Domestic tourism to feed on long holidays

The Daily Star, 15 August 2012

For most of Ramadan, Khurshid Alam Suman has been planning a trip to Srimangal with family and friends for the long holidays.

“If people want to get away from the humdrum of everyday lives, it is economical to travel within the country,” Suman said, adding that he and his wife try to save up enough to fund a trip every year.

This year, he booked two cottages — at Tk 1,700 and Tk 1,000 per night — at the Nishorgo Eco Resort for four nights.

Suman, a merchandiser at a multinational company, however, is not alone in seeking a quiet getaway during Eid, the country’s biggest religious festival, with the number of domestic tourists during this period growing every year.

This year, people will get a vacation stretching 10 days — ideal for a mini break outside the city. And all the hotels, motels, resorts, guesthouses are fully prepared to handle the rush of visitors.

Thanks to its beach and hillocks, Cox’s Bazar looks to be the destination of choice once again, with most of its hotels and resorts having been fully booked in advance, according to industry insiders.

Motel Shoibal, the biggest motel of Bangladesh Parjatan Corporation in Cox’s Bazar, is completely booked for the four days following Eid.

“We are fully booked because of the long Eid holiday. Many of our guests will enjoy their Eid here, but the majority of occupants will reach after the Eid day,” said Sujit Barua, general manager of the motel.

The tourist flow, mainly ‘family vacationers’ like Suman, will continue for 8-10 days after Eid, according to Barua.

However, he mentioned rough weather, which may spoil the holidays for beach lovers to some extent.

There are around 200 hotels, motels and guesthouses in Cox’s Bazar, ranging from five-star to budget accommodation.

Seagull, a five-star hotel in Cox’s Bazar, is fully booked for the entire week after Eid, said Masud Rabbani, the hotel’s manager-in-charge.

Besides Cox’s Bazar, Tangail, Sylhet, Rangamati, Kuakata, Bandarban and St Martin’s Island are also popular among the domestic travellers.

For travellers wanting to be near the city and still have a quiet time-off, there are resorts near Tangail.

ANM Shahjahan, project manager of the Jamuna Resort near Tangail, said the occupancy at the 110-room resort is full until August 25, with the bulk of the crowd arriving after the Eid day.

“We provide accommodations with leisure activities such as swimming, football, cricket, tennis, boating, cinema and picnics,” he said.

A two day-one night stay at the resort costs Tk 4,200, and Tk 7,500 for three days-two nights, said Shahjahan.

The package includes a welcome drink, mineral water at room, fruit basket, buffet breakfast, lunch and dinner, swimming pool use, entry to Riverside Park and Ananda Park.

Padma Resort on the banks the Padma river, where a night’s stay at one of the 16 cottages cost Tk 3,500, has had an 100 percent advance booking as well.

“The occupancy is full for four days after the Eid day,” said Mohammad Ali, owner of the resort.

Apart from the sea and riverside getaways, hilly Sylhet, too, has also been attracting a good number of tourists, like Suman and his loved ones.

Nazim Gahr, built on a hillock in Sylhet, is already full from August 21 to the end of the month, said Nazim Farhan Choudhury, owner of the resort.

A night’s stay at one of the resort’s 50 rooms cost Tk 8,000, he said.

The amenities, however, have not developed in line with the demand and accommodation facilities, many travellers complained.

“We wanted to start on August 21, but could not manage train’s tickets. So with a two years-old child we just could not be desperate backpackers,” Suman said.

Industry insiders estimate that around five lakh people travel inside the country a year, which is growing at an annual rate of 15 percent.

In 2011, the travel and tourism sector accounted for Tk 18,250 crore, or 2.2 percent, of Bangladesh’s gross domestic product, the World Travel and Tourism Council said in a report.

Bangladesh: Flourishing Market and Investment Climate

Introduction

Bangladesh, a country with mass population and limited land area, may not be considered as a rich country but its economy is changing gradually. Income level of people both in urban and rural area is shifting to upward level in some extent. Change of its economy is evident by considering the country’s outlook in capital and even district areas. People are also getting familiar with hi-tech equipments and fashionable materials. As a result market growth as well as world market leader’s interest for more investment is also increasing remarkably.

