Case on P-C hotel Karachi

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Case Study





On




Pearl Continental P-C Hotel Karachi














Case on P-C hotel Karachi




1. PAKISTAN`S HOTEL INDUSTRY - AN OVERVIEW

The hotel and restaurant industry is very popular in Pakistan. Chains oI hotels are not the only or
even the primary source oI Iood in most cities oI Pakistan but also many regional and local
chains have developed around the main cities oI Pakistan to compete with international chains
and provide services that appeal to the unique regional tastes and habits at comparatively low
costs.

1.1 Highlights

The Pakistani hotel industry is metro dependent, as 75 to 80 per cent oI the revenues oI top hotel
chains come Irom the Iive metros. Marriott, Sheraton and Pearl Continental are the most
proIitable hotel markets currently. The hotel industry is heavily taxed. Expenditure tax, luxury
tax and sales tax inIlate the hotel bill by over 30 per cent. The eIIective tax in Southeast Asian
countries works out to only 4 to 5 per cent. As these taxes are the domain oI the state
governments, the rates vary accordingly.

The average room rate (ARR) and occupancy are the two most critical Iactors that determine the
proIitability. ARR, in turn, depends on location, brand image, star rating, quality oI Iacilities and
services oIIered and the seasonal Iactor. In the long term, the hotel industry in Pakistan has a
latent potential Ior growth. This is because Pakistan is an ideal destination Ior tourists as it is the
only country with the most diverse topography. Pakistan attracts approximately 1.5 million
tourists every year that is just 0.4 per cent oI the world tourist arrivals.

















Case on P-C hotel Karachi



2. MARKET PROFILE


The industry can be classiIied into Iour segments:


2.1) 5 Stars and 5 Star Deluxe:

The premium Iive star segment alone accounts Ior 30 per cent oI the total rooms available in the
country. These are mainly situated in the business districts oI metro cities and cater to business
travelers and Ioreign tourists. These are considered to be very expensive

2.2) Heritage Hotels:

These have come into limelight on account oI their lesser capital expenditure and aIIordability.
Heritage hotels include running hotels in palaces, castles, Iorts, hunting lodges, houses that were
built prior to 1950. The Heritage Hotel concept has been riveting attention oI many tourists as
well. Heritage hotels mirror the traditional way oI liIe in the region, which has proved to be a
major selling point Ior these hotels.


2.3) Budget Hotels:

Liberalization oI the economy led to the emergence oI a new breed oI middle class with higher
disposable income. This class is steadily rising and, thus, unleashing the potential oI budget
hotels. This growing class no longer believes in saving their extra income. Budget hotels
especially cater to domestic travelers who Iavor reasonably priced accommodations with limited
luxury. Special seasonal oIIers, low and good services are spearheads oI this segment.

2.4) Unclassified:

These are low-priced motels spread throughout the country. A low-pricing policy is their only
selling point. However, these also came into prominence on account oI increase in the tourist
traIIic. Being a rather unorganized segment, it comprises oI about 19 per cent oI the industry.









Case on P-C hotel Karachi



3. MARKET TRENDS

With the demand curve in the metros stagnating, smaller towns have emerged as potential
growth areas. Luxury, leisure and heritage hotels are concentrated in tourist circuits like Karachi,
Lahore, Islamabad and Muree. ProIitability in the hotel Industry is dependent on many Iactors; a
Iew salient ones are listed below:

3.1 Tourism:

This is the primary Iactor Ior the hotel industry. Pakistan has great potential oI becoming a major
stop Ior tourists. However, lack oI inIrastructure has kept the Ioreign tourist at bay. The
government has been actively participating in propagating Pakistan as an oasis Ior global
travelers. Pakistan has always conjured up a Iascinating image in the mind oI Ioreign tourists.
Pakistan has an advantage oI having diverse cultures, languages and religions, which makes it an
exciting tourist destination Ior people all over the world.

3.2 Seasonality:

Pakistan being a tropical nation witnesses an inIlow oI leisure tourists, mainly during the winter
months oI October to March. Hence the hotel industry has a better second halI. In the Iirst halI oI
the year, local tourists preIer April to May and October in the second halI due to summer and Eid
vacations respectively. Other months being oII-season periods, many hotels oIIer heavy
discounts on room tariII to ensure repeat customers such as corporate, airline crewmembers and
tour groups.

3.3 Industry bottlenecks:

Progress oI the industry is held hostage to various bottlenecks existing within the industry like
high variable costs. The hotel industry is reeling under high variable expenses. A high wage bill,
maintenance costs and overhead expenses mark the industry. Domestic hotel chains have a high
man-room ratio as compared to their overseas counterpart.

3.4 Differential pricing:

Hotels in Pakistan typically oIIer discounts on published room tariIIs to many clients. As a
result, though the occupancy rate oI these hotels increases, the ARR does not increase
proportionally. However, the magnitude oI discounts varies depending on the nature oI the client
location and size oI the hotel. Furthermore, in the dual tariII rate system, there is a domestic
currency rate Ior local travelers and a dollar rate applying to Ioreign travelers. Hence there is
need oI a common yardstick Ior tariII.





