All 53 Parjatan hotels, restaurants, bars to go under PPP amid weak performance

Highlights:

• Bangladesh expanding tourism facilities through Public-Private Partnership investment model
• Hotel Shaibal redevelopment expected to attract around Tk3,000 crore investment
• Private investment aims to modernise ageing tourism assets and improve services
• Corporation's tourism facilities have generated weak financial returns for decades
• International consultants will prepare master plan, feasibility studies, and bidding documents
• Government prioritises sustainable, commercially viable tourism with community participation

The civil aviation and tourism ministry has launched an initiative to bring Bangladesh Parjatan Corporation's tourism facilities under the Public-Private Partnership (PPP) model, aiming to attract private investment, modernise ageing state-owned tourism assets, and reduce reliance on government funding.

The corporation currently operates 53 tourism establishments across the country, including hotels, motels, restaurants, bars, picnic spots, and tourist information centres.

Officials say many of the corporation's commercial establishments have generated weak financial returns for years, making it difficult to upgrade facilities through public financing alone.

Infograph: TBS

Financial records show that, up to FY2023-24, the corporation's commercial operations posted a cumulative pre-tax operating surplus of just Tk36.05 crore over more than five decades.

The first major project under the initiative will be Hotel Shaibal in Cox's Bazar, where the government plans to develop an international-standard integrated tourism complex on nearly 132 acres of government land.

Officials estimate the project could require an investment of around Tk3,000 crore.

Speaking to The Business Standard, State Minister for Civil Aviation and Tourism M Rashiduzzaman Millat said, "Several hotels and tourism facilities under the Parjatan Corporation have been operating at a loss for a long time. Considering this reality, we have decided to gradually bring them under the Public-Private Partnership model.

"The process of appointing consultants for several projects has already progressed."

He noted that the government's objective extends beyond reducing financial losses.

"We want to utilise private sector efficiency, modern management, and investment to upgrade these tourism facilities to international standards. At the same time, we want to ensure that the government receives revenue through revenue-sharing arrangements and that these establishments become financially sustainable," he said.

Officials expect the PPP model to attract fresh domestic and foreign investment, improve visitor services, and create commercially viable tourism destinations while reducing the government's development expenditure.

The initiative reflects a broader policy shift towards greater private sector participation in tourism development.

On Monday, during a review meeting on projects under the Annual Development Programme for FY2026-27, the tourism ministry instructed officials to prioritise PPP-based projects instead of relying solely on direct government financing.

Speaking at the meeting, Millat said future development projects should be implemented through PPP wherever feasible and aligned with the government's development priorities.

Civil Aviation and Tourism Minister Afroza Khanam directed officials to prepare projects with long-term commercial viability while ensuring meaningful participation by local communities.

Shaibal set for integrated tourism complex

Located at the end of Motel Road in Cox's Bazar, Hotel Shaibal was established between 1982 and 1985. Surrounded by greenery and freshwater ponds, it is one of the government's largest tourism properties.

Parjatan Corporation General Manager (Planning) Md Ziaul Haque Howlader said the Shaibal project aims to create far more than a renovated hotel.

"The objective is not simply to renovate an existing hotel. We want to develop an international-standard tourism complex that increases government revenue while allowing investors to earn attractive returns," he told TBS.

The proposed development includes water villas, luxury cottages, international-standard hotels, food courts offering continental and fusion cuisine, gaming zones, children's parks, amusement parks, a 3D cineplex, shopping arcades, and facilities showcasing Bangladesh's cultural heritage.

According to Parjatan officials, prospective investors will receive comprehensive engineering designs, financial models, and commercial assessments rather than undeveloped land.

"We cannot simply tell investors to come and invest. They need detailed master plans, engineering drawings, feasibility studies, internal rate of return (IRR), benefit-cost analysis, and accurate cost estimates before making investment decisions," Howlader said.

He added that if the project ultimately requires Tk2,000-3,000 crore in investment, that estimate must be supported by detailed designs, cost estimates, and financial analysis rather than preliminary projections.

International consultants shortlisted

To prepare the project documents, the PPP Authority has shortlisted seven international consulting firms from the United Kingdom, France, Spain and India. 

Requests for proposals have already been issued, and officials expect to appoint a consultant after completing the evaluation process.

The selected consultant will prepare the project's master plan, conceptual design, feasibility study, investment model, and bidding documents before the government invites private investors.

Officials said the consultant will also produce detailed land-use plans, identifying suitable development zones while preserving environmentally sensitive areas.

Howlader said protecting Hotel Shaibal's natural ecosystem is a key condition of the project.

Unlike much of Cox's Bazar's coastline, which is affected by saline water, the Shaibal property contains freshwater ponds that will be preserved.

"No water bodies will be filled. Development will take place while preserving the natural environment and greenery," he said, adding that the feasibility study will determine which existing structures should be renovated and which should be redeveloped.

The Shaibal project forms part of the government's integrated master plan for Cox's Bazar, which seeks to transform the district into a modern tourism hub through sustainable tourism, smart city development, improved infrastructure and better connectivity.

Officials said the master plan will also cover other Parjatan Corporation properties, including Hotel Probal, Hotel Laboni and additional government-owned land in the coastal district.

Howlader said foreign investors have already expressed interest in beachfront tourism developments in Cox's Bazar.

Weak financial returns behind policy shift

The move towards PPP comes as the corporation's commercial establishments continue to generate limited financial returns despite recovering from the disruption caused by the Covid-19 pandemic.

According to financial statements, the corporation's hotels, motels, restaurants and other commercial establishments recorded a pre-tax operating surplus of Tk24.04 lakh in FY2023-24, following surpluses of Tk20.25 lakh in FY2022-23 and Tk9.95 lakh in FY2021-22.

As these figures are calculated before taxes and other adjustments, the corporation's actual net earnings are considerably lower.

During the pandemic, the corporation's operational units recorded a pre-tax operating loss of Tk1,961.52 lakh in FY2019-20 before gradually returning to surplus as tourism activity resumed.

Financial records also show that between FY1972-73 and FY2023-24, the corporation's commercial establishments generated cumulative income of Tk2,301.84 crore against expenditure of Tk2,265.80 crore.