
afford. With the passage of time, the tourism has become almost a part of our
normal life. In the background of its growing popularity, tourism has become a
mass phenomenon. It has grown to such dimensions that we consider it an
important industry.
The promotion of tourism as an industry serves multi-pronged interest, e.g.
protecting our arts and culture, preserving our cultural heritage, interaction of
different religion, exchange of views, and generation of foreign exchange and so
on. It is against this background that albeit global tourism organizations like
World Tourism Organization Pacific Area Travel Association. International Union
of Official Travel Organization etc. have been active in developing tourism as an
industry. Particularly for the developing countries, the tourism industry is
considered as a bonanza. The conceptual exposition appears essential to study
other dimensions of tourism marketing.
This Market Research report has been compiled using a variety of information
using traditional research methodology and reports by the Bangladesh tourism
board and interviews with a variety of professionals, whom will remain nameless,
from a variety of Hotels within the region.
The main function of this report is to provide investment information for any
developer in the Bangladesh whom wishes to invest in the Hospitality industry
and especially the lucrative five star hotel markets in Dhaka.
Although there is a general lack of transparency within the industry due to its
increasingly competitive nature all information present is as accurate as I can
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possibly achieve and all supplementary methods have been utilized to check the
accuracy of the figures.
1.1 Origin of the report
In order to fulfil the partial requirement of the MBA program, my respected
supervisor Mr. Nazmul Hasan, Lecturer, School of Business, University of
Information Technology & Sciences assigned me to study market research on the
Hospitality Industry in Bangladesh.
1.2 Objectives of the report
The objectives behind this report are:
To understand the practical implications and use of the skills and
techniques learnt in theories of Economics.
To analyze and interpret the demand and supply of a particular
product/organization in a practical life scenario.
To find out the different factors that affect demand and supply, know
about the market conditions and gain an overall view about the hotel
industry in Dhaka.
1.3 Scopes
The report deals with the hotels in Dhaka city only, not in other parts of
Bangladesh. The scope of the report is also restricted to the accommodation
providers whose service is at least of a three star category. It is very hard to
decide in Dhaka which hotels are actually of three star and above category in
true sense because there are no particular standards. So hotels and guest
houses that claim themselves, and are perceived by the people, to be of that
level have been dealt with in this report.
1.4 Methodology
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Both primary and secondary methods of data collection have been used in
collecting the necessary information about The Westin Dhaka and the other
hotels in the industry.
Different journals, newspapers, reports and websites acted as the secondary
sources of data. The primary method included direct interviews with the Sales
and Marketing and Revenue managers of the relevant hotels like Westin,
Radisson, Sheraton and Pan Pacific Sonargaon.
1.5 Limitations
In preparing this report certain limitations were faced:
The report is completely based on the information revealed by the
representatives of the different hotels. This information was simply
assumed to be correct. There might be some scopes for manipulation and
therefore the validity and reliability of the information can not be
guaranteed.
No accurate data for future projections of demand and supply was
available. The methods used in making the projections might have been
too simple and may not be a true representation of the actual situation. It
just gives a rough idea.
Due to inexperience in the field there might have been some problems in
the interpretations and analysis done.
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Market Research Thesis Report On The Tourism & Hospitality Industry In Bangladesh
Chapter 2
The Hospitality Industry
2.0 The Hospitality Industry in Bangladesh
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Hotel Industry is one of the most important and promising industries in
Bangladesh, having a high growth rate, higher than those for many other
industries. The growth rate just keeps increasing every year. An industry which
started off with only one five star hotel, the then Intercontinental Hotel, now has
four five star hotels- The Westin Dhaka, Radisson Water Garden Hotel, Pan
Pacific Sonargaon Hotel and Dhaka Sheraton Hotel, a substantial number of
other hotels of and above the three star standard, and numerous guest houses of
good quality, to cater to the accommodation needs of the increasing number of
people visiting Bangladesh for travel and business purposes.
Though much growth has not taken place in the five star categories (there are
still only four of them), there has been a huge growth in the small hotel and
guesthouse sector, especially in the last 8/9 years, starting from 2000/2001. The
growth certainly came late but it has started at least. In future this growth is
expected to increase only further, and it is not only going to be in the small hotel
and guest house sector, but also in the luxury hotel category. Few more new five
star hotels – Hilton, Intercontinental Hotel, and Holiday Inn, are scheduled to
open up in the near future. One of the main reasons behind this growth of the
hotel industry is the growth of the travel industry in Bangladesh.