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4. OVERVIEW OF HASHOO GROUP

Hashoo Group oI Companies was established under the leadership oI Mr. Sadruddin Hashwani.
In a period oI some three decades he through his single handed dedication and commitment to
the ProIession has transIormed this Group in to a leading industrial group oI Pakistan, well
known Ior its Iorward-looking approach, and highest standards oI quality and integrity.

Starting with Cotton Trading, Hashoo Group oI Companies today boasts the only chain oI Five-
Star Hotels in Pakistan namely The Pearl Continental Hotels chain, the Marriott Hotels with
presence in all the provincial capitals and the Federal Capital except one.

The Group is constantly on its Iorward march. Some examples oI it are: The construction oI
Pearl Continental Hotel Bhurban in the picturesque Murree hills, Construction oI new wing
called Atrium Wing oI The Pearl Continental Hotel Lahore equipped with the most modern
amenities, Continual up gradation and modernization oI Pearl Continental Hotels and Islamabad
as well as Karachi Marriott Hotels, Acquisitions oI the state-oI-the-art Ceramics Factory to
design and produce crockery and a plant known as Gel caps to manuIacture halal gelatin
capsules Ior the pharmaceutical industry according to the most stringent quality standards.

4.1 Hashoo Group Role in PC-Hotels
Owing to the vision oI its Iounder, Mr. Sadruddin Hashwani, Hashoo Group oI Companies is a
preeminent player in hospitality industry in Pakistan. Since its inception in 1972, it has oIIered
its valued guests warm hospitality, impeccable service and unparalleled Iacilities promising a
memorable experience. Strategically situated at prime locations, the hotels cater to the business
and leisure needs oI local and international market. The Group`s commitment to excellence,
attention to details and personalized services ensures a loyal guest list. The task to manage the
hospitality interests oI the Group led to the Iormation oI two companies:

4.1.1 Hashwani Hotels Limited (HHL)
4.1.2 Pakistan Services Limited (PSL)

4.1.1 Hashwani Hotels Limited (HHL)
The current owner and operator oI Marriott Hotels in Karachi and Islamabad, HHL originally
started its hotel operations in 1978, under a Iranchise agreement with Bass European
Netherlands, with the opening oI Holiday Inn Islamabad Iollowed by Holiday Inn Karachi in
1981. The Iranchise agreement granted by Marriott World Wide Corporation USA in 1992
marked a notable achievement, as it was the Iirst time in the history oI Marriott Corporation that
hotel outside oI Marriot`s direct Management were granted a Iranchise to operate under the
Marriott brand. Originally incorporated in 1972 as a private limited company, HHL was later
converted to a Public Limited Company in 1974.



Case on P-C hotel Karachi



4.1.2 Pakistan Services Limited (PSL)
Originally a Public Limited Company, Pakistan Services Limited was incorporated in 1995 and
quoted on the Karachi Stock Exchange Irom 1964 until it was acquired by the Hashoo Group oI
Companies in 1985. Following the acquisition by PSL, the portIolio oI Iive hotels initially
operated under the management oI Inter Continental Hotels Group was re-branded as Pearl
Continental Hotels. In order to meet the growing demand, PSL completed and expansion
program oI Pearl Continental Hotel Lahore in 1996. The expansion comprised oI 300 additional
rooms, new atrium lobby, banquets and convention hall, enhanced sports and Iitness Iacilities
and shopping arcade. In 2001, PSL acquired the master Iranchise Ior Destination oI the World,
creating an augmentation to its well deIined position in tourism and hospitality sectors oI
Pakistan. The company Iloated its rated term Iinance certiIicates in November 2003 and
currently is in the process oI expanding its network in Pakistan and the GCC market.
www.pchotels.com


4.2 Others

Net21
Gel caps
Cera-e-Noor
Hashoo Foundation
Hashoo Holdings
Zaver mining Company
Zaver petroleum Corporation















Case on P-C hotel Karachi



5. PEARL CONTINENTAL HOTELS
5.1 Vision and Mission
5.1.1 Jision
We are committed to dynamic growth and service excellence built upon our heritage oI
traditional hospitality. We strive to consistently meet and surpass guests`, employees` and other
stakeholders` expectations. We Ieel pride in making eIIorts to position Pakistan in the IoreIront
oI the international arena.

5.1.2 Mission
Secrets to our sustained leadership in hospitality are Excellency and Dynamism through
oIIering competitive and innovative high quality value added services to our guests and business
partners. To meet the challenges oI modern business, we constantly upgrade our operations and
services in line with latest technological Iacilities. As a responsible corporate citizen,
maintaining the highest level oI governance, ethical standards and prudence. Keeping close
watch at socio-political environment to make use oI all available growth opportunities through
aggressive and proactive approach. Believe in strong and proIessional workIorce by providing
challenging and rewarding environment and equal respect to all through creating the sense oI
participation towards the success oI our vision.


