Friday, November 12, 2010

Bomb blast hurts hotel industry in Karachi

KARACHI: Leading hotels in the city fear a drastic drop in room occupancy due to the recent bomb blast at CID office in the red zone area of the financial hub of the country in which at least 20 people were killed and more than 140 were injured.

People affiliated with hotel industry said that the blast at CID office would have severe impact on the entire hotel industry in the next couple of months. "The blast has definitely frightened foreigners as well as the local businessmen, but so far no massive checkouts have been reported especially from the foreigners," they added.

A spokesman from Pakistan Hotels Association (PHA) said that the room occupancy had been low between 30-45 percent in Karachi and upcountry for the last six months in the backdrop of political uncertainty, security situation in tribal areas and incidents of suicide attacks. "The room occupancy is likely to come down below 20 percent in the next 15-20 days especially in Karachi hotels," he fears.

"Foreigners will definitely fly back to their homes after the cancellation and postponement of various events and conferences due to the blast," he said.

It is important to mention that the deadly blast took place in an area that is considered red zone. From the spot where blast took place in an area of 1 to 2 kilometers almost three 5-star hotels are located, CM House besides this American embassy is also located around the area.

He said that that the prevailing uncertainty at political level, bad law and order situation have changed the people reaction and style, which has affected the hotel industry in the country in the last one or two years. "Now a great number of confirmed reservations for Karachi hotels have been cancelled, resulting in a decline in room occupancy." He said that the short-term impact was severe, with daily cancellation from overseas visitors. "The current impact is yet to be calculated — but industry-wise — it will be substantial and is assumed that the fallout will be high," she added.

The official of a leading hotel said that room occupancy has been its at low and will likely drop by 40-50 percent due to deadly blast. She said that many groups of foreigners had postponed their reservation (not cancelled) and they were expected to reconfirm the date of their arrival after Eid.

"I think the foreigners will cancel or restrict travelling to Pakistan in upcoming months after this incident," she said, adding that it would depend on the law and order situation in the coming days. She said that under the current scenario almost all the hotels in major cities of Pakistan have been affected.

Usually, foreigners' presence in the hotels used to range between 20-22 percent before a year or two, but for the last six to eight months, their presence has come down to only one to two percent. The industry has been surviving on the domestic businessmen and travelers, he added.

The hotel industry has been very highly sensitive to incidents such as terrorism and law and order situation in which foreigners not only restrict their visits to the country, but also domestic travelers exercise caution.

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