Hospitality industry: Room available for international brands

Sector witnessing revival, offers opportunity for investment.

LAHORE:

The hospitality industry is based on services, the quality of which forms opinions of clientele.

Unfortunately in Pakistan, the term ‘service’ or ‘human resource development’ has been put on the backburner by several hotels. Even local five-star hotels sometimes fail to match the standards set internationally.

According to experts, the local hotel industry faced a massive downfall after the Marriott attack in 2008, after which it was apparent that some chains dropped their standards despite claiming a four- or five-star structure.

“The industry from 2009-11 was under fire as it hardly managed daily operations,” said Hotel One Corporate Director of Sales, Qasim Qazi, in an interview with The Express Tribune.

“When someone is struggling for survival, you cannot expect them to spend on human resource development.”

Qazi – currently associated with the Hashoo group in Pakistan – has spent many years serving the hospitality industry abroad and feels that the three dark years, which started with the Marriott attack before the Sri Lankan cricket team also came under fire, had a negative effect on the hotel business.

In the absence of tourism due to security issues, the hospitality industry was heavily supported by the local corporate sector and foreign delegates. The activities of this single sector are the main source of income for Pakistani chains. During the time, the quality of services of many renowned chains was not up to the mark, which left customers dissatisfied.

According to Qazi, in those three years, the industry was slashed and owners were reluctant to give the staff regular increments and bonuses. In such a situation, you cannot expect local brands to spend on human resource, he explained.

“From 2012 onwards, the situation has improved for this industry and I feel that hotels are posting much better results than those three years in terms of profitability and room occupancy,” he added.

For instance the Marriott group in 2009-10 posted only 25-30% room occupancy, whereas in 2012, this occupancy ratio increased to 60%. In 2013, Marriott’s occupancy ratio was around 72%. According to Qazi, currently in Islamabad, the occupancy ratio of five-star structures is in between 70-80%. The trend in other mega cities like Karachi and Lahore is around the same mark—a positive sign for the industry.

“Our hospitality industry is lagging behind,” he said. “We have a few names; I believe that this is the best time for some international brands to come to Pakistan.

“This will create a competition between local and global brands, giving incentive to the local ones to spend on their human resource development.”

Published in The Express Tribune, September 23^rd, 2014.

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