5.2 Introduction To Pakistan Services Limited:
Pakistan Services Limited ("PSL") was incorporated in 1958 as a Public Limited Company and
is quoted on Karachi Stock Exchange since 1964. The primary business oI PSL is hospitality. It
initially operated under the management oI Inter Continental Hotel; however when Hashoo
Group acquired PSL in 1985 it changed the name oI the Hotels to Pearl Continental Hotels and
became the largest and oldest Iive star hotel chain oI Pakistan. Pearl Continental Hotels, beside
in-house reservation network, are also linked to have international exposure and overseas
reservation network.
Since takeover by the Hashoo Group, "seven Pearls" have undergone extensive renovation and
reIurbishment. New management concepts and intensive training programs have also been
introduced. Another prestigious "Pearl" has been added, at a picturesque hill resort operating as
Pearl Continental Hotel, Bhurban with the total cost oI over Rs. 550 million in 1990-91.
In 1996 Pakistan Services Limited completed a US$ 50 million expansion program oI Pearl
Continental Lahore in which IFC, CDC and DEG had invested about Rs. 1 billion through
Ioreign currency loan and equity. The expansion comprised oI 300 additional rooms, a new
atrium lobby, banquet and conventional hall, dining Iacilities, enhanced sport and Iitness
Iacilities, a new shopping arcade and a car parking structure. In 2001, PSL has acquired the
Iranchise oI "Destinations oI the world" Ior Pakistan region, creating an augmentation to its well
deIined and managed disposition in the tourism & hospitality sectors in Pakistan. The new
venture is designed to captivate and Iocus on in-bound and out-bound Consolidation and
Wholesales and is designed to introduce destinations to local tour operators, travel agencies and
direct corporate customers.

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5.3 Chain of Hotels
5.3.1 Pearl Continental Hotel, Karachi

Pearl Continental Hotel, Karachi is a member oI the 'Leading Hotels oI the World' and the
premier choice oI business and leisure travelers. The hotel is ideally located only IiIteen
kilometers away Irom the airport, situated in the heart oI the commercial centre. It provides
excellent business and conIerence Iacilities and easy access to shopping centers oI the city. The
300 comIortable and luxurious guestrooms and suites provide guests with all modern amenities.
The Executive Floor, with its exclusive ambience allows the businessmen to relax, unwind and
take a break Irom the mundane activities oI the day. Each room opens with an encoded key card
and has the added luxury oI a dedicated Butler, to attend to the guest's needs.

For a choice oI cuisine, the restaurants oIIer a variety oI Pakistani, Chinese, Japanese, Thai and
Continental specialties. Chandni-oIIering Pakistani Cuisine, Sakura (Japanese restaurant) and
"The Jason`s Steak House oIIer imported meat and sea Iood grilled exotically at lunch and
dinner, the rooItop restaurants, gives a glorious view oI the city by day and night, whereas,
Marco Polo the Ilagship restaurant Ior Iine dining experience while Demitasse and Grapevine Ior
snacks and beverages. Thai Restaurant "The Royal Elephant" oIIered mouth-watering traditional
Thai cuisine.

The Ballroom, Shalimar, Kohinoor, Mahnoor and picturesque pool oIIer ample space Ior
seminars, conIerences and wedding parties Ior up to 3000 guests. At the Health Club, guests can
enjoy a vigorous aerobic workout or relax in the Jacuzzi or steam bath. A temperature controlled
outdoor swimming pool, three air-conditioned squash courts and a tennis court is located on
premises Ior those who enjoy energetic exercise.
New Nortel (Meridian) digital telephone systems, the latest and most advance
telecommunication system has been installed at PCH-Karachi.

5.3.2 Pearl Continental Hotel, Lahore

In the city oI graceIul mosques, imposing Iortresses, and historic bazaars, Pearl Continental
Hotel, Lahore is located at the most prestigious Iinancial, business and commercial avenue,
Shahrah-e-Quaid-e-Azam.
The introduction oI the grandiose project, "The Atrium Wing", is the addition oI large banquet
Iacilities measuring up to 7600 sq. It. along with 300 Deluxe Rooms, including 28 Business
Suites and 2 Presidential suites, to the existing 200 room`s property. Expertise and luxuries have
been gathered Irom all over the world to make it a venue oI international business activities.
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Each room opens with an encoded key card and has the added luxury oI a dedicated Butler, to
attend to the guest's needs. The rooms are also Iully equipped with all modern gadgets such as
Data Port, Electronic in-room SaIe and a personal mini bar.


