Luxury hotels struggle to revive pandemic blues business
Luxury hotels thrive to boost business by cutting costs
Listed luxury hotels are struggling to revive activity from the pandemic shock by cutting spending and introducing new services.
The revenue of Unique Hotel, the company that owns the Westin Dhaka, fell 57% to Tk 67.54 crore and suffered a loss of Tk 12.77 crore in fiscal year 2020-21.
Despite the loss, he recommended a 10% cash dividend for general shareholders, but his sponsors and directors will not receive any dividends.
Although there were strict bottlenecks in the first quarter of this fiscal year, the company achieved revenue growth, but it was not enough to make a profit.
In the July-September quarter, its revenue increased 113% to Tk 19.85 crore and despite everything the company suffered a loss of Tk 1.16 crore.
Following the release of the first quarter financial statements, its share price jumped 12% in the past few days and closed at Tk53.90 on Monday on the Dhaka Stock Exchange (DSE).
Sea Pearl Beach Resort, which owns the five-star Royal Tulip hotel in Cox’s Bazar, performed well in fiscal 2021 when it reported 40% revenue growth to 64.39 crore from Tk and made a profit of Tk 7.36 crore on a large cash flow. tourists in the country’s tourist district.
But in the first quarter of the current fiscal year, it suffered a loss of Tk 1.05 crore, despite achieving 16% revenue growth to Tk 16.32 crore.
A Sea Pearl officer said he raised Tk 370 crore through a bond and had to pay Tk 9.82 crore quarterly as an installment. But the company did not earn such an amount from its operation and as a result suffered losses due to the installment payments.
However, over the past few days, its share price rose 8% and closed at Tk 42 on Monday on the DSE.
In addition, The Peninsula Chittagong posted six times higher profit growth to Tk 4.87 crore, although revenue fell 10% to Tk 25.42 crore in the last fiscal year.
The company maintained its earnings growth momentum in the first quarter of this fiscal year. An executive of the company said that during the period when its main business was interrupted by the Covid-19 pandemic.
However, management took improvised measures to reduce avoidable costs. In addition, the current tax rate has also been reduced to 22.50% from 25%, which has helped the company show such growth.
To diversify the activity, Sea Pearl recently launched an organized cruise ship travel program on the Khulna-Sundarban-Khulna route. To operate the new business, the company purchased two cruise ships for Tk 8.50 crore.
The Peninsula Hotel will launch a five-star hotel near the airport in the port city to expand its business. It also increased investment in the capital market. As the market exploded during this period, the company received a good return from its equity investments.
In addition, Unique Hotel is setting up a power station in Narayanganj as part of the diversification of activities.
A senior company official, seeking anonymity, said some of his hospitality projects were on hold due to the pandemic. The company is expected to start the projects next year.
He also said the tourism industry would suffer from the new Omicron variant of the coronavirus. Now the company is observing the situation and trying to introduce new services by following the health security measures.