Andrew Ashmore is a dynamic professional who started his career as a hotel receptionist and is currently working as the Chief Marketing Officer of Pakistan’s largest hotel chain. He has worked in the field of hospitality for the past 30 years. Ashmore speaks to IBEX about the potential of the hotel industry in Pakistan.
Hotel Industry of Pakistan – Challenges and Opportunities
I joined Hashoo Group in January 2015 when the market was stagnant. The situation is getting better now. Hotels are working between 65% and 70% occupancy which is healthy except for Peshawar region. I am very confident that we will get a high occupancy rate in next year for all 20 hotels of Hashoo Group including PC, Marriott and Hotel One.
The country is facing many challenges at the moment. The macroeconomic and investment climate are not very conducive as far as tourism and hospitality are concerned. There is a substantial downturn in the inflow of the tourists because of the security reasons. The law and order situation is the apparent cause. Most of the business community and the tourists are a bit reluctant to travel. The Hashoo Group’s hospitality division, against all odds, has been doing extremely well by shaping its policies according to the situation.
We are a leading chain of hotels in Pakistan. Avari, Serena and Ramada are our nearest competitors but we are the market leaders. We have 7 PC, 2 Marriott and 11 Hotel One’s. We are aiming for 25 hotels in near future. We will also be going overseas to expand our operations soon.
In 2013 and 2014 the market share of our hotels has been around 60 percent, which in the current situation is a big achievement. The presence of our nine 5-star, international standard hotels in all the major cities of Pakistan at the perfect locations makes us the first choice for guests. At the moment, we do not have any challenging competitor as we are the largest, oldest and the leading chain of hotels in Pakistan, offering excellent international standards of quality products and services.
Hashoo Hotels have the largest number of hotels in Pakistan with 20 hotels and another ¾ in the pipeline. They are the largest hotel employer and also the preferred employer, with some wonderful properties.
Business Generation Factors
Apparently, rooms’ occupancy is the major factor however, banqueting, food & beverage are also responsible for healthy business generation. There are other areas as well, which helps in generating revenue, such as our top class health clubs, laundry and dry cleaning etc. Ambiance, impeccable security, services and products are additional attractions for the guests.
Regions of Pakistan and profitability
Islamabad, Lahore and Karachi have the best numbers in terms of revenue. PC Lahore is our number one hotel in terms of number of rooms and revenue. We also have 3 Hotel one’s in Lahore as it’s an important market.
Pakistan is a hub of serendipity and a country full of natural features to attract visitors. We mainly focus on the guests who visit places for business and tourism purposes, and that is why besides Bhurban, Muzaffarabad, Gwadar, we have presence in all the cosmopolitan cities of Pakistan. Additional projects are the upcoming Zaver Pearl Continental- Hayatabad Peshawar, Pearl Continental Mirpur and Pearl Continental Multan.
Improving the industry
Improving tourism in Pakistan is the back bone for hotel industry. Bringing tourists to Pakistan can help the hotel industry. We need to have ministry of tourism and culture at government level. We need an active tourism office to work with partners like PC, Avari and Serena. We need to make more effort other than what Pakistan Tourism Development Corporation (PTDC) is doing. We also want to work with tour operators of Pakistan and PIA. We need to brand Pakistan in international markets to bring in more tourists.
We also need to improve our VISA policy for foreigners to promote tourism in Pakistan. We need to have road shows in UK, Europe and Western markets to promote Pakistan. The potential for tourism is present in Pakistan, we need to create awareness among corporates and business community for arranging conferences and group sessions in different areas to promote tourism internally.
There is always room for improvement, especially when it comes to hospitality industry. As the hotel industry contributes quite a significant portion to the country’s economy, healthy measures need to be exercised to prevent it from descent. It is worth mentioning that this industry is instrumental in bringing in foreign exchange. The Pakistan Hotel Association is the representative body of the hospitality industry and accounts for around 90 percent of the total inventory of gazette hotels’ occupancy in Pakistan. In addition to hotels’ own efforts to promote business, the PHA is also responsible for the growth of its member properties. However, security issues need to be addressed on urgent basis as nothing can function if the law and order situation is not appropriate.
