Hotel Industry in Pakistan

Pakistan has recently emerged as an important investment destination for new hotel development. After a gap of almost five years, hotels in Pakistan are witnessing substantial increase in growth, both in terms of occupancy and average rate and this trend is expected to continue. Since Pakistan is on the rising curve of the trend cycle, hotels will show signs of better performance in yields through consistent occupancies and higher average rates.

The feasibility of new hotel development is determined by the relationship between replacement costs and existing values for hotels. Based on hotel value per room and the associated cost benefit ratio, the cities in Pakistan have been ranked. The rankings may be used as a measurement index and should enable investors to choose the city of development.

The hotel industry showed a growth of 9.7 percent in hotels and 9.5 percent in rooms over the year 2005-06. The average growth rate in Hotel Industry was 5.0 percent in hotel establishments and 3.5 percent in rooms during the last five years.

Sector Objectives

The sector objectives include:

(a) to enhance tourism activities, increase tourist arrivals, and make tourism an instrument for generating employment, alleviating poverty, and increasing foreign exchange earnings

(b) to promote affordable, accessible and enjoyable domestic tourism and cultural and sports festivals; tourism of the religious sites and old civilizations; and foreign tourism linked to regional tourism particularly among SAARC and ECO countries.

(c) to enhance coordination between public and private sectors and upgrade resources to ensure desired standards of quality service.