Bukhara is the hotel's specialty restaurant, renowned Ior its Iine barbecue delicacies and ethnic
atmosphere. Marco Polo is highly recommended Ior superb Pakistani and Continental dishes,
whereas Nadia Tea Lounge serves Tea menu and CoIIee. The Steak House located in Business
Club Ior steaks and a la carte, while Tai Pan is the place to sample regional Chinese dishes and a
state oI art Thai Restaurant Ior those who love Thai Iood. At Dumpukht Mughlai cuisine are
served at lunch and dinner.
The Atrium Wing's Convention Centre can hold ConIerences & Banquets Ior up to 2000 guests,
while the hotel's Iull Iledged Business Centre Ieatures two Iully equipped board rooms and three
private oIIices. The guests can spend time at the hotel's Iitness centre or shop at "Pavilion", the
hotel's impressive shopping arcade. New Nortel (Meridian) digital telephone systems, the latest
and most advance telecommunication system have been installed.

5.3.3 Pearl Continental Hotel, Rawalpindi

Islamabad airport, which serves the twin cities, is a ten minutes drive Irom Rawalpindi's only
deluxe hotel, the Pearl Continental and in close proximity to archaeological sites in Taxila,
historical monuments and hill stations.
The hotel has 200 comIortable guestrooms and suites and Ieatures an Executive Floor with a
private lounge, where breakIast is served in privacy and snacks are available round the clock.
Modern day Iacilities include direct dial local, national and international dialing, cable TV,
Heating and Air conditioning. Electronic saIe with a selI-setting code and Computer controlled
electronic door locks are also installed.

The restaurants have acquired an excellent reputation Ior the quality and variety oI their menus.
The Bukhara Restaurant oIIers a variety oI traditional barbecue dishes and at Tai Pan, sumptuous
Chinese cuisine is served in an elegant setting. Pakistani and Continental Iood is served at the
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Marco Polo. TasteIully reIurbished, our conIerence and banquet Iacilities can cater Irom small
meetings, to royal banquet oI 650 to 1500 people, in the halls and the vast Eastern and Western
lush green gardens. The new conIerence Iacilities have state oI the art audio visual aids.
Recreational Iacilities include a heated swimming pool, tennis and badminton courts, an exercise
room and large lawns Ior jogging enthusiasts.

5.3.5 Pearl Continental Hotel, Peshawar

Situated between the old and new Peshawar on Khyber Road, Pearl Continental Hotel is just two
kilometers Irom the airport and overlooks the Iamous Peshawar golI course and the impressive
Bala Hisar Fort.
The Hotel, with its 150 rooms and suites provides modern Iacilities and comIort with traditional
hospitality and excels in its cuisine and banquets. The Khushal Hall can accommodate up to 500
people and can be subdivided into smaller rooms, while the Tatara Room on the IiIth Iloor has a
seating capacity oI 100 people Ior meetings and small banquets. The Marco Polo, located in the
main lobby, is open 24 hours, serving 3 meals a day.

Both Continental and Pakistani cuisine is served in the Marco Polo restaurant, whereas Tai Pan
has become the premier choice Ior Chinese Iood in Peshawar.
The Health Club, heated swimming pool and badminton court are there to help one unwind aIter
a long day at work or sightseeing. There is a plan Ior the addition oI 166 rooms to the PC
Peshawar to serve the increasing need oI the journalists, contractors, diplomats and businessmen
who might be concerned with the rebuilding oI AIghanistan. This project is expected to cost
around Rs. 520m. The structure oI the extension has already been built, which is the most time-
consuming phase. The rest will be set up quickly when demand is ascertained.

5.3.6 Pearl Continental Hotel, Bhurban
In Bhurban, Pearl Continental Hotel is nestled in the midst oI natural grandeur at an elevation oI
over 2000 meters. The hotel, set against a breathtaking backdrop oI the Kashmir Valley at the
Ioothills oI the Himalayas, is a seventy-minute scenic drive Irom Islamabad.
The hotel provides 200 elegantly Iurnished rooms, including 16 suites, with private terraces. It
oIIers complete health Iacilities with swimming pool, squash and tennis courts and a well-
equipped gym with spa, Jacuzzi, sauna and steam bath. Guests can enjoy outdoor activities Irom
trekking to horse riding or a good game oI golI at the adjacent nine-hole golI course. Fascinating
and delightIul day trips can be made to nearby Murree, Patriata, Nathiagali or even
MuzaIIarabad, the capital oI Azad Kashmir.
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The restaurants include the Nadia Lounge, which oIIers its guests local and continental cuisine,
along with a spectacular view oI the mountains and valleys. The hotel also Ieatures an
amphitheatre with a seating capacity oI 1000 people, which is regularly used Ior open air shows.
With its superb ConIerence and Banquet Iacilities, the hotel is the perIect location Ior vacations,
business meetings and conIerences.