Pakistan Hotel Indsutry VS Global Industry
To be honest, the macro and micro economic environment. These are the factors which give rise or results in the downturn of hospitality business. If the situation becomes ideal for tourism and business opportunities amid impeccable security, this industry is bound to transcend. I suppose the factors makes the difference.
Potential for New Hotels
There are couple of big hotels opening in Islamabad, Lahore and other areas but no international hotel chain would be easily willing to come to Pakistan because of security situation. If you go to tripadvisor.com and enter any Pakistani hotel, you will get a security alert which is damaging the tourism industry of Pakistan as people become reluctant to travel to Pakistan. Ground realities in Pakistan are completely different and it is not what is being projected by the media.
Pakistan is famous for cultural diversity, mountain ranges, four seasons, world’s largest glaciers outside polar region, sports, music etc. Despite the fall in external inflows because of the law and order situation, the business community still gives immense importance to Pakistan by considering it an investment destination. Some of the top multinational businesses are operating in Pakistan, a testimony that global business community foresees enormous opportunities in the country. We also anticipate great future of Pakistan and that is why we are in the process of expansion.
Opening a Hotel
One thing you should be clear while opening a hotel or guest house is that there will be no profitability for couple of years, it is a long term game. Pakistani consumers have changed and now they expect good service. Maintain your standards all the time. Sales people should be able to sell properly in new manners.
Other factors include location, airlift and business potential. It is imperative to carry out market research and surveys before practically opening a hotel. However, prior to that the famous 4 Ps of marketing (Product, Price, Placement, Promotion) should properly be looked into. This will enable the management to understand the demographics, guests’ needs, demands and preferences, culture to determine their attitudes and concerns, competitors, and about the promotional channels.
Potential and advice for new entrants
Yes, there is quite a provision for small hotels or guest houses in other words. Our group while realizing the demands and needs of the guests, who prefer budget-friendly hotels offering classic hospitality, introduced Hotel One, currently operating in Lahore, Sialkot, Multan, Bahawalpur, Murree and Faisalabad.
We are trying to improve sales and marketing strategies to improve the numbers. A new website is coming online soon, we are arranging sales training and improving systems to advance customer service. We are already getting huge business and if we improve our sales and marketing strategy, we can get dramatic increase in our revenues. By modernizing our systems, we can get 5% to 10% more occupancy easily.
We have 3 PCs under construction, one in Hayatabad Peshawar, one in Mirpur and one in Multan. Multan is the market we should look in future as it has ample potential. We need to look internationally and hopefully gain the global recognition of Hotels.
Pakistan hotel industry future
It depends on the overall political and security environment of Pakistan. We need to have more airlines coming to Pakistan. A big airline enters Pakistan and everyone else will start coming in. If the security situation continuously improves for the next 5 years, more airlines and business will start coming in. Pakistan has massive potential for tourism and hospitality. According to recent report by Goldman, Pakistan is in the top 10 growing countries for coming years.
Pakistan is a gateway to the Middle East, Central Asia, China, and rest of South Asia and is known all over the world for tourism, trade and investment. Tourism visitors are attracted to places like the northern areas, Azad Kashmir, archeological sites etc. Traders have their own interests and preferences and would opt for regions that suit their businesses, There are plenty of such places in Pakistan. We are very optimistic that the disturbances in the country will soon come to an end and this wonderful country will return to normalcy. Once people regain confidence, you will see a lot of foreign and local investors jumping in to grab the business opportunities, which will ultimately result in the growth of hotel industry in this country. Secondly, if the law and order improves, and you get just one big airline like KLM or Lufthansa, then the rest will automatically follow.