Unique Group, the owning company of Westin Dhaka, is set for expansion by opening three more five-star hotels to tap growing demand for high-heeled accommodation.
Initially, the company plans to invest around Tk 2,000 crore for expansion, while Starwood Hotels and Resorts Worldwide will be the managing company for all three hotels.
A deal will be signed today between Unique Group and Starwood, the parent company of renowned global brands such as Westin, Sheraton and Le Meridien.
"At present, the local market for five-star hotels is increasing at a rate of 15 percent a year, and it will double in the next three years," said Mohammad Noor Ali, managing director of Unique Group.
"So as an investor, I have to look to the future and plan on capturing the country's hospitality business in the long run. And that is the main reason behind this expansion plan."
Under the plan, two five-star hotels are to be constructed in Dhaka: Le Meridien in Banani and The Westin Dhaka 2 in Gulshan. A third, also named Westin, will open in Chittagong, the first five-star hotel for the commercial capital.
Construction of the hotels will be complete by 2012-end and all are likely to begin operations the following year.
"Simultaneously, I have Starwood, one of the best hotel management companies in the world, with me, which gives me added confidence," said Ali, also the managing director of Westin Dhaka.
In recent years, the hospitality sector in Bangladesh has boomed in the five-star hotel segment. Three new five-star hotels opened in Dhaka in the past four years, taking the number to five.
Industry experts said the capital city now has around 1,250 five-star rooms. The hotels reach full occupancy only in winter and an average occupancy rate of around 75 percent can easily make the business profitable, they added.
"One of the drivers of growth has been the increase in foreign business people visiting the country, as both the garments and telecom industries have taken off," said Ali.
"Apart from that, the geographical location of these hotels will also exploit the proximity to airport and the garment belt in Ashulia-Savar, as well as the headquarters of the major mobile telecom operators," he said. "The country's diplomatic zone is also near our hotels."
Ali is optimistic about profiting from the hotel in Chittagong, as the number of affluent visitors, including investors, top officials from banks and port, and shipping businessmen, are increasing fast in the region.
The company is conducting studies to assess demand for accommodation and the regular flow of guests to the port city. The room rent for the Westin in Chittagong will be slightly lower than in Dhaka, said the Unique Group chief.
The annual turnover of Westin Dhaka was Tk 106 crore, and the operating profit was around Tk 47 crore in 2008, which grew by 20 percent in 2009, Ali said.
The 235-room Westin has an average occupancy of 80 percent, while the hotel has gained a 25 percent share of the total market.