Govt should pay special attention to hotel industry in promoting tourism
An exclusive interview with Akhtar Riaz — General Manager, Hotel Mehran
PAGE: How do you review the performance of hospitality industry in Pakistan?
Akhtar Riaz: In my view, the performance of hotels and restaurants in Pakistan may be reviewed on two benchmarks: 1) quality of food and services and 2) profitability. In Pakistan the cost of doing business is constantly on the rise due to depreciating rupee and rising cost of utilities. Added to these is the lust of the government to impose new taxes or increase the rates. Under such a prevailing environment the management has two options, keep on increasing rates or compromising quality. Keeping in view the rating of our hotel, we have to keep the rates affordable without compromising on quality. This reduces our profit margin and in the long run does not allow undertaking timely BMR (balancing, modernization and replacement).
PAGE: What is the average occupancy rate in Pakistan?
Akhtar Riaz: The average occupancy rate in big cities may not be very high, but there is regular and consistent traffic throughout the year. However, in areas having seasonal influx of people, occupancy rate remains negligible during the off season. Therefore, owners become keen in maximizing profit during the season and at time forced to compromise on quality, which often annoys the visitors. Let me refer to the conditions in Murree at this time. Due to the summer vacations there is extra ordinary rush. There are intermittent announcement that people should avoid visiting Murree but all in vain. Therefore, my suggestion is that more picnic spots should be developed throughout the country. In this regard, I would especially refer to the development of ‘Gorakh Hill’ in District Dadu of Sindh.
PAGE: Do you believe that flourishing of hotel industry is directly dependent on inflow of tourists in Pakistan?
Akhtar Riaz: Around the world, the wellbeing of hotel industry is dependent on tourism. Therefore, the respective governments pay special attention to the hotel industry because it is a major earner of foreign exchange. Now referring to Pakistan, though the government has declared hotels an industry but utility tariffs are charged on ‘commercial rates’. Similarly, hotels use imported food items on which very high import duties and other taxes are charges. Therefore, my humble request is that hotels should be allowed to import food items on concessional rates.
PAGE: Do you believe that tourists are reluctant to visit Pakistan because of the ‘negative perception’ of the country?
Akhtar Riaz: Let me say that the ground realities are not as bad as being portrayed by the foreign media. Our government has not been able to counter the negative propaganda. A large number of Pakistanis living abroad prefer to go to UAE, Malaysia and other countries to enjoy their holidays. Age number of Sikhs and Buddhists wish to visit Pakistan but either they are discouraged by their governments or our embassies have not been able to issue timely visas. Our policymakers are not able to understand the simple fact that when the tourists come to Pakistan, they pay in foreign exchange. In simple words, increasing the inflow of tourists, increases influx of much needed foreign exchange.
PAGE: What is the percentage of walk-in guests?
Akhtar Riaz: Around the world bulk the largest percentage of guests can be termed ‘walk-in’ customers that also include those making on-line booking. As against this, in Pakistan the largest percentage of guests can be termed ‘corporate clients’. While they are a guaranteed source of income, they pay highly negotiated rates.
PAGE: Do the local business schools offer courses in hospitality?
Akhtar Riaz: I am afraid these schools do not offer courses in hospitality management. There are a few privately owned institutions but they charge exorbitant price. Since the remuneration being paid in hospitality industry is paltry, upcoming generation is not keen in joining this industry. It is a common complaint that at lower level remuneration being paid by big names is also low. Having said that, I take pride in saying that Hotel Mehran not only pays good remuneration, but also provide the new entrants extensive in-house training.
PAGE: How do you rate food quality of your hotel?
Akhtar Riaz: I am delighted to inform you and the readers of Pakistan & Gulf Economist that the quality of food served at our hotel is comparable with the quality of food served by some of the leading names of Karachi. As a policy, at times we may forego part of our profit, but would never compromise on quality. That is one of the reasons that every year in Ramadan the number of guests remains very high. We also have ample parking space which attracts the visitors.
PAGE: In your opinion what incentives should be offered to the hotel industry?
Akhtar Riaz: I believe hotel industry does not require incentives, but certainly require reduction in cost of doing business. Import of food items may be declared duty free and rates of taxes should also be reduced. The government should also work on projecting soft image of Pakistan and promoting tourism. It is encouraging that the law & order situation in the country has improved remarkably, but visa granting procedure should also be eased. If many other countries can issue visa on arrival, why can’t we also do the same.