InterContinental owner posts nine straight years of losses

State-owned Bangladesh Services Limited, the owner of InterContinental Dhaka, has suffered losses for nine consecutive years. 

In the fiscal 2023-24, the company – listed on the capital market in 1984 – reported a loss of Tk78 crore and did not declare any dividends for its shareholders. 

By the end of FY24, its accumulated losses had surged to around Tk700 crore, and it has not paid a dividend since FY14, according to a stock exchange filing. 

Its share price has remained stagnant at Tk5.20, far below the face value, for years on the Dhaka Stock Exchange, as the government holds 99.68% of the company's shares, leaving only a small portion owned by general shareholders. 

The losing trend continued into the first quarter of the current fiscal year, with the company recording a loss of Tk30 crore. As of September, its loss per share stood at Tk3.06. 

Following a revaluation of its assets, the net asset value (NAV) increased by Tk2,734 crore, raising the NAV per share to Tk225.20 in the first quarter. This represents a significant improvement compared to the same quarter of the previous year, when the NAV per share was a negative Tk54.42. 

A senior company official, speaking on condition of anonymity, said heavy spending on renovations and the less-than-ideal location of the five-star hotel have contributed to the significant financial losses of Bangladesh Services. 

According to the company's financial report, Tk732 crore was spent on renovating the hotel, funded by a long-term loan of Tk573 crore from Agrani Bank. The loan amount, including interest and non-current liabilities, has now ballooned to around Tk1,000 crore. 

The senior official said the hotel's location, around 15 kilometres from Hazrat Shahjalal International Airport, has deterred many foreign guests, especially as several luxury hotels have been established in more convenient locations. 

He emphasised that the distance, compounded by traffic congestion, has significantly affected the company's ability to attract international visitors. As a result, the hotel has been unable to generate sufficient revenue to cover its rising costs, he added. 

In 2014, the company recorded a profit of Tk3.21 crore before temporarily closing its hotel services for renovations. However, since then, it has been operating at a loss. 

The hotel services resumed in December 2018 following renovations, and the property was rebranded as InterContinental Dhaka under the management of the InterContinental Hotel Group.

Previously, the hotel was managed by the company itself and was known as Ruposhi Bangla Hotel. 

Bangladesh Services also operates the Balaka Executive Lounge at Hazrat Shahjalal International Airport, the BSL Office Complex adjacent to the InterContinental, and the Bangabandhu International Convention Centre (BICC). 

On 21 January of this year, Bangladesh Services handed over the BICC to the Public Works Department (PWD) following the expiration of its lease contract. 

The company had leased the BICC for 10 years, with the agreement expiring on 30 June 2022. Since then, it continued managing the facility under a mutual understanding with the PWD, sharing 80% of the net rent earned from BICC venues. 

After the lease expired, the PWD issued a tender to lease out the venues.