Change of People’s Life Style (Newspaper report also reflect the fact)

Change of Bangladeshi people’s life style is evident from facts evident around us. It can be noted that the number of mobile phone subscribers recorded a significant increase of 1.103 million in January (2012) last reaching the total to 86.558 million in the country¹.(Official figure on March 2011 was 72.8 million⁸) These mobile phone users definitely use mobile sets and many of them frequently change phone sets after some interval- which reflects the size of market of mobile set in the country. Due to improvement of purchasing power of this country’s middle class people, sell of expensive, hi-tech and fashionable sets is getting higher.

Transport use is also getting higher day bay day. From 2003 to June 2010, about 220,000 motor cars, jeeps and micro-buses were registered with Bangladesh Road Transport Authority (BRTA) in Dhaka. Fast rising fuel cost, grid-locked roads and import duties could not limit the number of privately owned vehicles despite the government’s implicit discouragement toward private transport sector².

To book an expensive venue for social or cultural program someone need to book the venue at least three to four month before.

Now in Eid vacation it is difficult to find airline ticket to visit tourist spots, business purpose or for emergency need around the country.

Multi storied shopping malls are growing urban cities to upazillas. Many people come from outside districts to expensive markets on Eid season for marketing.

Remittance flow to the country touched 10 billion dollar in fiscal year 2009-10 and in 2010-11 it reached to 10,987.4 million dollar which is 13.4 percent higher than previous year. According to world remittance Data base, position of Bangladesh was 8^th and in 2011 (predicted by Migration and remittance Fact book 2011) it came to 7^th position⁷. This remittance flow is strengthening purchasing power of people of this country.

Although officially the number of people with greater than Tk.10 million wealth has been reported at 13,000 plus, the real number is estimated to be much larger. The flourishing number of private schools, private universities, private medical facilities, expensive restaurants and parlors all support the assumption².

The market size is remarkably big also. Statistics show that 30 million people make up the middle income bracket; this is more than the population of Sweden, Norway, and Denmark combined³. Atiur Rahman, the governor of the Bangladesh Bank, told in an interview with foreign television Al Jazeera, “In a decade or so we will be one of the 30 largest economies of the world, and one should keep that in mind. It is not the size of the country that matters, it’s the population and it’s a very entrepreneurial population, and there lies our strength.” Despite only one per cent direct foreign investment, the country’s GDP is growing more than six per cent a year. The rising middle class is investing heavily in the stock market and in domestic businesses. It is they who are behind the economic growth³.

Impact on Hospitality Industry 

The economic growth and people’s life style is also evident from the growth of tourism and hospitality industry. The capital’s hospitality industry has almost doubled in size and earnings over the last four years [2004 to 2007]. The luxury hotels in Dhaka have earned Tk 1.18 billion revenue as room rent in calendar year 2007 while it was Tk 577.29 million four years back in 2004¹⁰. Foreign businessmen, ready-made garment buyers in particular, have contributed to the growth of the hospitality industry. Optimistic ideas says that the hospitality industry in Bangladesh will flourish further in the coming days as the country’s economy is growing fast with the increased flow of tourists and businessmen to the country.

Improvement on Health Consciousness

Due to the rise of middle class as well as improvement on health consciousness people is getting careful on quality of health and medicine. Which is directly and indirectly improving Pharmaceutical industrial sector.  In this regard, quality of products, packaging on medicine are also improving. So that total sell is also growing.

Potential segment of the pharma market is now 130 billion US dollars. Presently, a good number of local firms meet 97 per cent of the demand of the local market that stood at Taka 7,000 crore. Export earnings from pharmaceuticals totalled $44.27 million in the last fiscal surpassing $ 40.97 million earned in 2009-10 fiscal, Export Promotion Bureau (EPB) data shows ¹².

