CPEC investments lift Pakistan’s hospitality industry

Jovago CEO says improved security situation, Chinese visits create opportunities

KARACHI: Infrastructure investments for the China-Pakistan Economic Corridor (CPEC) have given a helping hand to Pakistan’s hospitality industry as new hotels and guest houses are emerging in different parts of the country, said Jovago Asia Chief Executive Officer Nadine Malik.

“Pakistan’s middle class is growing and with higher disposable incomes, people are shelling out more money for leisure activities,” she said in an interview with The Express Tribune. “This is expected to further grow in coming months.”

Pakistan has achieved 5.3% gross domestic product (GDP) growth - the highest in a decade - in the outgoing fiscal year 2016-17. Gradual improvement in macroeconomic indicators and security situation since 2013 has helped all important sectors in the country.



Jovago.net, an online hotel booking website launched in 2014, has now over 2,000 partner hotels across Pakistan and 225,000 hotels around the world.

Jovago Pakistan (Private) Limited is owned by Rocket Internet SE, a Berlin-based company, which invests in internet companies and provides operational support for its firms to help them grow internationally.

“Chinese are coming to Pakistan in big numbers, which is also an opportunity for us,” she said, adding though most of them are coming to work on mega projects where they have company accommodations, there is still potential for the hospitality industry as new guest houses are being constructed in the country.

While refusing to share the exact data of annual hotel bookings, Malik said the total number of visitors on the hotel booking portal jovago.net has crossed 3 million since the website’s launch in 2014.

Jovago caters to domestic tourists while only 2% of its customers are foreigners. Its top season is June and July mainly due to summer vacations. In its first year of operations, most of its clients travelled to Naran and Kaghan in Khyber-Pakhtunkhwa, but later people also took interest in Muzaffarabad, Azad Kashmir, Hunza, Skardu and Gilgit-Baltistan. She said places like Naran, Kaghan, Hunza, Skardu and Muzaffarabad are open only for four to five months from April to August, so a lot of Jovago’s traffic is also concentrated in these months.

The second busy season is December during which families travel mostly from one big city (like Karachi, Lahore and Islamabad) to another due to winter vacations. A lot of travellers from mid-tier cities (like Faisalabad) also go to Islamabad and Lahore.

Most of the portal’s clients make business trips to Karachi, typically for just a few hours. However, due to improving security conditions in the city, a lot of them are now bringing their families with them to stay for a few days.

For instance, Malik said Arabian Country Club - a sprawling place with sports facilities such as golf and others about 45 kilometres east of Karachi - is usually booked out all the time.

“Our hotel partners in Karachi say that their occupancy rate, which was not more than 50% in 2014 on a good day, is now in the range of 70-80% mainly due to improving security situation in the financial capital of Pakistan.”

According to the Jovago CEO, the concept of long weekends is gaining momentum in Pakistan. For instance, a considerable number of people travelled around March 23 - a national holiday - that has been falling around weekends for the last two years.

Challenges

Malik said a lot of people still hesitate to travel inside the country due to perceived security threats. Apart from this, she added, there is a lot of room for improvement in terms of roads and other infrastructure facilities that could increase domestic tourism.



She felt that Pakistan needs more four and five-star hotels because the country has many two and three-star hotels but it lacks big ones.

According to Jovago Pakistan estimates, Pakistan’s annual travel, tourism and business travel spending exceeds over $12 billion. Leisure travel spending is expected to grow from $10.3 billion in 2016 to $17.6 billion in 2026 while business travel spending is expected to jump from $1.9 billion in 2016 to $3.3 billion in 2026.

Published in The Express Tribune, June 29^th, 2017.

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