5.. Zaver Pearl-Continental Hotel Gwadar
As a Iuture city oI commerce and trade, Gwadar has a unique combination oI climates and
astounding natural Ieatures. Its white sandy beaches with stark mountains in the backdrop exude
a shooting calm Ior those who want to sit back and relax. Pearl Continental Hotel, Gwadar,
promises a lot with state-oI-the-art Iacilities. It will serve an ideal spot Ior any occasion. Who
could Iail to be swept oII their Ieet by the magical coastal area oI Gwadar? With progressive
plans Ior transIormation oI the seaIront, Gwadar is Iast becoming a tourists' delight with its
sandy beaches, rugged, craggy terrain and deep aquamarine sea. Perched majestically on a cliII





Overlooking the isthmus oI this peninsula, Zaver Pearl Continental Hotel Gwadar is an
architectural gem encased in glass which aIIords an all encompassing view oI the breathtaking
natural terrain oI Gwadar including the Arabian Sea. The ultra modern ediIice provides Iirst class
accommodation and is equipped with all the modern amenities oI a deluxe hotel. It is also
serviced by banquet halls, a health club and a business centre. Guests can enjoy a private
breakIast on the generous balconies or at Nadia CoIIee Shop. Jason's Steak House oIIers steaks
prepared Irom imported meat. The hotels reputation Ior a wide variety oI gourmet Iood is well
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earned with added authentic Chinese Restaurant, Taipan, oIIering Szechwanese and Cantonese
cuisine.

5.3.8 Pearl-Continental Hotel Muzaffarabad
MuzaIIarabad, deemed as a paradise on earth`, is located on the conIluence oI the Jhelum and
Neelum rivers with luxuriant landscape. The Pearl Continental Hotel MuzaIIarabad is rewarded
with views oI panoramic postcards. Lush green slopes, grey duvets oI clouds and ethereal
ambience are all that make Pearl Continental Hotel MuzaIIarabad the most awaited leisure
destination. MuzaIIarabad is an easy 2 hours drive Iorm Abbottabad via Mansehra route (70km)
and Irom Benazir Bhutto International airport it just Ior away at the distance oI 138km (3&halI
hours drive). Usually Irom Islamabad, the route via Murree is used to reach MuzaIIarabad.

Opening in 2007 and Ieaturing 102 guest rooms, with 03 suites, 29 executive rooms, 30 deluxe
rooms and 40 standard rooms with awe inspiring views oI the river side, Kashmir Valley Irom
each equipped with 5 star amenities including plasma television, which you can expect Irom the
Pearl Continental Hotel. PCHM will be a perIect base Ior business and recreational activities.
What began as a dream would live on as an unIorgettable experience.

5.3.9 Pearl Continental Hotel Dubai
Bringing with us the warmth and Iriendliness Pakistan pride themselves on. Raising the standard
oI excellence in hospitality, the pearl Continental chain oI hotels has ventured into the heart oI
:-,i.



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6. MA1OR PRODUCTS OFFERED BY ! KARACHI
Ideally situated in the Iive star district oI Pakistan's commercial capital, and a 20 minutes drive
Irom Quaid-e-Azam International Airport. Following are the products oIIered by P-C hotel.
6.1 Rooms
The 290 guest rooms comprising oI 18 Executive suites, Iour super deluxe suites and 30
Executive Rooms are all designed to provide the utmost in comIort. All rooms are equipped with
satellite television, in-house movies and modern amenities. In Iact, every Iacet and Iacility
required by the discerning travelers is catered to.
The room division oIIers the ultimate in luxurious living with 24 hours in - house movies,
satellite music and 30 channel satellite television networks.
Personal Iacsimile machines are available in all suites and executive club's rooms ensuring
complete privacy and conIidentiality. Business Centre & Secretarial Services are also available
throughout the day and up to midnight.
6.2 Restaurants & lounges
We pride ourselves on the quality, presentation and health beneIits oI our careIully designed
menus. Whether you decide to taste our Iine cuisine in the hotel or satisIy your taste buds in our
Chandni RooI Top restaurant, our master cheIs always select only the Ireshest oI Ioods and
ingredients.
6.3 Marco Polo
Lobby level, overlooking the swimming pool, oIIers a wide range oI cuisine Irom around the
world. It is open Ior breakIast, lunch and dinner (ala-carte).
6.4 Tai-Pan
Lobby level, Ieaturing exotic Chinese cuisine. OIIers authentic Chinese schezuan and Cantonese
style oI cooking. The cheIs have been specially Ilown in Irom mainland China. It is open Ior
lunch (buIIet) Sunday to Thursday and dinner (ala-carte) every night.
6.5 Bistro
Lobby level. Provides round the clock service oI snacks and beverages in the most popular chic
and aIIordable restaurant in Karachi.
6.6 Grapevine
A Sunken coIIee shop in the lobby, serving light snacks, high-tea, juices, tea & coIIee Irom
10:00 AM to 10:00 PM. A live band plays throughout lunch and dinner here.

