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Tourism under chokehold of high living costs

Arifur Rahman Rabbi
10 Apr 2023 00:00:00 | Update: 10 Apr 2023 19:54:55
Tourism under chokehold of high living costs
The file photo shows a bird’s eye view of the Saint Martin Island, one of the top tourist destinations in Bangladesh – Shamsul Haque Ripon

People – especially those who work their fingers to the bone on a daily basis – look forward to Eid holidays every year, so that they can take some time off from their busy lives, and go on a trip to exotic locations with their near and dear ones.

This holiday trend, a tremendous boost to the tourism industries of both home and abroad, was booming before the Covid-19 crisis. After a steep drop, the industry had begun to recover last year as travel restrictions began to ease.

But just when things were looking up, the USD shortage and skyrocketing inflation put Bangladesh’s economy under a lot of pressure. This in turn put a major dent on the people’s wallets and savings, raising fears that tourism during the Eid holidays could decline significantly.

Industry insiders – especially owners of hotels, resorts, restaurants and travel agencies – say even though two weeks of Ramadan have already passed, they are yet to receive an adequate number of advance bookings from holidaymakers despite offering up to 30 per cent discounts.

They expressed concerns that high inflation, increasing prices of daily commodities, fewer days of holidays for Eid-ul-Fitr, and the SSC exams scheduled in April will lead to fewer tourists at hotspots during this Eid.

Speaking to The Business Post, Tourism Developers Association of Bangladesh President Syed Habib Ali said, “Tourism in our country means the people make plans after covering all their household expenses. “In the process, inflation is having an impact on tourism as the prices of daily commodities have gone up. The hotel, resort, transport and other related expenses have increased due to inflation.”

He continued, “So, a tourist’s rent or expenses have to go up as well. This in turn has pushed tourists’ expenses. Considering the overall situation, we think that the number of tourists will drop by 20 per cent to 30 per cent compared year-on-year,” Ali added.

According to the Bangladesh Bureau of Statistics, inflation reached a maximum of 9 per cent in August and September last year. After that, the cost of living has increased significantly compared to before, although it has decreased slightly in recent times.

A recent study by the Centre for Policy Dialogue (CPD) showed that in February this year, Dhaka city residents’ food consumption alone increased by 25 per cent compared to the same period last year.

On the other hand, SANEM, another research institute, said that in the six months from September last year to February this year, the cost of living in cities and villages increased by an average of 14 per cent compared to the previous six months.

Tour Operator Association of Bangladesh President Shiblul Azam Koreshi said, “This Eid is out of the tourism season. The SSC exam is coming up as well. Apart from this, we fear that tourism will naturally decrease due to higher commodity prices and inflation.

“On the other hand, due to the increase in dollar exchange rate and air fares, the tendency to go abroad will also decrease.”

He added, “Tour operators determine the cost of the tour packages keeping in mind various factors (air ticket, local package, transportation, local or internal air ticket of the area, food).

“We can see that all types of expenses have increased by about 20 per cent to 25 per cent. As the package prices go higher than the consumer capacity, there will be an impact in this tourism sector.”

Tourism industry insiders said around 10 lakh people travelled to domestic tourist hotspots during Eid-ul-Fitr holidays last year after overcoming the pandemic’s impacts. Many people have travelled not only across the country, but also overseas as well.

Providing more details about this sector, Koreshi said, “Bangladesh has a Tk 1,500 crore tourism industry, and around 15 per cent to 20 per cent of our earnings come during Eid-ul-Fitr holidays. But this may not be the case during this Eid.”

The airlines say due to the increase in air fares, the number of foreign vacation trips may drop by half compared year-on-year.

US-Bangla Airlines General Manager of Marketing Support and Public Relations Kamrul Islam said, “Because of the increase in the USD exchange rate, there will be some impact on foreign travel. Because the entire cost abroad has to be done in USD.

“So the tourist has to make adjustments. A tourist, who planned to stay for 5 to 7 days on a trip, may readjust their costs by limiting it to 3 to 4 days.”

This time, the country’s tourists are interested in Cox’s Bazar, Chittagong Hill Tracts, Kuakata and Sylhet, as St Martin Island is closed during the Eid season. Some tourists are also planning on visiting Kolkata, Shimla, and Manali in India, and Nepal, Bhutan, Maldives, Malaysia, and Thailand.

Abul Kashem Shikder, secretary of Federation of Tourism Services Association of Bangladesh said, “There are fewer tourists in Cox’s Bazar during the month of Ramadan. Twenty per cent of our rooms have been booked so far.

The hospitality industry here is yet to gain momentum centring on the Eid holidays.

Mingthan Jaoa Lusai alias Jary, secretary of Cottage Malik Somitee of Sajek, pointed out, “Despite the recent increase in commodity prices, we have not hiked the hotel rent. We may have to increase food prices slightly, but a decision in this regard has not been made yet.

“We do not have many tourists here at the moment.”

Both of them said the inflow of tourists this season will be better understood after the 20th Ramadan. They also believe that the rise in commodity prices will have an impact on the tourism sector this year.

Dhaka University’s Tourism and Hospitality Management Department Chairman Dr Santus Kumar Deb said, “Due to the increase in accommodation costs and other costs this year, the cost of tourism packages will increase by 20 to 25 per cent compared to last year.

“In that case they will reduce the amount of time in the tour plan. The tendency to travel for a long time like last year may be a little less this year.”

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