In an interview with a news paper General Secretary of Bangladesh Oushod Shilpo Somity said 5 percent GDP growth helps the pharma industry grow at 15 percent, and 6 percent and 7 percent growth makes it 20 percent and 25 percent respectively ¹³.

Investment by Market Giants

On Automobile Industry

The attractiveness of Bangladesh market may be not largely pronounced in many countries but even though companies with huge investment are considering seriously to get in and its not only for trading but also for manufacturing. Newspaper report shows interest of market leaders like Mitsubishi Motors is interested to assembling project in the country. There we saw- Mr. Osamu Masuko, global president of Mitsubishi Motors visited Bangladesh on February, last year (2011); on his visit he strongly mentioned “It is an easy target to sell 200,000 units of (sedan) a year in the next five to 10 years, considering the country’s population size and growing economy”⁴. These are defiantly encouraging news for investment climate of the country.

Due to rappid market growth and also having potential manpower market leaders are considering for technology transfer to the country. Which was also reflected from the statement of Mr. Osamu Masuko, global president of Mitsubishi Motors. It need to be noted that Mitsubishi Motors explained Hyundai Motor, a Korean automaker, that has become a global player due to transfer of technology. But it took 39 years for to transfer technology. Mr. Mauko thinks, for the case of Bangladesh it may take only 10 to 15 years for the same task and it is just because of lot of potential in the automobile sector with its huge number of educated young people of Bangladesh⁴.

Similar investment news has been learned from Intraco-Hindustan motors company, who invested $10 million to build an assembly plant in Savar to assemble 5,000 cars on first two years⁵.

It need to be mentioned that presently, Bangladesh’s annual car market is around 30,000 units, dominated by reconditioned Japanese cars⁴. It automatically explains the huge opportunity of investment for Japanese automobile industry in the country.

Giant local and foreign Motor cycle industries including Walton, Runner are also expanding manufacturing of motor bike factory in the country. Honda is on the process to set up their factory soon in Tongi area.

Expanded Electronic Market

Due to the rise of middle class people consumption of electronic product has also increased, which is also evident by steps of famous companies’ steps. We have seen the news that ACI Limited plans to set up a plant in Bangladesh to assemble Panasonic-branded products after embarking on electronics business with distributorship of the Japanese company’s audiovisual items¹¹.

The company [ACI] had projected to sell 5,600 pieces of Panasonic audiovisual products worth Tk 128 million in the first year [after 2009], which will be 2.5 percent value share of the audiovisual product market².The product profile comprises colour television, flat panel television (LCD and Plasma), DVD home theatre, DVD player, mini hi-fi system, digital still camera and video camera¹¹. Among the product profile, liquid crystal display (LCD) and plasma-televisions are premium products that targeted high-end customers, corporate houses and hotels and motels. The company’s target is not only selling the premium products, but also regular or common items for middle income group to upper level¹¹.

ACI Consumer Brands, a strategic business unit of ACI, has already sold four 50’’ plasma televisions each at Tk 3.82 lakh, eight 42’’ plasma televisions each at Tk 2.30 lakh and eight 42’’ LCD televisions each at Tk 1.51 lakh¹¹.

( It need to be noted that the company is superior in manufacturing television with hi-definition plasma and LCD).

It need to be noted that Colour television is the biggest segment of the Tk 1,330 crore electronics market, with 15 percent annual growth, according to industry sources. Around 400,000 television sets worth Tk 440 crore were sold in 2008¹¹.

News paper reports expressed that among the television brands, Chinese Konka is the top player with 21 percent market share, followed by TCL with 18 percent, Singer with 12 percent, LG with 11.25 percent and Samsung with 10 percent in 2009¹¹. So that it is a place where many Japanese industries can easily come with investment to expand their business.