6.7 Chandni
Our rooItop restaurant provides a glorious view oI the city by day or night. A perIect venue Ior
executive lunches and romantic dinners Ior two. The restaurant serves buIIet lunch and dinner
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throughout the week. Ala-carte menu is also available and the Chandni specializes in Continental
and Pakistani cuisine which excels and out shines any cuisine served in Karachi.
6.8 Business centers
The spacious and eIIicient business centre oI the pearl continental Hotel Karachi is conveniently
situated at lobby level.
It oIIers services oI international direct dialing, Iax, e-mail, internet, photocopying, typing with
laser printer and telex.
The experienced staII has been chosen to give the guest maximum satisIaction, service and
courtesy.
6.9 Health club
The Health Club and Recreational area has recently been renovated and expanded. Latest
exercising machines provide the best callisthenic outlet.
There are also three air-conditioned squash courts plus two hard court tennis championship
courts oI international standards. The health Club & Recreational center has an outdoor
temperature controlled swimming pool measuring 20 meters by 9 meters depth.
Other Health and Recreational Facilities include:
O Health Club with Gym * Sauna
O Aerobics * Calisthenics
O Low impact cardiovascular workout * Heated outdoor Swimming Pool
O Jacuzzi * Air-conditioned Squash Courts
O Steam Bath * Tennis Courts
6.10 Services & Facilities
The Pearl Continental Hotel oIIers complimentary airport shuttle service including travel desk
Iacilities and provides hotel links to all major international cities having membership oI Leading
Hotels oI the world consortium. Within Pakistan, Pearl Continental Hotels oIIers 5 star deluxe
services in all the major cities oI Pakistan through its nation-wide chain oI Pearl Continental
Hotels Pakistan.
The hotel Ieatures over 30 Channel Satellite TV, In-house movies, Fax machines in all suites and
executive club's rooms, International direct dialing, Exclusive electronic saIes, Non-smoking
Iloor, Centrally air-conditioned environment, Beauty Salon/Barber Shop and a Shopping arcade.
Besides these the Iollowing services and Iacilities are available to our guests:
O Laundry/Dry Cleaning * Jewellery and Gem shops
O Travel Desk * Parking
O Airline OIIices * In-House Doctor
O Florist * Bookstore
O Business Centre * Pharmacy
O 24 Hour Room Service * Car Rental
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7.FINANCIAL HIGHLIGHTS



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7.1 Glimpse of Financial Statements

The consolidated revenues during the reporting year were recorded at Rs.4,555 million as against
Rs. 4,729 million generated in the last year. The consolidated loss beIore tax and loss aIter tax
Ior the year 2008-09 was recorded at Rs. 150 million and Rs. 277 million respectively. The
wholly-owned subsidiary Company, M/s Pearl Tours and Travels (Private) Limited, continued to
engage in the business oI Rent-a-Car and arranging package tours. It has generated revenue oI
Rs.120 million during the year under report as compared to Rs. 125 million oI 2007-08. During
the year your Company acquired 100 stake in M/s MusaIa International (Private) Limited; this
a company principally engaged in project management business. Currently it has been awarded
with a project Ior construction and development oI an underground parking in the highly
demanding area in Karachi and is expected to complete in the current Iinancial year. During the
year under review M/s MusaIa International (Private) Limited earned net proIit aIter tax
amounting to Rs. 4 million primarily Irom placement oI surplus Iunds in proIit bearing account
with banks. Other wholly owned subsidiary companies, namely, M/s Pearl Continental Hotels
(Private) Limited and M/s Bhurban Resorts (Private) Limited remained non-operational during
the Iinancial year 2008-09.
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7.2 Performance of Rooms Department

Revenue Irom Rooms Department Ior the year 2008-09 (inclusive oI GST) was recorded at Rs.
2,473 million as against Rs. 2,782 million oI the preceding year and thus registered a drop oI 11
percent which in terms oI amount comes to Rs. 309 million. Average occupancy went down
Irom 55 percent recorded during the year 2007-08 to 49 percent achieved in the year under
review - a reduction oI 6 percent. SigniIicant business drop witnessed all over the world which
also shriveled market potential in Pakistan and created stiII competition; in order to retain our
market share to all possible extent, we had to compromise over room rate and resultantly the
Average Daily Room Rate oI Rs. 8,439 achieved in the year 2007-08 went down to Rs. 8,060
during the reviewing year.

7.3 Performance of Food & Beverage Department

Despite extreme poor business conditions in the country, revenue Irom Food & Beverage
department not only maintained the numbers achieved in the last year but also surpassed it.
During the reporting year the revenue generated Irom Food & Beverage department reached to
the amount oI Rs. 2,584 million (inclusive oI GST) as against Rs. 2,426 million earned in the
corresponding period oI last year. From these numbers it is evident that we had managed to earn
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incremental revenue oI Rs. 158 million Irom this segment; thus modest rise n business Irom this
segment resulted into nearly 7 percent growth than that oI the comparable period oI last year.

7.4 Performance of Other Related Services/License

Fee/travel and tour division The Revenue (inclusive oI GST) Ior this segment during the year
under review was Rs. 201 million as compared to Rs. 184 million recorded in the last year. It is
evident Irom the above numbers that in spite oI Iacing economic hardships; revenue Ior the year
under review Irom this segment surpassed that oI the last year by Rs. 17 million which shows
nearly 9 growth.

