Market Entry - Tourism and Hotel Industry in Bangladesh: Analysis of Growth, Trends and Progress (2015-2020)

About the Market

Tourism is an important component of their economy, as well as a significant source of foreign exchange revenues, contributing to 9.3% of country's GDP. Good travel and tourism policies enable 10 million international visitors annually. Indonesia's tourism sector accounts for approximately 4% of the total economy and plans to double the figure by 2019 by improving infrastructure, accessibility, health & hygiene, as well as enhancing online promotional marketing strategy, leading to opportunities in upcoming markets. The government has also revised its visa-free access policy in 2015 to attract more foreign tourists. Famous tourist destinations like Bali and Jakarta have already seen a large influx of investment in recent years, especially, in the upper end of the market, leading to excessive supply, promoting the establishment of hotel industry.

About the Geography                  

Bangladesh is the eighth most populous nation in the world, with a democratic government at its helm. The country is seen as extremely poorand under-developed, due to devastating natural disasters, and the socio-political instability. However, the country has the advantage of being in a strategic geographical position between South and Southeast Asia making it an entryway to both these markets.

The Bangladesh government is active ely seeking foreign investment, particularly in areas of energy and infrastructure. Many incentives are offered through industrial policy, growth strategy by exports and public-private partnership (PPP) program launched in 2009. The government’s strategic vision for 2021 plans growth through massive investment in infrastructure, skill development and trade. In general, there are no restrictions on foreign property or investment. However, four sectors remain restricted to the government, i.e., arms and ammunition, forest plantations, nuclear energy, and security printing. 

Major challenges companies face is the lack of transparency in government procedures, a slow bureaucratic process associated with procurement practices, and corruption. However, a steady CAGR of at least 5.3% over the last 16 years, competitive labor force, large English-speaking base along with a strong consumer base, makes Bangladesh a popular choice among investors.

• Recently, many developed Asian countries have outsourced their factory production, mainly textile, to Bangladesh owing to its low and efficient production capabilities.                                                                

The Market Entry Series

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