The government has cancelled the tender process arranged for appointing a company to manage Dhaka Sheraton hotel under a franchise arrangement, saying the proposals received were not eligible.

The decision has left the fate of the five-star hotel in uncertainty as Sheraton, the existing company that operates and manages the state-owned hotel, will leave by March 31 and the government is yet to have any replacement.

Now the government is thinking of going back to its previous stance and appoint an international hotel chain to operate and manage Dhaka Sheraton, said a senior official of Bangladesh Services Ltd (BSL), seeking anonymity.

In the tender process six companies expressed interest to manage the hotel under a franchise agreement. The last date for submitting the proposals to the BSL was February 18. The new franchise would manage and operate the hotel for the next five years, starting from April 1,2009.

The BSL official said the government is now planning to take a soft stance on the issues over renovation of the hotel and will again invite bid soon to hire a world-class hotel chain.

Industry insiders said several international hotel chains expressed interest to operate and manage the hotel, but all said the

hotel requires immediate renovation. The government reluctance to renovate the hotel caused the failure to appoint a world-class brand to operate and mange the hotel and go for a franchise arrangement.

Franchise, an authorisation to sell a company's goods or services in a particular place, is a new idea in the country's hospitalityindustry.

The government will appoint a franchisee, which will have a deal with an international chain, and it will use its brand name to manage the hotel.

Earlier, the government was about to appoint Ramada Plaza to operate the hotel, and American Property Management International for the franchise contract, according to BSL officials.

However the government backtracked on the move.

The quest for hiring an international hotel chain started in May 2008 after Starwood, the parent company of Sheraton, informed BSL that it will renew the contract if the government immediately goes for renovation.

Starwood's 25-year-deal with BSL, the government organisation that owns more than 98 percent of the hotel, expired on December 31,2008 and the company later extended its contract up to March 31.

However both the civil aviation and tourism ministry and the BSL declined to comment on the issue before finalising anything.

sayeda@thedailystar.net