Dhaka luxury hotel market faces tougher competition as guest demand evolves

Dhaka : Dhaka's upscale hotel sector is facing a more unpredictable business environment as new international properties increase competition while corporate travel remains under pressure, according to Md Al Amin, General Manager of Renaissance Dhaka Gulshan Hotel.

Al Amin said 2025 was particularly challenging for the city's hospitality industry, with political uncertainty, a slower economy and reduced foreign arrivals weighing on occupancy. Many five-star hotels require occupancy of roughly 50 percent to 60 percent for stable operations, while some properties saw business fall significantly below expectations.

Md Al Amin

Despite the difficult environment, Renaissance Dhaka Gulshan has continued to improve its occupancy and expand its market exposure. Al Amin noted that Dhaka's branded hotel supply has increased by about 30 percent since 2018, making growth in market share more significant as competition intensifies.

Corporate travel remains the foundation

Renaissance Dhaka Gulshan continues to rely heavily on corporate travelers because of its location in one of the capital's key business districts.

Al Amin added commercial demand remains the largest source of room nights across Dhaka, while leisure demand is relatively limited because the city functions primarily as a business and diplomatic center.

However, the hotel is working to diversify its customer base by targeting expatriates, diplomats, international visitors, domestic leisure travelers and social events.

Corporate clients have also become more cautious about spending. A decline in international projects entering Bangladesh has softened foreign business travel, while companies are paying closer attention to accommodation costs.

Al Amin expects corporate demand to recover as economic and political conditions stabilize.

F&B becomes major revenue driver

Food and beverage has become a particularly important component of the hotel's business, accounting for close to half of its revenue alongside rooms.

Al Amin noted the contribution is significantly higher than the typical 25 percent to 33 percent share seen at many upper-upscale and luxury hotels globally.

The hotel is seeing stronger interest in healthier dining, including lighter menus, greater ingredient transparency and nutrition-focused choices. Demand comes not only from hotel guests but also from local customers who visit its restaurants, banquet facilities and other F&B outlets.

MICE offers potential, growth remains gradual

Meetings, weddings and corporate and social events remain steady contributors to the property's business.

Al Amin expressed Dhaka has the venues, connectivity and experience needed to host major international events, but the city's MICE sector remains largely untapped.

Rather than expecting a dramatic near-term transformation, he sees MICE as a dependable business segment that can grow gradually alongside the broader hospitality market.

Rising costs put pressure on margins

Higher food, energy and labor costs are creating challenges for hotels across Dhaka. Al Amin said Renaissance is managing those pressures through close cost control while avoiding cuts that could affect guest experience.

The hotel is also relying on brand strength to protect pricing rather than competing primarily through discounts.

Despite cost increases, he said F&B revenues have generally grown faster than costs, helping margins remain stable or improve slightly.

More competition could expand market

The arrival of additional international hotel brands is expected to intensify competition, but Al Amin views the trend as broadly positive.

New properties can raise Dhaka's profile as a business and hospitality destination while encouraging existing hotels to improve their products and services.

For Renaissance, differentiation will increasingly come from personalized service, guest recognition and the combination of Marriott's global technology platform with local hospitality.

Personalization, wellness shape future

Premium travelers are increasingly seeking personalized experiences and wellness throughout their stay rather than treating them as optional extras.

Al Amin said Renaissance is responding with more tailored guest services, health-focused dining and technology designed to anticipate customer needs while maintaining human interaction.

Looking ahead three to five years, he re-mains optimistic about Bang-ladesh's hospitality sector. Renaissance Dhaka Gulshan plans to strengthen personalization, wellness and F&B while expanding beyond its corporate base.

Al Amin concluded Bangladesh still has considerable room for hospitality growth, and the hotel aims to help lead that expansion rather than simply follow the market.