Case on P-C hotel Karachi

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7.5 Statement Of Value Addition & Its Distribution

2008-2009
VaIue added (Rupees '000)

Sales and services net

Other operating expenses

Other operating income

Materials, service & finance cost (except remuneration)

Distribution


Employee remuneration

Government (taxes & levies)
Shareholders (dividend)

























,,575
(5,105)
,80

,55,330

(1,87,73)

2,382,857


1,118,95

1,15,115
8,78

2,382,857

Case on P-C hotel Karachi




8. PROBLEMS IN THE P-C HOTEL KARACHI

As is the case with real estate in general, the hotel is cyclical. However, hotel is also operating
businesses. Hotel is inIluenced by Iactor that oIten have little or no eIIect on other kinks oI real
estate, such as the health oI the economy, business travel needs, and people`s recreational plans.
These Iactors have a signiIicant impact on the hotel and ultimately on hotel industry, and the
corresponding value oI hotels.

P-C Hotel also have Iallen prey to many oI the same Iactors that depressed commercial real
estate values in the 1990, a lack oI debt available in the market, the oversupply oI hotel product,
the elimination oI many tax beneIits Ior owners, a depressed domestic and worldwide economy,
and the Iire sale oI real estate owned (REO) hotel product held by the Resolution Trust
Corporation (RTC) and institutional lenders, who have regulatory and Iinancial constraints
motivation them to dump their hotels and other real estate at a Iraction oI the original loans.
These Iactors have combined to cause one oI the biggest declines in hotel values since the Great
Depression.
Hotel revenue growth has steeply dropped by 45 percent in the backdrop oI global recession and
persisting bad law and order situation. However, the growth in the occupancy oI hotel has been
improved despite Iew negative developments. A representative oI the leading int'l brand hotel oI
the metropolis, while talking to The Nation said that there had been an up-down turn Ior P-C
hotel, the trend led to 45 percent oI growth.
The major Iactors resulting in the down turn have been global recession and it narrowed tourist
attraction. But the major cause has been the terrorist incidents that have greatly shook the hotel
industry in the sub-continent, i.e. the blast oI Islamabad Marriott and the Mumbai carnage at Taj.
Hotels are Ieeling the recession, and recent industry projections show that this might be an
extended stay. The business oI hospitality in terms oI hotel and tourism has greatly suIIered due
to the recent past incidents oI terrorism and global recession that hit the global industry hard
enough, so hard that Pakistani economy has not generated enough revenue Irom hotel business
and tourism and the on-going preceding changes are nowhere in sight in the coming Iuture
either.
Terrorism has greatly destabilized the economical Iertility oI hoteling such as the Marriott blast
and the Mumbai carnage incident, the oII shoots oI the incidents Iorced the Ioreign tourism
industry to suIIer extensively as it had great impact on the law and order situation in the country
and business oI PC is no more secure Irom its impact.
The perception that Pakistan continued to be a breeding ground oI terrorism, compounded by the
attack on the JW Marriot hotel in September 2008, obstructed all eIIorts oI the government to
grow the tourism in Pakistan. The major concern remained the security concerns Ior travelers.
Further, Pakistan`s image which is more oI a country where a constant war is going on did not
help in the growth oI travel and tourism.
Case on P-C hotel Karachi



As we all know about the attack on CID building Karachi, it was a disaster Ior whole hotel
industry as well as Ior P-C Karachi because the CID building located nearer to Hotel. Hotel Iaces
huge losses in terms oI Revenues. The hotel suIIers its Revenue coming Irom Banquet
department through Iunctions, outside party arrangements, inside meetings due to Iear to have
these kinds oI attacks again. Hotel is also suIIering to get its supply on right time because
security Iorces create barriers due to the red zone area and suppliers pay extra money(bribe) to
policemen`s which is ultimately paid by hotel itselI and hence the total cost oI all kind oI
supplies including daily Iood and beverages, store related goods and engineering items
increased.
The daily occupancy oI hotel is on decreasing trend and average room rate (ARR) goes down to
50 monthly. Few oI its outlets are closed Iully or some oI them are remain open only Ior either
in lunch or in dinner.
The late night parties/Functions are banned by the government so according to Law oI the land
the hotel is losing its major business by closing its events in night timings.
The general trend regarding tourist arrivals across almost every country declined in 2008,
indicating a trend where despite all eIIorts oI the government, the tourism industry was Iailing to
kick oII in Pakistan. All business as well as leisure travelers` numbers declined during 2008.
Tourists coming Irom neighboring countries such as India and Iran also declined. The road and
rail link with the neighboring countries Iailed to give a boost and this remained a major concern
in the review period.
An independent report by World Economic Iorum`s Travel and Tourism Competitiveness Report
2008 (TTCR) suggested that tourism Iacilities remained unsatisIactory in Pakistan. Due to the
absence oI world class tourism Iacilities, Pakistan is constantly being put on the back Ioot when
it comes to tourism promotion. In addition to a poor tourism inIrastructure, the country also lacks
standard and competitive hotel rooms at popular tourism sites. The TTCR ranked Pakistan at
number 110 out oI 124 countries, when it came to provision oI standard and competitive hotel
rooms.











