Govt-Intercon deal signing this month

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Ismail Hossain The government is going to sign an agreement with the leading international hotel chain, Intercontinental, within this month to manage and operate Ruposhi Bangla Hotel, said an official. "The date for signing the agreement has not yet been fixed, but it is sure that the signing is going to take place within this month (October)," Assistant Manager (Communication) of Ruposhi Bangla Hotel Zia Mohiuddin told the FE Sunday. The civil aviation and tourism ministry and the state-owned Bangladesh Services Ltd (BSL) are now working on the terms and conditions of the deal which include issues like renovating the hotel without shutting it down, retaining all the present BSL employees and the cost of renovation, another official said. The tourism ministry has already approved the appointment of Intercontinental for management and operation of the hotel. BSL has recently signed a letter of intent (LoI) with the Intercontinental. BSL, owner of the hotel, has agreed to the major terms and conditions. Initially the would-be authority decided to name the hotel as Intercontinental Ruposhi Bangla. A BSL source said Intercontinental will start operating the hotel from the next month and will use its logo. The hotel chain will add Ruposhi Bangla to its Global Distribution System that will allow the hotel to be connected with the international connectivity of the chain and take reservation from other Intercontinental hotels and resorts. Initially, the deal will be effective for 30 years and can be extended depending on performance, with each expansion period spanning five years. Intercontinental ran the state-owned hotel before Sheraton took over its management in 1983. The present hotel employees are in fear that Intercontinental may shut down the hotel during renovation, and they may lose their jobs. One of the employees told the FE: "If the new authority shuts down the hotel during renovation, a few thousand people of our families will fall in trouble." Starwood Hotels and Resorts that operated under the brand name of Sheraton had a 25-year deal with BSL that expired on December 31, 2008. The company had since extended its contract nine times - each time for three months. Sheraton ended its operations in Bangladesh after a stay of 27 years. BSL took over operations and management of the hotel on May 1, 2011 and named it Ruposhi Bangla. Starwood had been pressing for a complete renovation of the hotel's rooms, kitchens, conference rooms, bathrooms, lobbies and bars since 2009. The estimated cost of such a refurbishment stood at US$ 20 million. Meanwhile, Ruposhi Bangla Hotel earned operating profit worth Tk 89 million (8.9 crore) in May this year, said a hotel official. Sheraton earned revenue of around Tk 1.02 billion in 2010, up from Tk 805 million in 2009.