Govt opens financial offer for Sheraton bid early May
Tuesday, 28 April 2009
A Z M Anas
Bangladesh is bucking for attracting global chains to run upscale hotel Dhaka Sheraton as it opens the financial offers for the management contract early next month.
But a top official said the government would not ditch talks with Starwood, the parent of Sheraton chain, as part of its intention to retain the present operator of the country's oldest five-star hotel.
"The financial offer by two technically qualified bidders-Golden Tulip and Ramada Plaza-will be opened in the first week of May," Civil Aviation and Tourism Secretary Hedayetullah Al Mamun said.
"We have legal obligation not to abandon the bidding process. But that should not be seen as the step to suspend talks with the Starwood authorities. We're in a listening mode," Mr Mamun, who also heads Sheraton's owning company BSL, said.
The financial offers by the two hotel chains were supposed to be opened on April 04, but the BSL authorities suspended it on the ground of death of its chairman.
Dhaka Sheraton, a wholly government-owned hotel, has been managed by Starwood Hotels and Resorts Worldwide since 1984 under the brand name of Sheraton chain. But its 25-year contract ended in December last year, prompting the hotel owner to search for new operator.
BSL floated international tenders twice to find a suitable company for managing Dhaka Sheraton. It received six offers in the second round of bidding and asked the Swiss hotel chain Golden Tulip and Ramada Plaza to submit financial offers after concluding technical evaluation.
Mr Mamun said that his company would evaluate the best offer, if any, by the two hotel chains.
"Our objective is to find the best offer for the hotel and also the national interest," he added.
BSL officials said a sharp disagreement between BSL and Sheraton authorities over the process of renovation of the hotel prompted the government to invite international tender for operator selection.
Sheraton proposed to close down the hotel for two years and go for massive refurbishment at a cost of Tk 2.0 billion.
By contrast, BSL wanted to get the renovation work done in phases and keep the costs within Tk 800 million, not the amount quoted by the hotel authorities.
Sheraton has already managed to obtain extension of the contract for three months to June this year, Civil Aviation and Tourism Ministry officials said.
Opponents of Starwood's further appointment say if the global chain is inducted again, it would "divert businesses to a new 5-star hotel," imperiling Sheraton's existence.
Starwood, which operates hotel businesses across the world under nine brands including Sheraton and Westin, has a business deal and equity stakes in a new five-star hotel, Westin Dhaka, persons who closely followed Bangladesh's booming hospitality sector, said.
"We're taken aback that Starwood signed a deal with a private 5-star hotel to manage under the brand name of Westin," a long-time hospitality veteran, said, asking not to be named. "This is a conflicting business interest."
"Nowhere in the world, other than same owners, one company operates two hotels within the same city and within less than eight kilometres distance," he added.
But supporters of Starwood say Golden Tulip has racked up whopping losses in most of its global operations while Ramada has no experience in running a five-star hotel.
Golden Tulip, which runs nearly 800 hotels in 50 countries, and Turkish chain Ramada Plaza became technically qualified, outbidding four contenders.
Sheraton's business suffered a serious blow as it faced stiff competition from newer rivals, notably Westin and Radisson.
Bangladesh is bucking for attracting global chains to run upscale hotel Dhaka Sheraton as it opens the financial offers for the management contract early next month.
But a top official said the government would not ditch talks with Starwood, the parent of Sheraton chain, as part of its intention to retain the present operator of the country's oldest five-star hotel.
"The financial offer by two technically qualified bidders-Golden Tulip and Ramada Plaza-will be opened in the first week of May," Civil Aviation and Tourism Secretary Hedayetullah Al Mamun said.
"We have legal obligation not to abandon the bidding process. But that should not be seen as the step to suspend talks with the Starwood authorities. We're in a listening mode," Mr Mamun, who also heads Sheraton's owning company BSL, said.
The financial offers by the two hotel chains were supposed to be opened on April 04, but the BSL authorities suspended it on the ground of death of its chairman.
Dhaka Sheraton, a wholly government-owned hotel, has been managed by Starwood Hotels and Resorts Worldwide since 1984 under the brand name of Sheraton chain. But its 25-year contract ended in December last year, prompting the hotel owner to search for new operator.
BSL floated international tenders twice to find a suitable company for managing Dhaka Sheraton. It received six offers in the second round of bidding and asked the Swiss hotel chain Golden Tulip and Ramada Plaza to submit financial offers after concluding technical evaluation.
Mr Mamun said that his company would evaluate the best offer, if any, by the two hotel chains.
"Our objective is to find the best offer for the hotel and also the national interest," he added.
BSL officials said a sharp disagreement between BSL and Sheraton authorities over the process of renovation of the hotel prompted the government to invite international tender for operator selection.
Sheraton proposed to close down the hotel for two years and go for massive refurbishment at a cost of Tk 2.0 billion.
By contrast, BSL wanted to get the renovation work done in phases and keep the costs within Tk 800 million, not the amount quoted by the hotel authorities.
Sheraton has already managed to obtain extension of the contract for three months to June this year, Civil Aviation and Tourism Ministry officials said.
Opponents of Starwood's further appointment say if the global chain is inducted again, it would "divert businesses to a new 5-star hotel," imperiling Sheraton's existence.
Starwood, which operates hotel businesses across the world under nine brands including Sheraton and Westin, has a business deal and equity stakes in a new five-star hotel, Westin Dhaka, persons who closely followed Bangladesh's booming hospitality sector, said.
"We're taken aback that Starwood signed a deal with a private 5-star hotel to manage under the brand name of Westin," a long-time hospitality veteran, said, asking not to be named. "This is a conflicting business interest."
"Nowhere in the world, other than same owners, one company operates two hotels within the same city and within less than eight kilometres distance," he added.
But supporters of Starwood say Golden Tulip has racked up whopping losses in most of its global operations while Ramada has no experience in running a five-star hotel.
Golden Tulip, which runs nearly 800 hotels in 50 countries, and Turkish chain Ramada Plaza became technically qualified, outbidding four contenders.
Sheraton's business suffered a serious blow as it faced stiff competition from newer rivals, notably Westin and Radisson.