Star hotels dodge recession impact

Hotel occupancy rate indicates good business
Business executives from abroad have begun flocking to Dhaka’s five-star hotels in recent days — a trend that indicates negotiations and deals on advance export orders from the West for spring and summer of 2010.
Occupancy rates in four major hotels in the capital have increased significantly now compared to a slump in the hospitality business in other countries and also at home in earlier months under the impact of the global recession, sources in the sector said.
Experts believe, such business tours months before the spring and summer seasons from buyers from Western countries or their agents show signs of economic recovery there, signalling good news for Bangladesh’s export-earning sectors, especially readymade garments.
Meanwhile, multilateral lending agencies have already forecast that the global economy might rebound from the current recession in 2010, given the response to the stimulus packages in different countries and international initiatives to increase consumers’ demands.
Foreign clients occupy 80-85 per cent rooms at Radisson Water Garden and Westin Dhaka while the occupancy rates are in a range of 65 per cent at Pan Pacific Sonargaon Hotel and Dhaka Sheraton Hotel, according to the records of the past week.
‘Business has significantly boosted at this point of time, compared with earlier months’ average when the recession was most palpable in the global economy. Although the current occupancy rates are about 10 per cent below the previous years’ rates, we find it very good in view of the situation,’ Shahidus Sadique, marketing and communications manager of Dhaka Sheraton, told New Age.
Asked about the client profile, he said businesspeople, especially buyers, make up most of their foreign guests who are busy making appointments with local company executives and negotiating business deals. ‘This indicates exports of our country may see a big leap from the second quarter of 2010,’ he added.
The buyers are now negotiating with local counterparts to place export orders for products, particularly garments, for the spring and summer, industry people said. However, except garments, the country might face difficulties in exporting frozen foods, leather products and jute and jute goods.
‘We have scopes to increase exports in the coming fall and winter seasons; we have scope to enter a higher export growth regime from the next spring and summer with the West recovering from the recession,’ said Zafar Iqbal, director of Gooryong, a South Korean firm engaged in garments export business. ‘We wish Western countries get their confidence back by this time and we will be the eventual beneficiaries.’
Asked about the prospects of export in 2010, a research fellow of Bangladesh Institute of Development Studies, Nazneen Ahmed, said Bangladesh has reasons to be confident about the growth in exports of garment items in view of the signs of recovery in the United States.
‘Even if the consumers there maintain a slight caution after getting back jobs due to demand creation, I think Bangladeshi exports can cash in on the potentials of lower end products that have higher demands,’ she said adding that the exporters must be careful about market competitiveness in the face of challenges coming from other market competitors.
The global economy is beginning to pull out of a recession, but stabilisation is uneven and the recovery is expected to be sluggish, according to the International Monetary Fund’s outlook released in early July. The Asian Development Bank on Thursday said that Asian economies would likely bounce back from the global economic slump in 2010 but fears remain over the sustainability of growth if there is no wider recovery.
The Bangladesh Bank, while announcing its latest monetary policy, cautiously projected two scenarios on the fallouts of the global recession on the Bangladesh economy. The central bank said a prolonged recession might affect remittances, investment and economic growth while an early recovery might cause commodity price hike triggering inflation in Bangladesh.

Courtesy of NewAgebd