US Ramada Plaza to franchise brand name
March 28, 2008
KARACHI: American hotel chain Ramada Plaza, has agreed to franchise its brand name to Karachi Airport Hotel, which up until last month, was run by the management of European market leader Accor, The News learnt on Thursday.
Mercure, one of the brands of Accor, was running the managerial affairs of the airport hotel opened in March 2007, as part of a Civil Aviation Authority (CAA) drive to utilise its commercial estates effectively.
In February last, Accor, which has over 4,000 hotels and other brands like Sofitel and Novatel around the world, announced the annulment of its contract with local United International Group (UIG), which owns the airport hotel property, without citing any reasons.
Ideally located at a few minutes drive from Jinnah International Airport Terminal in the security limits of CAA, Grand Mercure Karachi International Hotel was the first well-known foreign brand to come to Pakistan in the past many years. “We will file a lawsuit against Accor in Pakistan,” said M Azeem Qureshi, Director Operations at UIG. “They have violated terms of the agreement whereby Mercure was supposed to run the management till its replacement was found.”
Deliberating on reasons behind Accor’s rollback, he said hotel operator believed that UIG was not letting its management work by questioning its performance. “(Grand Mercure) management had failed to meet revenue target, and expenditures crossed initial estimate as well,” he said reflecting on the cause of disagreement, and added that this forced UIG to seek an explanation. “I think that offended them.”
Qureshi said UIG will use Ramada Plaza’s franchise while retaining existing human resource as part of the management. Notwithstanding the swift change in managements of Karachi Airport Hotel, the hotel industry in Pakistan is poised to see a lot of growth in the coming years, provided that the security situation improves, people associated with hospitability business say.
Hashoo Group, which runs Pearl Continental and Marriot hotels in Pakistan, has already announced the introduction of a new network of budget hotels across the country, in a bid to target the booming middle class that is looking for better standards of hospitality.
Lack of good hotels is believed to have impeded tourism growth in the country, which is blessed with diversified cultures, beautiful scenery and historical sites. Tariq Bin Yousif, General Manager of Destination of the World, an international tour facilitator, regretted that a lot of potential remains unexploited because of insufficient number of resorts. Citing Karachi as a case, he said more than a quarter million picnickers throng the seaside every weekend, and have to use the shabby huts in the absence of a hotel.
Chairman Pakistan Hotels Association Mustansir Zakir said there was a wide room for hotel business to expand here since the country had only 10-15 international quality hotels. However, he said government assistance in terms of right policy decisions was necessary. He said 8-10 per cent bed tax in addition to a 15pc sales tax, has artificially taken up the room rent, making hotels an expensive proposition. “Bed tax is charged on basis of capacity available in a hotel,” he said, adding the tax should be collected on basis of actual utilization of capacity. “We would really want the new government to waive bed tax, at least now."
Mercure, one of the brands of Accor, was running the managerial affairs of the airport hotel opened in March 2007, as part of a Civil Aviation Authority (CAA) drive to utilise its commercial estates effectively.
In February last, Accor, which has over 4,000 hotels and other brands like Sofitel and Novatel around the world, announced the annulment of its contract with local United International Group (UIG), which owns the airport hotel property, without citing any reasons.
Ideally located at a few minutes drive from Jinnah International Airport Terminal in the security limits of CAA, Grand Mercure Karachi International Hotel was the first well-known foreign brand to come to Pakistan in the past many years. “We will file a lawsuit against Accor in Pakistan,” said M Azeem Qureshi, Director Operations at UIG. “They have violated terms of the agreement whereby Mercure was supposed to run the management till its replacement was found.”
Deliberating on reasons behind Accor’s rollback, he said hotel operator believed that UIG was not letting its management work by questioning its performance. “(Grand Mercure) management had failed to meet revenue target, and expenditures crossed initial estimate as well,” he said reflecting on the cause of disagreement, and added that this forced UIG to seek an explanation. “I think that offended them.”
Qureshi said UIG will use Ramada Plaza’s franchise while retaining existing human resource as part of the management. Notwithstanding the swift change in managements of Karachi Airport Hotel, the hotel industry in Pakistan is poised to see a lot of growth in the coming years, provided that the security situation improves, people associated with hospitability business say.
Hashoo Group, which runs Pearl Continental and Marriot hotels in Pakistan, has already announced the introduction of a new network of budget hotels across the country, in a bid to target the booming middle class that is looking for better standards of hospitality.
Lack of good hotels is believed to have impeded tourism growth in the country, which is blessed with diversified cultures, beautiful scenery and historical sites. Tariq Bin Yousif, General Manager of Destination of the World, an international tour facilitator, regretted that a lot of potential remains unexploited because of insufficient number of resorts. Citing Karachi as a case, he said more than a quarter million picnickers throng the seaside every weekend, and have to use the shabby huts in the absence of a hotel.
Chairman Pakistan Hotels Association Mustansir Zakir said there was a wide room for hotel business to expand here since the country had only 10-15 international quality hotels. However, he said government assistance in terms of right policy decisions was necessary. He said 8-10 per cent bed tax in addition to a 15pc sales tax, has artificially taken up the room rent, making hotels an expensive proposition. “Bed tax is charged on basis of capacity available in a hotel,” he said, adding the tax should be collected on basis of actual utilization of capacity. “We would really want the new government to waive bed tax, at least now."