One industry with which the hotel industry is closely intertwined is the travel
industry. The main target markets for the hotels are certainly the foreign visitors
to a country. The more is the number of people visiting a country, the more will
be the demand of hotels for those people to stay in. The international travel
scenario has proven very favourable for the hotel industry for the last few years.
Now is an era of globalization. The whole world is today being considered a
global village. With the advance in technology new systems have developed. On
line corporate travel booking, e-ticketing, e-business, global distribution system,
online hotel booking, etc., are just some of the examples. All these have made
international travelling both necessary and easy. With each passing day
interdependence and interaction between the countries of the world are
increasing. The scene is especially rosy in the Asia Pacific region with its
emerging business markets. Besides, the liberalization of the air services access,
especially by the Asian governments has also created new opportunities for the
expansion of the travel industry.
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It is true that in the last few years the travel industry did have to face a hard
time due to the 9/11 attacks, terrorism, Iraq war, SARS, Global recession and
SWINE flu . Consequently hotel occupancy dropped to its lowest level in the past
30 years. Some hotels in America, Hong Kong, Mexico and some other countries
even had to wind up due to lack of customers. But after those poor years the
international travel condition has already started improving. Along with that,
from all quarters of the hotel industry, signs of a recovery are emerging after one
of the most severe slumps in recent history.
In 2009 the international passenger traffic grew 15.3% over last year. The Asia-
Pacific region had the maximum contribution to this growth with a 20.5% visitor
increase. But much of this growth was actually a recovery from the fall in the last
couple of years. Between 2010 and 2012 the forecasted annual average
international passenger growth will be about 6%. Quite obviously all these mean
good news for the worldwide hotel industry.
Certainly this growth has presented, and will continue to present a lot of
opportunities and scopes for the travel and hospitality industry in Bangladesh
just like it does for any other country. Though very insignificant compared to the
performance of other Asian countries like India or China, the travel and hotel
industry in Bangladesh has been growing as well. In tune with the rest of the
world, Bangladesh has also attained substantial growth in International arrivals
for the last few years. At present about 20 airlines are operating flights to Dhaka.
Often the aircrafts come full, but do not leave full. A complete table showing the
total visitors to Dhaka since 1990, along with the projections for the next few
years, is given later under the industry demand section. As for now, let us see
what in particular brought about this growth over the years.
The visitors to Bangladesh can be classified under two broad types: Business
travellers and tourists.
Of these two, the business travel sector has seen some substantial improvement
and development in the last few years. Visitors to Bangladesh comprise mainly of
businessmen and other foreign officials.
After opening up of the economy and conduction of a fair election in 1990,
Bangladesh has been experiencing a steady growth in the foreign direct
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investment (FDI). Due to the various restrictions on the country’s foreign
currency transactions, Bangladesh economy is comparatively less exposed to
foreign currency risk. The economy has survived strongly against the global
recession and currency turmoil in the recent past. Bangladesh has been enjoying
the focus of world business community as an alternative and safer investment
window in Asia.
At present, the Government of Bangladesh, with assistance of different
international donor agencies, is making huge investment in the infrastructure
development projects like construction of bridges, culverts, roads and highways
etc. Apart from this, lots of foreign investments are being channelled in oil and
as exploration, power development, etc. Setting up of the EPZs one after another
certainly means more and more direct foreign investments
Besides, some other factors like shift of policy towards more liberation of trade
and commerce, reform measures for structural change and involving private
sectors in various forms have improved the business travel scenario. In a whole
the economy is growing quite fast. The G.D.P of the country has increased from
about 6.4% in 2006 to about 6.6% in 2007. In 2008 the G.D.P of the country has
decreased from 6.6% in 2007 to about 6.3% in 2008, mainly because of the
political situation as there were caretaker government was in power.
All these have resulted in one thing for sure - frequent travelling of foreigners,
helping to boost the hotel industry in Bangladesh.
In the tourism sector there has been growth as well. According to Bangladesh
Parjatan Corporation (BPC), the country received an income of Tk. 2759 million
from tourism in 2004 which is Tk. 528.4 million greater than the previous year,
representing a growth of 23.68%.
But this growth is still insignificant, and more so, when we consider the fact that
Bangladesh has the potential of achieving much more. The government has
always lacked the proper planning and policies that could have helped this
industry develop to its fullest potential. Lack of proper presentation and
maintenance of tourist spots, lack of safety and security, political turmoil,
inefficiency of The Bangladesh Parjatan Corporation, and above all, the negative
image of Bangladesh in the eyes of the rest of the world – these are just some of
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the many reasons which are hampering the proper development of tourism in
Bangladesh.
