Armed with hope for a brighter and safer future, there is a group that is looking to invest in the hospitality industry in Pakistan.
Pakistan Services Limited (PSL) is taking a risk and looking to build three new five-star structures in cities where others are reluctant to invest.
PSL is adding three new properties to their portfolio — one in Multan where urbanisation has started gaining momentum, another in Mirpur (Azad Kashmir) where a cricket stadium is also being planned and another in Hayatabad (Peshawar). The ones in Multan and Mirpur are to be branded as Pearl Continental, while the one in Hayatabad could be Zaver- Pearl Continental.
PSL is owned by the Hashoo Group, a diversified conglomerate that owns, among many other businesses, the Pearl Continental (PC) Hotel chain and the franchise for Marriott Hotels in Pakistan. The group owns six properties under the name of Pearl Continental, two with Marriot and one property as Zaver- Pearl Continental.
“The PC and Marriot businesses are improving each year, as the occupancies we share with each other are getting better,” said Haseeb Gardezi, chief executive officer at Pearl Real Estate holding, a sister concern of Hashoo Group, assigned to build these properties. “I am assigned with a job to build these three properties. Work on the projects has started which will complete in another two to three years.”
The hospitality industry of Pakistan has not been posting healthy returns for various reasons.
Industry pundits believe that this industry will only reach its peak once the law and order situation improves drastically, restoring the confidence of the international community.
The management at Hashoo Group believes that the new projects are a part of their long-term business strategy to remain a leading name in the industry. The management believes on taking risks wherever there is margin for growth. A prime example is the construction of a hotel in Gwadar. The hotel continues to incur a loss but the management remains confident that the table would turn.
The cost of these three structures is estimated to be at Rs7 billion, excluding cost of land acquisition. These structures will be constructed with state-of-the art security measures practised by leading hospitality brands worldwide. Many foreign delegations have shown reservations over the old security structures of Pakistani hotels and opted instead for Dubai for business dealings.
Keeping these concerns in mind, Hashoo Group is building new structures, which they claim would be unique. “Cost to build a single five-star room ranges between $150,000 to $175,000. You add certain features and the cost shoots up to $300,000 per room. This price covers all cost including renovations, designing etc,” added Gardezi.
Unlike other brands, PSL is making profits in an overall trouble-ridden hospitality industry. Of the Hashoo Group’s several holdings, only Pearl Continental Hotel is publicly listed on the Karachi Stock Exchange as Pakistan Services Ltd, operating PC chains with a total capacity of 1,526 rooms in six hotels. In nine months of fiscal year 2013-14, the company posted a revenue growth of Rs623 million, up 12% compared to the corresponding period of the previous year. Its after-tax profit clocked in at Rs1,206 million, up 50% compared to the period under review.
Published in The Express Tribune, August 3rd, 2014.
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