Electronic Industry for Home Appliance

News also published about intention of World famous electronic company LG-Butterfly’s plan for investment of $500 million to assemble electronics products in Bangladesh⁶. It is likely that the company will start assembling refrigerator in first stage and gradually produce other electronic items including television, microwave oven, air-conditioner, washing machine and other home appliances at their factory at Bhaluka in Mymensingh. The factory will be able to create job opportunity for 5000 people⁶.

Investment by domestic investors was recorded as 8,806 crore taka in 2001-02 which increased to 17,117.49 crore taka in 2008-09 fiscal year, it increased to 27,413.69 crore taka in 2009-10 and finally on nine month of 2010-11 it improved to 39,976.41 crore taka. At the same time direct foreign investment and joint venture investment with foreign companies’ record shows in 2007-08 it was 4,356.99 crore taka which increased to 14,457.72 crore taka in 2008-09 and finally on nine month of 2010-11 it increased to 26,519.37 crore taka⁹.

If investment climate continuously move with this positive trend than automatically lot of supporting industry, technology improvement, business environment will develop in this country.

^{1. Financial Express, March 26, 2012}

^{2. The Daily star, November 12, 2010}

^{3. Aljazeera news, http://www.aljazeera.com/video/asia/2011/09/20119411515723874.html}

^{4. The Daily star, February 10, 2011}

^{5. The Daily Star, November 20, 2011}

^{6. The Daily Star, December 16, 2011}

^{7. Bangladesh Economic Review 2011.}

^{8. Bangladesh Economic Review 2011,  p-218.}

^{9.Bangladesh Economic Review 2011, p-207 to210.}

^{10.  Financial Express, November 1, 2008; http://www.thefinancialexpressbd.com/more.php?page=detail_news&date=2008-11-01&news_id=49576}

^{11. The Daily Star, April 21, 2009; http://www.thedailystar.net/newDesign/news-details.php?nid=84890}

^{12. http://bangladesheconomy.wordpress.com/category/pharmaceutical-industryhealthcare/}

^{13.  The Daily Star, January 16, 2011; http://www.thedailystar.net/newDesign/news-details.php?nid=170187}

Bangladesh economy not weak: Barakat‘Middle class has immense potential for industrialisation’

Daily sun, July 20 2012

The country’s emerging middle class has immense potential to help accelerate industrialisation in the country, noted economist Prof Abul Barkat said here on Thursday.

He said the middle class can play a splendid role in expanding the domestic consumer market, especially for the durable industrial products.

“We’ve the bottom of the pyramid – the poor – and on top of the pyramid – the rich, in between the middle class which is emerging in this country,” Barkat, also the President of Bangladesh Economic Association (BEA), said while addressing a seminar, titled ‘Strong Potential of Domestic Consumer Market and Future Challenges of Strategic Industries in Bangladesh.’

He said the country’s growing middle class has enormous power of consumption and with this spending the domestic market size can be expanded further resulting in increased real investment, employment, productivity and savings.

On economy, Prof Barakat said, “Bangladesh isn’t a weak economy rather it’s a stable economy. Forex reserve in the last 40 years increased by 40 times while remittance by 540 times. So this isn’t a weak economy.”

He said the real remittance inflow would be US$ 24 billion though the official figure shows US$ 12 billion. “The equivalent amount to official figure comes through Hundi, not through banking channel.”

Japan International Cooperation Agency (Jica), Mitsubishi UFJ Research and Consulting Company Ltd, World Business Associates Company Limited and Human Development Research Center jointly arranged the seminar in cooperation with the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) and Japan External Trade Organisation (Jetro).

Additional Secretary of Industries Ministry ABM Khorshed Alam spoke as the chief guest in the inaugural session.

Acting FBCCI president M Jashim Uddin and Deputy Director, South Asia Division, Jica Ishizuka Kenji, among others, addressed the seminar.

Khorshed urged the local entrepreneurs to give attention to the development of domestic industrialisation to cut import dependence. “We didn’t give enough importance to our domestic market and industry…that’s why our domestic market is dominated by imported products,” he said.

He suggested the businesspeople to import raw materials instead of finished products to help generate employments and reduce import-bill burden. —UNB