But recently the government seems to have started thinking about this issue.
Especially after the removal of the quota system the government is keen to
develop the tourism and hospitality industry as an alternative to the garments
industry, as said by Dr. Mahbub, one of the CEOs of BPC. Government is giving
more importance than ever before to this industry and has accepted it as a
thrust sector. Government is currently thinking of a number of steps to
encourage more and more tourists to visit the country.
Government is taking various steps to support BPC at policy making levels. More
training, research and development is on the way to promote BPC as a tourist
facilitator. Bangladesh Parjatan owned institute NHTTI (National hotel and
tourism training institute) is improving day by day with affiliations with similar
foreign institutes. The number of students are also increasing showing that more
and more people are getting interested and specialized in this area.
"The government in principle agreed to formulate a time-befitting Tourism Board
Act and we want to enact such an act with the opinions of all stakeholders which
will be acceptable to all and help promote the tourism sector," Civil Aviation and
Tourism Minister GM Qader told a view-exchange meeting at a city hotel on May
27, 2009
Most importantly, the government is now realizing that proper development of
the tourism and hospitality sector is not possible without the involvement of the
private sector. Development of beaches in Coxs- Bazar and Chittagong has
already been given to the private sectors. BPC is also planning to lease out 150
acres of its land to the private sector for the development of various types of
tourism facilities like amusement parks, golf course, swimming pools, etc., and
most importantly international standard accommodation facilities. The
government is also thinking of forming a NTB (National Tourism Board) which will
contain representatives from both government and private sectors.
Besides, the government is also thinking of easing the visa system and of
introducing the system of visa on arrival for visitors. It is also considering
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reducing the tax burden on the hotels, especially the four premier properties-
The Westin Dhaka, Radisson Water Garden Hotel, Pan Pacific Sonargaon Hotel
and Dhaka Sheraton so that they can offer more reasonable and competitive
prices.
If the government is actually able to carry out these plans then the future of the
hotel industry in Bangladesh will certainly be much brighter.
In conclusion, the present and future situation of the hotel industry in
Bangladesh can be best summarized by a quotation of Ian R. Barrow, former
General Manager of Radisson Water Garden Hotel. Explaining the reason for
Radisson’s coming to Bangladesh, barrow said, “South Asia will be the area of
growth within the next 15-20 years. There is a lot of potential in this region.
Bangladesh’s economy is also growing very fast; a lot of key developments are
taking place. It’s a key market to be in. Bangladesh has a lot of potential in
tourism and hotel industry. There is an incredible amount of history here.”
2.1 Overcapacity and Resourcing
The sheer scale of the newly announced developments coupled with those
already underway raises the issue of whether the region is facing the risk of
overcapacity.
With occupancy levels running at over 70% and record revenues of US $145 per
night in the first quarter of 2009 in Dhaka it is easy to see the motivation to
construct further properties in the region.
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However, a number of external factors could serve to depress demand such as a
possible recession in the US and Europe (currently happening), concerns over
climate change bringing travel restrictions in Europe, security worries and
pressure on business costs driving down travel budgets.
Whilst ‘Plan A’ is focused on an assumption of continued growth, the operators
need to think clearly about ‘Plan B’ – e.g. what happens if they cannot attract the
premium price customers at whom they are targeting the majority of
developments? Would they be forced to lower prices and target a broader
audience? If so, would they be able to retain the image of luxury and exclusivity
so critical in attracting premium rate customers?
Another key challenge is whether the region will be able to attract and develop a
sufficiently skilled pool of human resources to service these developments. With
Middle East economies on the rise, where will the human resource come from?
Failure to attract sufficiently qualified staff could lead to service failures which
would have a detrimental impact on the brand image of those properties.
2.2 Rising Ecological and Environmental Concerns and the Growing Regional Response
Developers, operators and Local Authorities across the country are beginning to
respond to the perception that travellers are becoming more concerned about
the impact their vacations and visits are having on the environments they travel
to.
Recent environmental issues raised in the region about waste, power, water and
sustainability could have a potentially dramatic impact on the success of existing
and recently announced hotel projects in the country hence the introduction of
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LEED (Leadership in Energy and Environmental Design) accreditation in
Dhaka.
As travellers become more alert to these issues, they will seek ‘standards’ to rely
on as guides to the most sustainable hotels to stay in – such as the Green Globe
model – a ‘global benchmarking, certification and improvement system for
sustainable travel and tourism’ - endorsed by 182 Heads of State at the United
Nations Rio de Janeiro Earth Summit in 1992.
