Westin, Sea Pearl navigate global economic storm while Peninsula struggles

Five-star hotels The Westin Dhaka in Dhaka and Sea Pearl Beach Resort in Cox's Bazar have seen big growth despite the country's economic crisis due to inflation, high dollar value and the energy crisis.

However, the financial crisis has negatively affected the business of The Peninsula Chittagong.

The state-owned Bangladesh Services' Hotel Intercontinental has seen a rise in revenue but has yet to break out of the circle of losses.

This information has been revealed by reviewing the financial reports of the companies for the July-September quarter of the financial year 2022-23.

Four companies dealing in luxury hotels are listed on the country's stock market. Among them, Unique Hotel is owned by Westin, Bangladesh Services and The Peninsula Chittagong are owned by Unique Hotel, Sea Pearl Beach Resort and Spa, and Intercontinental.

Except for The Peninsula Chittagong, three others are run by foreign companies in exchange of royalty. 

During the first quarter of the current fiscal year, The Peninsula's revenue grew by 65% to Tk9.55 crore compared to that in the previous year. But inflation has eaten up its revenue, causing a loss of Tk3.93 crore. One year ago, the profit was Tk3.69 crore.

Mohammed Nurul Azim, company secretary of The Peninsula, told The Business Standard, "We have to import many products to ensure the quality of service in luxury hotels, but the higher value of the dollar has increased the cost. However, in the interest of clients, we have kept the price of the services unchanged. So we have had to count losses."

On the other hand, the revenue of Sea Pearl Hotel increased by 163% to Tk42.98 crore and net profit to Tk15.36 crore in the first quarter whereas the hotel had posted a loss of Tk1.05 crore in the same period of the previous year.

Regarding the increase in the profit margin amid high inflation, Sea Pearl Company Secretary Azaharul Mamun said, "We do not have to import any products to provide luxury quality services to the guests. We procure essential products from local sources through strict quality control. So our costs are under control."

He also said that guest and corporate programmes in the hotel have increased significantly compared to earlier. Besides, the newly launched cruise shipping service in the Sundarbans area has generated good income.

Meanwhile, Unique Hotel has the highest revenue from the hotel business in 2022-23. Its revenue from Westin, Sheraton and Hansa Residence increased by 232% to Tk65.92 crore compared to the same period last year. Net profit was Tk15.35 crores whereas such profit in the same period of the previous year was Tk1 lakh.

Besides, the revenue of Bangladesh Services from the Intercontinental increased by 136% to Tk32.94 crore. But the very high administrative and financial costs of the company caused losses.

Share performance

 Shares of three of the four companies are traded at floor prices on the Dhaka Stock Exchange (DSE). On Thursday, Peninsula's share was traded at Tk27.40, and Unique Hotel's share was at Tk55.80. Bangladesh Services' share was last traded two years ago at Tk5.20. Among them, Unique Hotel has seen good growth in profit, but there has been no change in its share price.

However, there has been a significant jump in the share price of Sea Pearl. From August this year to 24 November, the share price of the company increased by 277% and traded at Tk177.60.

The DSE issued a notice in September seeking to know the reasons behind the unusual rise in the company's share price. But in response to the notice, the company said that it did not publish any price-sensitive information to increase the share price.