Westin Dhaka sees selective recovery in luxury hotel demand

Dhaka : Dhaka's luxury hotel market is showing signs of stabilization after a period of softer international and corporate demand, but competition and pressure on value remain high, according to Gary Farstad, General Manager of The Westin Dhaka.

Talking to The Bangladesh Monitor in an exclusive interview, Farstad said the market remains resilient, with Dhaka's position as a commercial center providing a strong foundation for long-term growth. However, demand has not recovered evenly across all customer segments. Hotels are increasingly having to balance rate protection with stronger value propositions as corporate clients scrutinize spending and international travel patterns remain uneven.

At The Westin Dhaka, the hotel has responded by strengthening corporate and diplomatic relationships, expanding dining and events revenue and maintaining a focus on service quality. Farstad mentioned the property is also seeing a broader customer mix, with domestic guests playing a larger role in dining, weddings, celebrations, weekend stays and wellness experiences.

Gary Farstad

Corporate travel returns selectively

Corporate travelers, multinational executives, diplomats, development-sector professionals and international project teams continue to form the hotel's core customer base. However, corporate travel is returning selectively, with companies placing greater emphasis on value, transparency and measurable outcomes.

According to Farstad, business stays are often shorter, while corporate approvals and negotiated agreements are being reviewed more carefully. The hotel is therefore focusing on flexible offerings while maintaining the security, service and quality standards expected from an international luxury property.

Domestic demand, meanwhile, has become increasingly important. Although leisure remains smaller than business travel, Farstad expressed, more Bangladeshi consumers are seeking premium experiences closer to home, creating opportunities for hotels beyond traditional room business.

MICE remains key revenue driver

Meetings, conferences, weddings and social events continue to be an important part of The Westin Dhaka's business. Farstad claimed Dhaka's MICE market is evolving, with clients seeking shorter planning cycles, greater value, customized concepts, technology and seamless execution.

Corporate clients are increasingly looking for efficient and outcome-focused meetings, while wedding and social-event customers are demanding more distinctive and personalized experiences.

The hotel sees an opportunity to combine flexible event design, creative menus and consistent operational delivery to capture the changing demand.

Wellness gaining importance

Wellness is also becoming a more significant part of the hotel experience, particularly among domestic customers. Farstad added guests are increasingly interested in fitness, healthier food, quality sleep and restorative stays rather than viewing wellness simply as an occasional luxury.

The Westin's global "Eat Well, Move Well and Sleep Well" philosophy provides a framework for responding to these changing expectations. The hotel is looking to make wellness more relevant through healthier local food choices, fitness activities and room experiences while allowing guests to balance wellbeing with indulgence.

Rising costs put pressure on operations

Farstad identified rising food, energy and labor costs as major operational challenges for luxury hotels. Maintaining international standards requires continued investment in employees, utilities, maintenance, technology, safety and imported products.

The Westin Dhaka is addressing the pressure through tighter purchasing controls, menu engineering, energy efficiency, preventive maintenance and productivity improvements. Farstad noted profitability cannot be protected simply by cutting quality and instead requires more efficient operations.

New hotel supply to intensify competition

Dhaka's expanding hotel supply is expected to make the market even more competitive as international brands enter different price segments.

Farstad also mentioned additional supply could strengthen Dhaka's profile as a business and tourism destination, but room growth needs to be accompanied by stronger demand generation. He pointed to the need for a more supportive investment and tourism environment, including improved infrastructure, easier business processes and greater development of entertainment, cultural and heritage attractions.

Westin plans phased upgrades

The Westin Dhaka is planning investments focused on both its physical facilities and guest experience. These include phased revitalization of guest rooms and the lobby, mechanical and life-safety upgrades, technology improvements and refreshed restaurant and meeting spaces.

The hotel is also investing in preventive maintenance, employee development, sustainability and the use of guest feedback to improve service.

Looking ahead three to five years, Farstad expects Dhaka's luxury hospitality sector to become broader, more sophisticated and increasingly competitive. He said The Westin Dhaka will focus on product renewal, wellness, culinary offerings and personalized service to maintain its position.

He also stressed that hotels alone cannot build a tourism destination. According to Farstad, Dhaka's full potential will depend on coordinated public- and private-sector efforts to improve access, infrastructure, destination marketing, heritage preservation and the overall business environment.