FT Online

Published:
2019-08-19 12:15:42 BdST

Non-compliant hotels risk ruining tourism prospects


Scores of posh hotels, motels and resorts have skipped star ratings from the ministry of Civil Aviation and Tourism to avoid duty, taxes and other 'hassles'.

However, many of these hotels claim to have three to four star facilities.

As per the list available with the Civil Aviation and Tourism Ministry, eight five-star hotels are in Dhaka, five in Chattogram and Cox's Bazar and one each in Moulvibazar, Bogura and Jashore.

There are only four registered four-star hotels in the country. One of them is in Dhaka, two are in Chattogram and one in Sylhet.

When it comes to registered three-star hotels, there are only eight in Dhaka, seven in Chattogram, two in Khulna and one each in Bogura and Barishal.

But an online search has revealed that about one hundred hotels located in Dhaka claim to have high star ratings despite having no registration to that effect. The picture is almost similar in Cox's Bazar, Sylhet and Chattogram.

There are many hotels that even do not know why the licence of the ministry is required. Even it has happened that a hotel has got varying ratings of travel promotion agencies.

Hoteliers, however, say most of the hotels, motels and resorts providing excellent services to customers are reluctant to obtain licences from the ministry conforming to their star ratings due to various hassles.

Most of them obtain licences from the offices of the deputy commissioners (DC) confirming their one or two-star ratings.

But verbally they claim to have five-star rankings and charge the customers accordingly. They do not get registered mainly due to the high rates of VAT, tax and supplementary duty, they say.

However, tour operators and tourism experts say high prices quoted by these hotels with self-declared high star ratings has been an impediment to making the country travellers-friendly.

Because, room rentals and tariffs on other services are the highest compared to other Asian nations, they claim.

The other Asian countries have been able to attract a higher number of tourists than Bangladesh with more facilities on offer, they say.

When contacted, sources at the Civil Aviation and Tourism Ministry said they had no idea that a large number of hotels were running business in the country claiming to have high star rating despite having no registration to that effect.

The sources said they wanted to step up monitoring by intensifying inspection of those hotels.

Talking to the FE, Journey Plus chief executive Taufiq Rahman said the cost of inbound tourism is more than double in Bangladesh compared to other Asian nations. "The lion's share of any tour package offered to foreign tourists is spent on accommodation."

At five-star hotels, the tariff is US$ 300 for twin-share and minimum $280 for a single room, he said.

In case of the chain hotels, the rates are far less in Kolkata, Kathmandu, Kuala Lumpur, Bangkok and Colombo, said Mr Taufiq.

This difference in the rates is affecting tourism business here, he added.

Regarding the transport costs, he said the fitness of vehicles used for carrying tourists is not up to the mark but the cost is one of the highest. Even the tourists cannot get a vehicle at the airport at a cheaper rate, if not provided by tour operators or any hotels, Mr Taufiq added.

"The overall situation of the tourism sector is: Hotels are not leisure tourists-friendly as the price is set targeting the business travellers. Transportation and foods are also very expensive making the country unfriendly to travellers," he said.

Mahbub Hossain Sumon, managing director of Touch Creation, another inbound tour operator, said the cost of travel is the highest in Dhaka. Bangkok has the lowest room tariff in case of star chain hotels.

Echoing Mr Taufiq, he said the costs of food, accommodation and transportation are the highest in Bangladesh. But the prices are low in budget hotels.

Regarding the problem of claiming the status of star hotels, Mr Sumon said there should have been a single authority who should issue licences to hotels, motels and resorts based on their services, room quality and other criteria. First, there should have been an authentic list of the hotels, motels, resorts and their nature of services to bring those under regulations and the star ranking, he added.

About a cut in travel costs, Mr Sumon suggested that the government waive import duty on various vehicles brought in by hotels, motels and tour operators. But they must ensure that those vehicles are used for the tourists only, he added.

Waiving the VAT, tax and supplementary duty on the hotels and motels can also reduce the cost of the travellers' stay in Bangladesh, he suggested.

During an investigation, it was found that five-star chain hotels quoted prices ranging from US$ 200 to over $500. Some local unregistered three, four and five-star hotels quoted prices ranging from US$ 50 to $ 250.

When contacted, a sales executive at The Olives said they provide five-star services, although they are registered as a four-star hotel. International travellers do not follow the local ranking, he added.

Regarding the government's registration system, he said they work with various ministries, NGOs, government-affiliated organisations and also recommended by the United Nations Department of Safety and Security, he added seeking anonymity.

Another hotel Ascott Palace was claiming to have its four-star status on one website and five-star status on another.

When contacted, they said they were registered but not aware of the government rules.

Another hotel Royal Park Residence claimed to have the five-star status. When contacted at the numbers given on its Facebook page and on the website, those were found switched off.

Bangladesh International Hotel Association (BIHA) secretary Mohsin Haque Himel said they have 42 members. But he cannot say exactly how many of them have star hotel licence.

"We check the room numbers and service quality and then we give membership. Recently, we have started giving membership to only three-star hotels. We check the licences and applications before registration for the upcoming hotels," he said.

Experts say hoteliers face various hassles in getting licence. The hotels have to pay the city corporation tax at a rate of 3.0 per cent, 4.0 per cent and 5.0 per cent based on their star ranking without getting any benefit.

Besides, the rate of VAT, tax and supplementary duty are so high that the hoteliers are reluctant to get star licence and find it easy to operate with a one-star licence. They are comfortable as no one raises any objection with their star ranking, they added.

When contacted, additional secretary at the Civil Aviation and Tourism Ministry Mizanur Rahman said under Bangladesh Hotel and Restaurant Act 2014 and its rules, star ranking is provided by the ministry depending on the criteria. Hotels and restaurants are approved by the DCs concerned, he added.

The ministry has no control over the pricing policy of the hotels. Neither are they aware of the self-claimed star rankings of a number of hotels nor that of motels, he said.

"We will beef up our monitoring by intensifying inspection and bring them under licensing. Besides, action will be taken if anyone complains about any illegal star hotel or motel," said Mr Rahman.

Unauthorized use or reproduction of The Finance Today content for commercial purposes is strictly prohibited.


Popular Article from Tourism