Dhaka's luxury hotel market resilient but below potential

Dhaka : Dhaka's luxury hotel market remains resilient despite weaker corporate travel, lower international arrivals and reduced event activity, but demand has yet to return to its full potential, according to Dibakar Dominic Desouza, General Manager of Pan Pacific Sonargaon Dhaka.

Talking to The Bangladesh Monitor, Desouza said the market has undergone a significant shift over the past year, with hotels becoming less dependent on international corporate travelers and increasingly relying on domestic corporate business, social events, conferences and food and beverage operations.

"The traditional dependence on international corporate travelers became less reliable, while domestic corporate business, social events, conferences and F&B became increasingly important revenue drivers," he added.

He mentioned the shift has required hotels to diversify their sources of revenue while maintaining international service standards despite softer occupancy and rising operating costs.

Demand shifts as int'l  travel softens

Corporate and business travelers remain a core segment for Pan Pacific Sonargaon because of its proximity to Dhaka's business district, ministries and government institutions. However, corporate travel has been softer than in previous years.

Diplomatic and government-related business continues to be strategically important, with the hotel hosting diplomatic meetings, official functions and government events.

International travelers also remain an important segment, although their numbers declined during 2025 amid political uncertainty and weaker international arrivals. International cricket and football teams have helped offset some of the decline.

Domestic guests, events gain importance

Domestic leisure and social business have become increasingly important for the hotel, with local guests contributing to food and beverage revenue, staycations, celebrations and weekend business.

Desouza identified MICE, weddings and large-scale events as one of Sonargaon's major competitive strengths. The hotel currently has eight meeting venues and can accommodate events of up to 2,500 people.

"Large-scale events are extremely important to Pan Pacific Sonargaon because they contribute not only banquet revenue, but also rooms, F&B, meetings, and ancillary spending," he claimed.

He added that events have become an important stabilizing segment at a time when international room demand remains relatively soft.

Heritage meets modern luxury

As more international hotel brands enter Dhaka, Desouza said Sonargaon plans to compete by combining its heritage with a contemporary guest experience.

He expressed the hotel's strategy is to "protect the heritage, modernize the experience," through continued improvements to rooms, public areas, food and beverage concepts, technology and service standards.

Dibakar Dominic Desouza

The hotel also plans to differentiate itself through personalized service, while strengthening its position in the MICE and events market.

Desouza said its restaurants, bars and culinary programs should increasingly become destinations for Dhaka residents rather than relying primarily on hotel guests.

He described the desired positioning as "Dhaka's iconic luxury hotel, reimagined for today."

Rising costs put pressure on five-star hotels

Rising operating costs and softer occupancy are creating challenges for luxury hotels, according to Desouza.

He noted the sector's biggest challenge is balancing cost discipline with the need to maintain international five-star service standards.

Dhaka's expanding luxury hotel supply is another concern. While the city has the potential to support additional international brands, Desouza said the market cannot comfortably absorb unlimited new supply unless demand grows alongside it.

"The issue is not simply the number of hotels; it is the pace at which new rooms are being added compared with the growth in corporate travel, international arrivals and major events," he also mentioned.

Guests seek personalization, wellness

Guest expectations are also changing, with luxury increasingly being defined by convenience, wellness, technology, sustainability and personalized service rather than simply room quality or a prestigious address.

Desouza said these trends are particularly visible among younger corporate travelers, international visitors and affluent domestic customers.

International tourism remains important to Sonargaon, particularly because international guests can generate higher room and F&B spending and longer stays. However, he said international business travelers, diplomats, expatriates and MICE guests are currently equally important to the city hotel.

New investments in pipeline

Pan Pacific Sonargaon is planning selective investments to strengthen its competitiveness, including property renovations, new dining concepts, upgraded wellness facilities and expanded event capabilities.

The hotel is also exploring the possibility of operating its own airport lounge at the new Terminal Three of Hazrat Shahjalal International Airport, potentially extending the Sonargaon experience beyond the hotel.

Cautious optimism for Dhaka hospitality

Looking ahead three to five years, Desouza said he is cautiously optimistic about Dhaka's hospitality sector.

He expects the market to become more competitive, with additional international brands, increasingly sophisticated guests and greater pressure on hotels to distinguish themselves.

For Pan Pacific Sonargaon, he concluded, those changes represent an opportunity to build on the property's heritage while offering a more modern and dynamic luxury experience.