An April 2007 Trip Advisor survey of over 1,000 travellers worldwide found 40%
consider environmentally-friendly tourism when making travel plans. 66% say
environment friendly measures in travel are making a difference.
Nearly 25% believe that air travel should be avoided, whenever possible, to help
preserve the environment, while 38% said would pay more to take an eco-
friendly flight and 26% would pay a 5-10% premium.
To stay at an environmentally-friendly hotel 34% said they would pay more
money, while 38% said they had already stayed at an environmentally-friendly
property, and 9% would specifically seek out environmentally-friendly
establishments.
When asked to specify how much they extra they would be prepared to pay for
'green' accommodation, 25% said they would pay a 5-10% premium, and 12%
would pay a 10-20% premium.
Ian Rumgay, European communications manager for Tripadvisor says "This
survey shows that far from being irresponsible, planet polluting energy wastrels
that they are often portrayed, many travellers do care about the environment
and are willing to pay for it,". "It is a wake-up call for all sectors of the travel
industry to provide more green options".
Increasingly broad assessments will be made of the ‘whole life environmental
footprint’ of the sector – for example considering every aspect of a hotel’s
construction, resource usage, waste and emissions. A number of encouraging
developments are now underway suggesting the region is paying more attention
to environmental concerns,
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2.3 Industry Supply Scenario
Before the liberation of Bangladesh, there was only one five star hotel in East
Pakistan- Hotel Intercontinental, which had opened in 1966. After liberation, in
1972, by Presidential Order of 1972, the Bangladesh Govt. took over its
ownership. Today, the Ministry Of Civil Aviation and Tourism of the government
of Bangladesh maintains authority over the Dhaka Sheraton Hotel through
Bangladesh Services Limited and Starwood Hotels and Resorts handles the
management.
Sheraton’s prime competitor Pan Pacific Sonargaon Hotel (PPSH) entered the
industry in 1982 with operations in full swing and with Japanese management
company Tokyo Hotel International running the management of the hotel on
profit sharing basis. Tokyo Hotels International will continue in managing the
hotel until 2005.
Then in 2006 the newest five star hotel Radisson Water Garden Hotel entered
the industry, located on the airport road, adjacent to the diplomatic enclave and
upcoming blue chip commercial hub of Gulshan, Baridhara & Banani and just
5km from the main international airport. The owning company is Shena Hotel
Development Ltd., and managed by Carlson Hotels and Resorts.
And finally in 2007 the newest true five star hotel The Westin Dhaka entered the
industry. The Westin Dhaka is a lifestyle brand competing in the upper upscale
sector in nearly 30 countries around the globe. Each hotel offers renewing
experiences that inspire guests to be at their best. First impressions at any
Westin are fueled by signature sensory experiences of light, music, white tea
scent and botanicals. Westin revolutionized the industry with its famous
Heavenly Bed ® and Heavenly Bath ® and launched a multi-million dollar retail
program featuring these products. Westin is the first global brand to offer in-
room spa treatments at every hotel and the first to go smoke-free in North
America. Westin guests stay in shape at Westin WORKOUT ® Powered by
Reebok™.
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With the lapse of time, other hotels entered the industry. But none of them were
of the five star category. These include Hotel Purbani, Hotel Sunderban, Hotel
Razmoni Ishakha, Best Western La Vinci, and more recently, Hotel Sarina, Lake
Shore, Royal Park, Grand Azad Hotel, Hotel Orchard Plaza, Hotel Lake Castle, and
a couple more, all with more or less three star facilities.
Besides, in the last 7/8 years numerous guest houses have also sprang up,
especially in the Gulshan and Banani area. Though many of them claim
themselves to be a hotel, they better be called guest houses as they do not
follow many of the regulations and requirements of a hotel. But anyways, many
of them do provide good facilities and services just like a 3 or 4 star hotel,
cheaper accommodation, and a convenient location. In this way they are luring
away a good number of the total visitors to Dhaka. Therefore, they should also
come in the list of good quality accommodation providers.
Basically the accommodation facilities in Dhaka can be classified into three
broad categories:
Luxury Hotels ( five or four stars)
Small hotels known as limited facility or boutique hotels
Guest Houses
As it has been mentioned before, there has been huge growth in the
accommodation sector in the last few years. Not only new hotels are opening up
but existing ones like Sheraton and Sunderban have expanded their capacities.
