Search for Sheraton operator hits snags
The government's search for a new company to operate and manage Dhaka Sheraton Hotel is stuck in an earlier plan to renovate the hotel without shutting it for a year.
A one-year closure means profit loss for the government and temporary joblessness for the hotel's 600 employees.
The government continues talks with Ramada Plaza, a three-star hotel of US-based international chain Wyndham Worldwide, and Marriott International. A Marriott team is set to arrive in Dhaka by the end of this week for negotiations.
The government has bargained with at least seven international hotel chains in the last six months mainly on renovating Sheraton without closing it.
“We are prioritising renovations by keeping the hotel open. Also, we are considering the costs of repair and returns we might get," said Civil Aviation and Tourism Secretary Syed Mohammad Zubair.
The cost of renovations will stand around $20 million.
"We are open to talks. We'll go for whoever offers better management and renovates the hotel by keeping it open,” he said.
Zubair, also the key person of Bangladesh Services Ltd (BSL) that owns Dhaka Sheraton, said the government was set to finalise the management deal by the end of the month for the next five years.
In November, Starwood, the management company of Dhaka Sheraton, extended its contract with the government up to March 31. Starwood's 25-year deal expired on December 31.
Zubair said the hotel, one of the oldest in the country, required renovations to get more customers in the now-competitive market.
“At the same time, one must say that the hotel is making profit with its present conditions,” Zubair told The Daily Star in an interview.
“If we go for renovations, we will have to make sure the hotel is in operation during the period,” he said.
“Apart from the government's revenue loss, we have to think more than 600 staffers now working at Sheraton may become jobless for a year,” he added.
“Private five-star hotels are now doing very good business and brought competitiveness to the sector,” said Zubair. "The state-run hotels should not be closed for a year if we want to stay in the race.”
Sheraton that made an operating profit of $4.16 million last year now expects a 10 percent profit rise this year, according to Trevor MacDonald, general manager of Dhaka Sheraton.