Case on P-C hotel Karachi



9. CONCLUSION AND RECOMMENDATIONS

9.1 Conclusion

For the sake oI conclusion the Iollowing points are considered to be a core resultant and also the
conclusion oI this worthwhile report. These clauses include:

O Hospitality industry mainly depends upon the Ioreign investors and tourists which was
disgrace by another highlighted issue currently prevailing in our economy known as
Terrorism`. Hence our basic purpose oI study to this report is how to overcome these
Iactors by diIIerent strategies
O Pearl Continental Hotel is the largest and oldest Iive star hotel chain oI Pakistan. This is
operated by Pakistan Services Limited (PSL) whose primary business is hospitality. Pearl
Continental Hotels, beside in-house reservation network, are also associated to have
international exposure and overseas reservation network.
O The risk Iactors include regulatory risk, inIlationary risk, reinvestment risk, liquidity risk,
business risk, Iinancial operation risk and call option risk.
The clauses represent the issues which are Iacing now days by PC hotel. PC hotel can adopt
new strategies and strategy implementation process in order to cater the real liIe scenarios by
having a command on counter the problems on day to day basis which relates to the business
oI the Hotel. The strategies implemented will give result oI great achievements oI PC hotels
in respect oI its worth, market value and revenue generation.


9.2 Recommendations

By the completion in Iact successIul oI this report author`s has come on some recommendations
to encounter the existing as well as the problems which are expected to come in the Iuture. The
recommendations, iI implemented, would be proud as a remarkable achievement by the Pearl
continental hotels and collaboratively the some would lead the chain oI hotels to proIit
generation in term oI double the previous.

The recommendations are made aIter having a care command as well as the detected
speculations oI the previous, current and the hypothetical situation oI the Pearl Continental hotels
in which the some is indulge.

As we discussed earlier that hotel Pearl Continental comes under the category oI 5-star hotel and
also it is in the list oI leading small hotels oI the world so the recommendations made on this
account which have a great worth oI getting the positive result aIter the success implementation
oI the same.

The undergoing recommendations are included to be implemented on ground reality basis in
order to cater the current demand oI the market. The market includes the people and the people
include both the local as well as the Ioreigner`s customers. The thing to be notice here is that as
Case on P-C hotel Karachi
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the Guests oI Pearl Continental hotels are mainly approach Irom Ioreign countries and only a less
occupancy rate so the below recommendations are made by observing the condition which are
considered to be suitable according to the luxuries standards oI Ioreign countries.

The recommendations are as Iollows:

O The location oI the hotels in diIIerent cities oI Pakistan is Iound Iar away Irom airport
which are to be closed Irom airport so that it could be convenient Ior the Ioreigners to
approach as quickly as possible. Here we remember that this recommendation is made
Ior Iuture coming projects.
O The security technology must be sound and the security instruments should be import
directly Iorms Japan or USA in order to ensure the security oI the respected guest or
customers. Hidden security personals should be placed at a range oI two kilometers oI
the hotels diameter.
O The contracts with the airlines should be enlarge the publicity and marketing in the Iorm
oI business could be enjoyed.
O The contracts regarding the arrangements oI exhibitions should be enlarge in all oI the
cities which mainly Iacilitate the Ioreigners` guests as well as customers. The above
recommendation relates to the marketing aspects oI the hotels.

Now below are some recommendations which would, iI implemented, cater the management side
oI the hotels.

O The SOP`s oI the hotels don`t cater the labor laws oI Pakistan as the employees are
working in the hotels on daily wages and on contracts Ior about Iour to Iive years yet they
are not become permanent in the hotel where as the law teaches us that a working become
a permanent employee iI he/she Ior 90 days in an organization. This deIect should be
reIlected.
O The above management problem leads to the de motivation oI the employees and this de
motivation should on the Iorm oI employees and housekeeping, electrician, room service
department`s personals are directly related to customers residing in the hotel. The overall
impact could damage the business in broader and long term aspects.
O Educated people should be hired in the staII level category or provide training to present
staII in the Iorm oI education so that the communication problems could not be raised
Irom any end.
O The staII oI housekeeping and other departments does not perIorm their duties like turn
down shiIt in the evening due to lack in supervisory Irom middle management.
O Central dust ventilation should be perIormed aIter every three months which is currently
perIorming aIter one year.
O Inspection report shows that the conditions oI rooms are not satisIactory because oI
which guests oIten give negatives comments which directly hit the image oI the hotels.
So Ior the purpose oI reducing such kinds oI reactions the management reIurnished the
rooms aIter every year which is currently have duration oI Iive years.
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