According to hotel experts the natural growth rate of the hotel industry is about
at least 10% per year. If the guest houses are considered then the growth rate
will be about 20-25%. Every street in Gulshan and Banani now has more than
one of it.
The chart shows the rough increase in the number of rooms that has taken place
in each five year interval, starting from 1995 (Considering the major hotels and
Guest Houses). The ‘others’ category in the chart represents other small hotels
and guest houses, and it can be considered that on an average each of them has
about 40/50 rooms.
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Total Rooms available in the Hotel in Dhaka
Name of the Hotel 1995 2000 2005 2006 2007Pan Pacific Sonargaon Hotel 304 304 304 304 304Dhaka Sheraton Hotel 233 233 288 288 288Hotel Purbani 180 180 180 180 180Hotel Sunderban 64 120 160 160 160Best Western La Vinci - 51 51 51 51Grand Azad Hotel 107 107 107 107Hotel Sarina - - 90 90 90Hotel Lake Shore 60 60 60Royal Park 60 60 60Radisson Water garden Hotel
204 204
Dhaka Regency 200The Westin Dhaka 235Others(Other small hotels and guest houses, having about 45 rooms each, on an average)
(10×45)= 450
(25×40)=1000
(50×40)=2000
(60×40)=2400
2400
Total rooms available 1231 1995 3300 3904 4339
Table: 2.1
The graph below shows the increasing trend in the number of rooms available in
the industry over each interval of five years.
Trend in the number of rooms available
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
Years
Total number of roomsavailable
Years 1995 2000 2005 2006 2007
Total number ofrooms available
1231 1995 3300 3904 4339
1 2 3 4 5
Fig. 2.2
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It can be easily seen from the graph that the increase in the time period 2000-
2007 is much higher than that in the period 1995-2000, indicating that the
industry supply is increasing at an increasing rate.
In particular, Grand Azad Hotel opened in 1999, Royal Park and Hotel Sarina in
2002, Hotel Lake Shore in 2003 and Dhaka Regency in 2007. Obviously, these
are just some of the major ones. There has been constant opening of other small
hotels and guest houses, but their exact opening years are hard to specify, and
there are just too many of them.
A rough estimation of the number of room nights available for the last five years
One thing to note at this point is that much of the growth that has been
discussed so far is the contribution of small hotels and guest houses. Though
many of them claim themselves to be three or four stars, it is very hard to
specify which ones actually are of that category. Anyways the services are good
enough to satisfy customers, whether they are three stars or not. Even if hotels
like Regency, Sarina, Lake Shore, Grand Azad, Royal Park etc. are considered to
be three/four stars, the star quality hotel rooms in Dhaka are in short supply. The
entire Dhaka is offering only about 1200 rooms of international standard.
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Specifically in the five star sector there has been no growth at all and Westin,
Radisson, Pan Pacific Sonargaon and Sheraton still remain the only four hotels in
this category.
In the past years, there were talks about building hotels in private sector. Among
these were, Holiday Inn, Central Sheltech Hotel, Airport Hotel, Westin Dhaka,
Hyatt Regency Hotel, Hilton Hotel, and Oberoi Hotel etc. Unfortunately, except
Radisson Water Garden Hotel and The Westin Dhaka, all others abandoned the
idea and backed out.
But the industry supply is expected to improve vastly in both quality and
quantity as two new hotels are scheduled to open within the next four to five
years.
Holiday Inn and Intercontinental Dhaka are two other international standard
hotels which are currently under construction. Holiday Inn is supposed to have
300 guest rooms while the Intercontinental is supposed to add a huge 396 to the
lot. Though it can’t be said with certainty when these hotels will exactly start
operating, perhaps it is not going to be before 2012/2013 according to industry
experts.
Once these two hotels start operating they will take the accommodation
standards in Dhaka to new heights and add about 700 rooms in total to the
industry supply.
As far as guest houses and small hotels are concerned, the growth rate is slower
at present (5/6%) than it has been over the past few years and it is expected to
be so in the immediate future. There are basically two reasons for that. Firstly,
there are already too many of them and are all competing among themselves for
business. Not all are of equal standard and ultimately only the fittest will survive.
Secondly, the potential owners of guest houses are watching out for the
forthcoming hotels and how they will affect the guest house and boutique hotel
industry.
So considering the growth of guest houses about 3 per year (5/6%), each with a
capacity of about 40 rooms, and the entry of the two new hotels mentioned
above, the supply of room nights can be found. It is shown in the following chart.
