5-star hotels charging Tk115 dollar rate, violating rules

Five-star hotels in Bangladesh are charging Tk115 for a dollar by violating the rules set by the Bangladesh bank, complain foreign visitors.

Several foreigners visiting Bangladesh have complained that these hotels are refusing to accept payments in dollars, and instead are demanding payment in taka.

When the visitors requested them to accept dollars for booking rooms online, the hotel authorities declined, they said.

For example, last week, a foreigner booked a room at a 5-star hotel in Gulshan. He wanted to pay in dollars through his credit card. But, the hotel refused to accept dollars as payment.

Although the hotel had initially quoted room rates in dollars, they insisted on accepting only taka – at a conversion rate of Tk115.

Reflecting on his experience, the foreigner said he had to pay an additional Tk7,000 for the same room compared to a few months ago. He said he frequently visits Dhaka for business purposes.

When contacted as a customer, the booking operator of the 5-star Renaissance Dhaka Gulshan Hotel admitted to overcharging for dollars. He said the hotel usually accepts dollar payments, but if a customer wants to pay in taka, the hotel converts the dollars at a rate of Tk115.

However, on their website, the hotel mentioned that "All payments are required to be made in the local currency – BDT – according to the hotel's currency conversion rate."

Seeking anonymity, a Bangladesh Bank official told The Business Standard that banks are selling or buying dollars at the highest Tk109 per dollar. Money-changers can buy or sell dollars by adding Tk1 to the bank's dollar rate.

"Hotels are limited money-changers, only authorised to buy dollars. This means they can charge a maximum rate of Tk110 per dollar. However, there are no rules governing the conversion rate for foreign or local customers. If hotels charge a higher rate, it would be a clear violation of the rules," he said.

However, the chief financial officer (CFO) of a 5-star hotel told TBS that such conversion rates are prevalent all over the world. Currently, the dollar is being sold at Tk112-Tk113 in the curb market of Bangladesh. In addition, the dollar price is fluctuating in the market.

"So, we charge the dollar rate as Tk115 considering the volatile dollar market. Not only are we but other 5-star hotels in Bangladesh also charging the same rate," he said.

When asked how this conversion rate is being fixed, he said that each hotel fixes the conversion rate on its own. 

"It is not fixed by the Bangladesh International Hotel Association (BIHA). But, we sometimes discuss the conversion rate among ourselves. We need not take any approval from the Bangladesh Bank, he mentioned," he said.

He further said that 96% of a hotel's income comes from room rent and food. As a result, hotels with higher rates can increase their income by 4.5% by charging a higher conversion rate for dollars.

Shakawath Hossain, chief executive officer of Unique Hotel & Resorts PLC, the parent company of the Westin Dhaka and Sheraton Dhaka, ‍admits to taking Tk115 per dollar rate.

Hossain, who is also the co-chairman of BIHA's standing committee of planning and development, told TBS, "We are taking dollar payments from the customers. However, anyone can make the payment in taka. Usually, as an international hotel, we publish our rent and prices of food in dollars."

However, there are other hotels that accept both taka and dollar payments, and they are following the rules. For example, the state-owned 5-star hotel InterContinental Dhaka accepts both currencies. According to the hotel's booking hotline, the conversion rate for dollars is Tk110.

Md Mezbaul Haque, spokesperson and executive director of the Bangladesh Bank, declined to comment on the matter.

The central bank regularly takes action against institutions that violate the dollar rate rule. In the past year, the central bank warned several banks and punished them for buying and selling dollars at a rate higher than the fixed rate.

As the dollar crisis started in April 2022, the central bank and law enforcement forces conducted several raids on money changers who were charging excessive prices. In the raids, 42 firms were booked for various irregularities in dollar trading and the licences of five firms were suspended.