All the big and small and five-star hotels are in crisis. Even if the luxury hotels have got their earnings shrunk, they spend a huge sum on their operating expenses
The hospitality industry is bearing the brunt of pandemic gloom, with the four listed hotel companies taking a roller-coaster ride from the pre-pandemic period to date.
Bangladesh Service Limited (BD Service), a government agency operating the Intercontinental Hotel and Bangabandhu International Conference Center, has incurred a loss of Tk46.25 crore in the 2019-2020 financial year.
After a long hiatus in renovations, Intercontinental launched its new version last year. The hotel had been at a loss from the financial year of 2015-2016 as it had no income before its relaunch.
BD Service made a profit of Tk24.05 crore in the first three quarters of the last financial year of 2019-2020. Due to the loss in the last quarter, the net loss at the end of the year stood at Tk46.25 crore. This loss is mainly due to Intercontinental.
Nazmus Sadat Selim, company secretary to BD Services, told The Business Standard, "The current state of business is a bit better than it was in July and August, but it does not cover the fixed cost let alone profit."
He said: "Intercontinental is a five-star hotel relying on foreign guests. The occupancy rate at the hotel will not grow until the global Covid-19 situation improves or vaccines arrive. The booking rate is now only 4-5%."
One of the most-affected sectors due to the pandemic is hotel and tourism. All the big and small or five-star hotels are in crisis. The five-star hotels that rely on foreign guests face huge losses. Because, even if there is no income, these hotels have to spend a huge sum on their operating expenses.
All the four hotels -- Unique Hotel & Resorts, The Peninsula Chittagong, Sea Pearl Beach Resort and Spa Limited and Bangladesh Services Limited -- listed in the capital market were profitable in the first three quarters (July-March) of the last fiscal. In the last April-June period, all of them incurred loss.
Of the four, two suffered losses at the end of the year. Although two of them made profits, that was much less than that a year ago.
Based on the total loss of Tk46.25 crore, the loss per share of BD Services stood at Tk4.73 at the end of the last fiscal year.
Losses have continued in the first quarter of the current fiscal year of 2020-2021. In July-September quarter, the loss of BD Service was Tk12.12 crore while its loss per share was Tk1.24.
The income and profit of Peninsula has also decreased. At the end of the year, the company paid a 10% cash dividend due to its profit of Tk59.33 lakh.
In the first nine months of the last fiscal, Peninsula profit was Tk4.90 crore. In contrast, the loss in the fourth quarter alone was Tk4.45 crore.
However, in the July-September quarter of the current fiscal, Peninsula has returned to good profits. The company has made a profit of Tk3.16 crore this quarter while its EPS has been Tk0.26. The profit for the same period last year was Tk1.99 crore.
According to the company sources, profit has almost doubled this quarter due to lower cost of sales and administrative costs. Unique Hotel & Resorts, which operates the five-star Westin Hotel, made a profit of Tk28.01 crore in the last financial year, with earnings per share (EPS) Tk0.95. Last year, The Westin's profit was Tk59.75 crore.
In the fourth quarter of the last fiscal, the company had incurred more than Tk6 crore loss.
However, in the first quarter of Fiscal Year 2019-20, Unique Hotel & Resorts witnessed 82% fall in its revenue and incurred a loss of Tk.84 crore.
Sea Pearl Beach Resort and Spa Limited has also incurred losses at the end of the year due to fixed cost and loan interest. The hotel had a loss of Tk1.10 crore in the last financial year. Its loss per share was Tk0.09.
Julhas Biswas, chief financial officer (CFO) of Sea Pearl Beach Resort, told The Business Standard, "There was no revenue at the end of the year as everything was closed. Although the income was in positive territory till the third quarter, finally it was negative."
He added that as the situation has improved a bit, the number of people arriving at the hotel has increased, but it will still take a long time to get back to normal.