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Number of rooms and room nights from 2005-2009
Year Number of rooms Number of room nights2005 3300 12045002006 3904 14249602007 4339 15837352008 4450 16242502009 4600 1679000
Table: 2.4
2.4 Industry Demand Scenario
In the industry overview section it has been mentioned that the number of
foreign travellers arriving in Bangladesh has been increasing substantially over
the last few years and is expected to do so even at a higher rate in the future.
The foreign travellers act as the main target market for the hotel industry and an
increase there means a growth in the demand for the hotel industry. Dhaka
being the capital of the city and the centre of all facilities and business activities
certainly is the destination of most of the visitors coming to Bangladesh.
Obviously Dhaka also has a plenty of visitors from other cities within the country,
coming for both business and plain visiting purposes. But the number of them
staying in hotels is quite insignificant compared to the foreign visitors. In most
cases they will have other stay options like a relative’s or friend’s house,
company owned guest houses, etc. Even those with no other options will rarely
consider staying in a five star or luxury category hotel. Statistics show that most
of them will prefer staying in an economic hotel or guest house. So, in calculating
the demand for the accommodation facilities in Dhaka, this report treats the
foreign travellers as the only market.
The business and tourist arrival growth over the past five years has been about
10% per year on an average. In the year 2003 the increase was about 17%. It is
expected that the growth will continue to increase at a rate of about 15% in this
decade according to Bangladesh Parjatan Corporation’s sources. The following
table shows the number of foreign visitors arriving in Dhaka since 2003:
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Number of foreign visitors
Year Number of Foreign visitors2003 1207822004 1280642005 1163892006 1132422007 1104752008 126785
Table: 2.5
The increasing trend in the number of foreign arrivals can be clearly seen in the
following graph.
Trend in the number of foreign visitors arrivals
0
20000
40000
60000
80000
100000
120000
140000
Number of Foreignvisitors
Year
Number ofForeign visitors
120782128064116389 113242110475126785
Year 2003 2004 2005 2006 2007 2008
1 2 3 4 5 6
Fig. – 2.6
With this increasing number of tourists the demand for rooms for these people to
stay in has certainly increased as well. It is true that not all of these people will
stay over at night and may leave the same day. Also some of them may have
other accommodation arrangements like company owned guest houses or the
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houses of some friends, acquaintances etc. But the majority of them will
certainly stay in hotels or some good quality guest houses.
It can be noticed from the graph and chart that the number of arrivals in Dhaka
actually had a fall in 2005, contrary to its general increasing trend. Actually the
predicted increase that year was even higher than the 17% of last year. But in
the last half of 2004 two incidents changed the scenario. First of all there was
the flood. The second reason was even more serious. The political unrest in the
country following August 21 bomb attack in Awami League meeting had hit the
struggling travel industry of the country hard. A large number of tourists shied
away from visiting Bangladesh as they felt insecure here due to the latest
violence sparking off political uncertainty. Room occupancy rate in five star
hotels like Sonargaon, Sheraton and other private hotels went down drastically
following the August 21 bomb attack. Then again last few years the travel
industry did have to face a hard time due to the 1/11 situation, terrorism, Iraq
war, SARS, Global recession and SWINE flu. Consequently hotel occupancy
dropped to its lowest level in the past 30 years
But Bangladesh has achieved significant growth both in the number of tourist
arrivals and the amount of income from them during the first quarter (January-
March) of the current year (2009). According to the statistics available from
Bangladesh Parjatan Corporation (BPC) the total number of tourist arrivals into
the country during the first three months of the year was 43,772 against the
total of 32,470 during the corresponding period last year.
Except for the 1/11 incident, nothing significant has happened to affect the
occupancy of the hotels substantially for the last few years. The average
occupancy rates of the hotels have remained quite constant over the years. A
question might arise here. The number of visitors has been increasing. Why is
then the occupancy not increasing? The answer lies in the ever increasing
number of boutique hotels and guest houses. The supply has been increasing
along with the demand. In fact supply is still much in excess of demand as
certainly none of the hotels have 100% occupancy. But the good thing is that the
occupancy rates of Westin, Radisson, Sonargaon and Sheraton are not falling
much as well, indicating that the market is growing fast and that they are being
able to retain their share of the market.
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2.5 Hotel season in Dhaka
Five star hotel market of Dhaka is historically buoyant in November in terms of
occupancy and ADR. January, February, October and November are the strongest
among the twelve months. April, June, August including September is the low
(soft) period of the year. In Particular June, July and August remains weak
historically, due to the rainy season associated with periodical floods. Occupancy
also varies at the Ramadan as it follows the lunar calendar. The first half of the
December is very active and vibrant but afterward businesses slow down in
sluggish mood.
