KARACHI, March 26: Hotel business in the country is staring into an abyss as fears emanating from war drives away more and more of their customers. Over the last 15 days room occupancy in Pakistani hotels has declined to 25-30 per cent from 50-60 per cent. Hoteliers fear that the occupancy rate would further plunge in case the US-led war in Iraq prolongs.

Top hotels in Karachi have started receiving cancellation of booking orders for room occupancy for the current month and even for April soon after the US invasion of Iraq. Even holding of functions with foreign guests have slowed down due to war jitters.

“We are now experiencing a 25-35 per cent occupancy rate as compared to 50-60 per cent. Business scenario looks quite bleak for the hotel industry in case the war prolongs,” executive director, Hashoo Group of Industries, Mansoor Akbar Ali, told Dawn on Wednesday. The group manages the chain of five Pearl Continental Hotels and two Mariott Hotels across the country.

Leading hotels have witnessed a swift business after the restoration of political government at the end of last year, but the business boom proved to be short-lived.

“An average of five per cent foreigners are now staying in the country’s top hotels as compared to 40-60 per cent in normal days,” he said. Foreigners’ presence in top hotels varies city wise. In normal days — hotels of Karachi witness 40 per cent foreigners and 60 per cent locals, while hotels in Islamabad attract 60-65 per cent foreigners and the rest local visitors. Lahore hotels enjoy presence of 50-50 per cent foreigners and locals.

Mr Mansoor, an ex-chairman of Pakistan Hotels Association, said that leading hotels had started offering discount on room occupancy. “We are offering Rs2,400 for an average deluxe room these days in order to attract customers as compared Rs3,000 during the same period of 2002,” he added.

In some hotels the discount rate has been offered at 70 per cent as compared to last year. Leading hotels usually attract visitors from the US, the UK, France, China, the Far Eastern countries, Germany and the UAE.

The US-Iraq war has also seriously affected the arrival of foreigners at the city’s tourist department. To some extent, local tourists have also now restricted their movements to the country’s favourite tourist spots, particularly in Northern areas and Indus Valley Civilization.

“We have not marked the presence of any foreign tourists (not a single foreigner) in our department after the US attack on Iraq,” manager south, Tourist Information Department of Pakistan Tourism Development Corporation (PTDC), Riaz Hassan Khan, told Dawn, adding that even local tourists have now become a bit reluctant after severe tension owing to ongoing war.

After the end of military rule, tourism activities have picked up pace and as many as 10-11 foreigners were marking their presence at the TIC in a day, “which has now come to a nil”.

—- “Around 10 domestic tourists are contacting the TIC currently as compared to pre-war period of 50-60 tourists a day. Both Pakistani and foreign tourists (belonging to Germany, Japan, France, Britain and America) usually throng the northern areas, Karakoram Highway, Hunza, Skardu, Indus Valley Civilization, Taxila, Moenjodaro, Ghandhara civilization, etc.

“We have not been receiving any enquiries or e-mails for these main tourist destinations from any foreigners, particularly from the Americans for the peak tourist season, starting from June to August since the Iraq has been invaded by the US,” he said.

Ex-chairman of PHA and owner of Salatin Hotel in Saddar area, said the room occupancy had dropped to 20-25 per cent as compared to 40-45 per cent as local entrepreneurs, tourists and people from interior Sindh are not turning up owing to war fear.

Both Pakistani hotels and tourism activities have been facing fluctuating fortunes soon after the 9/11 incidents followed by the US air strikes on Afghanistan on October 7, 2001 and December 13, 2001 incident at the Parliament in New Delhi, when room occupancy in leading hotels plunged to 20-25 per cent from 60 per cent followed by phenomenal drop of tourist arrival to Karachi.

Hotel business returned to normalcy from January 2002, both in terms of room occupancy and holding of functions, when foreigners as well as tourists started arriving.

The war in the Gulf has also started affecting sales of travel agents. Convener, Bonding Committee of Travel Agents Association of Pakistan (TAAP), Mohammad Yahya Polani, said ticket sales (for America and Europe) had been crawling at 25 per cent as against 50 per cent in normal days. He said people are avoiding to visit America, particularly after introduction of strict immigration rules.

However, ticket sales through domestic travellers have yet to feel the pinch of Iraq war panic. He said business of travel agents had improved after general elections, but currently it was up to that level. He said the business of travel agents would hit the bottom rock in case foreign airlines suspended operation in Pakistan due to war.

Ex-chief of PHA, Mansoor Akbar Ali said the hotel industry was paying around 30 types to taxes to various government departments and currently it was at the verge of collapse.

He said the hotel industry had been fighting with the provincial government for the removal of bed tax, which was not justified when 15 per cent general sales tax was already there on all products and services being offered by the hotels. He added the government should come out with a package on the pattern of Indian, which had offered various concessions to hotel industry in the budget 2003-04.