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2.6 Pricing Structure in the Hotel industry
Hotel market in Dhaka has no integration on pricing.
Hotels offer preferred corporate rates to clients based on their annual
business volume production.
Preferred corporate rates in this market are based on non-last room
availability, a price that is common in Dhaka corporate hotels.
However most of the corporate customers are not singing the contracts on
NLRA basis even though hotels are trying hard to enforce this contract
system.
2.7 Five star Hotels SWOT analysis
2.7.1 DHAKA SHERATON:
Strength:
Well known brand hotel. Newly built meeting venue to accommodate any of the guest needs Long experienced service system. Located at cities most VIP area. Dedicated and experienced associates Spacious meeting places including pre function areas. Well secured. Choice of restaurants 3 and bars 1 and close to government secretaries
Weakness:
Very old interior of the lobby. Poor renovation of large function halls. Old property, which made its customers monotonous One hour drive from the airport. Outside damage. Air, Sound pollution.
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Opportunities:
For becoming an old property they can play with price. By renovating the property with modern technology Sheraton again can
comeback. Starwood Preferred Planner guest loyalty program Growing up MICE business at Dhaka. Prestigious brand to local people Near to the financial district. Massive renovation work in Pan Pacific Sonargaon.
Threats:
Traffic congestion Presence of Radisson water garden hotel and Westin, renovation of the
hotel Pan-pacific Sonargaon Relocation of Business hub SPG loosing due to The Westin Dhaka. New Sonargaon Hotel after renovation.
2.7.2 RADISSON WATER GARDEN HOTEL
Strength:
Globally known brand new hotel, beautiful location. Dedicated entry to the ballroom Very close to the airport and business zone Free from traffic congestion. Extensive meeting facilities with two big ball rooms Choice of five food and beverage outlet. Beautiful landscape
Weakness:
Away from city center, thus guest needs to travel long on the busy road to reach to the workplace.
Transportation facility is not good or limited for all types of guests. Inadequate suites to accommodate high profile delegation.
Opportunities:
Growing market. Growing up MICE business in Dhaka. Guest demand for new property new location Good safety security as owned by army Guest preference to stay near to airport
Threats:
Small hotels, convention centre nearby location
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Starwood preferred guest loyalty program Opening of the Westin Dhaka Strong competitors from nearby The Westin Dhaka, Sarina, Lake shore. Rate dilution with the opening of the Westin Dhaka to hold market share.
2.7.3 PAN PACIFIC SONARGAON HOTEL
Strength:
Strong support by Japanese guests. Car Parking for 450 cars Renovated meeting rooms. Spacious Lobby New equipments Dedicated entry Good relationship with government Newly built recreational facilities.
Weakness:
Traffic congestion 25 years old employee, average age of staff is 45 years One hour drive from airport
Opportunities:
Growing up MICE business in Dhaka. Strong relationship with government official. World class renovation Closer to Petro-Bangla, BGMEA and other business houses.
Threats:
Strong competition from other hotels, as Dhaka Sheraton, Westin and Radisson Water Garden hotel.
Starwood Preferred guest loyalty program Guest demand for new banquet venue Rate dilution with the opening of the Westin Dhaka to hold market share
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2.7.4 THE WESTIN DHAKA
Strength:
Westin is a new hotel with strong brand name. Unique meeting rooms. Located in the business area Impressive atmosphere of the ballroom with discreet high-tech
installations, such as LED lighting which changes colours and an integrated control panel
Variety of setup options with new equipments Service culture of the Westin Brand Reservation system Less turbulence during political agitation. Near to airport New business hub Near to Embassies, foreign missions and multinational companies.
Weakness:
Service experience Limited Car parking facility Less space at lobby Pillar’s inside the ballroom Entry of the function halls Small Pre function area. VIP room. Vertical building less space.
Opportunities:
Our competitors may be slow to adopt new technologies Starwood Preferred Planner There is opportunity to develop new style of catering service. Growing MICE business at Dhaka. Will stop unwanted person to enter for not having direct entry. Has a reputation for world class service Location , for being near to many big office it should be easier make them
our client Guest demand for a new hotel
Threats:
Three five star hotels nearby with different dimensional meeting facilities. Competition is increasing almost daily, with new entrants coming into the
market as Regency international, Hilton, Holiday Inn. Many small hotels, convention centre at nearby location.
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Chapter - 3
PROSPECTS OF TOURISM INDUSTRY IN BANGLADESH
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3.0 Introduction
Bangladesh is situated on the north-eastern side of the South Asian subcontinent
and is bordered by India in the east, west and north; by a small part of Myanmar
in the south-east and by the Bay of Bengal in the south. Bangladesh is mainly a
flat alluvial plain, criss-crossed by the world's three mighty river systems, namely
the Padma, the Jamuna and the Meghna and their innumerable tributaries. The
land mass of Bangladesh is home to 120 million people. The hill districts are
situated in the eastern fringes of the country reaching an average elevation of
660 meters. The slopes and valleys are covered with virgin forests that are home
to numerous flora and fauna. In the south are the Sundarbans, the world's
largest mangrove forest and the habitat of the Royal Bengal tiger. The climate of
Bangladesh is sub-tropical with a hot and humid summer and a cool and dry
winter. Annual rainfall ranges from 160 to 200 cm. The best period to visit
Bangladesh is from November to March when a temperature ranges from 13.50
C to 26.50 C.
3.1 Tourism
Despite its poor-country status, increasing numbers of tourists have visited
Bangladesh, a new but minor source of foreign exchange earning. Tourism in the
early 1990s amounted to some 49,000 visitors per year, but by 2006more than
129,000 tourists--mostly from India, the United States, Britain, and Japan--visited
Bangladesh. According to the Bangladesh Parjaton Corporation (Bangladesh
Tourism Corporation), some Tk 44.6 million in foreign exchange was earned in
1986 from the tourism industry.
3.2 Tourism potential of Bangladesh
Bangladesh is located conveniently on the east-west air-corridor making it a
gateway to the Far East. It is endowed with resources and the potential for a
tourism industry. In the south-east the country has a 120 km long beach of soft
silvery sand, perhaps the world's longest, in a Riviera-like setting with crescent-
shaped low hills overlooking the Bay of Bengal.
The ranges of the hills clad in lush green thickets are treasured locations for
eco-tourists and wildlife watchers. At the head of this terrain is Cox's Bazaar
which is as romantic as its name is to the outside world. The Hill Districts to the
north and north-east of Cox's Bazaar nestle the Kaptai and Rangamati lakes, a
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840 sq.km body of crystal clear water lying in sylvan shadows not far from where
a dozen hill tribes follow their traditional life-styles.
The Tea District of Sylhet in the far north-east of the country has prospects of
tourism, as does the Sundarbans, a large mangrove forest in the South which is
home of the Bengal tiger; remains of palaces of old principalities and
archaeological sites of Buddhist monasteries. Shrines and holy places, mosques
and temples, particularly in the northern part of the country, are among the
tourist treasures of Bangladesh.
3.3 General trends in inbound tourism
Unfortunately, since its independence in 1971 following a devastating war of
liberation, Bangladesh has gotten publicity about negative incidents like natural
calamities, cyclones, floods and epidemics, in the international media, and this
adversely affected international tourist flows to the country. The trend appears
to have continued in recent years. Statistics showing foreign tourist arrivals for
ten years to July 2006 is presented in annex table 1. For three consecutive years
up to 2006, there has been encouraging annual growth in international tourist
arrivals. It is expected that the growth rate would further increase in the coming
years. It is also expected that eco-tourists and special interest tourists will
increasingly choose Bangladesh as one of their destinations.
Tour operators of the country are expected to intensify their efforts to bring in
more groups and package tours. In order to develop tourist products, the country
has already begun development of a second sea resort at Kuakata, a half-day
trip from the Sundarbans. As shown in annex table 2 which shows the nationality
of tourist arrivals, India is the top tourist generating country for Bangladesh,
closely followed by United Kingdom and the United States of America. Trends for
in bound tourism from traditional tourist market areas like Germany, France and
the Scandinavian countries appear to be positive. Bangladesh can count on a
"favoured nation" status with respect to tourist arrivals from Japan.
3.4 Foreign exchange earnings from tourism
When considering foreign exchange earnings from tourism or tourism receipts.
The amount might seem rather small. Annex table 3 shows foreign exchange
earnings from tourists and other travellers. The annual growth rate over the last
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three years is noteworthy. Though tourism has not assumed a significant role in
the national economy yet, it is hoped that tourism shall grow to contribute
significantly to the national economy in the future.
Bangladesh monthly foreign tourist’s arrival from 2003-2008