A GOVERNMENT action plan is necessary to help hoteliers overcome ongoing financial challenges, according to experts.
Bahrain’s hotel sector suffered a rough year with low room occupancy rates and increased overhead costs in 2016.
Four and five-star hotels reported an average room occupancy of 40 per cent last year, which Bahrain Four Star Hotels Committee chairman Hameed Al Halwachi said slightly picked up when the country hosted international events.
“Business was slow last year without a doubt,” he told the GDN.
“The industry first took a hit in 2015 when the suffering began for the hotel industry not only in Bahrain but the entire region because of low oil prices which continued last year.
“There was a proper calendar of events set by authorities, but all those targeted local audience rather than regional or international.”
Despite efforts by the Bahrain Tourism and Exhibitions Authority (BTEA) to attract visitors through promotions, roadshows and other campaigns, Mr Al Halwachi told the GDN hoteliers were facing high overhead costs – adding that an average of 40pc room occupancy was “not even close to breaking even”.
“Utility bills along with prices of alcohol have increased which has to be dealt with by hotel owners and even passes on to the customer,” he said.
“There were some hotels who did not even pay their staff because their business was down.
“We are also seeing three-star hotels which are upgraded to four-star properties only focusing on nightlife for their revenues, which has led to some outlets violating the law and having their licences cancelled.”
Another challenge was competition from furnished luxury apartments which were cheaper for Gulf families to rent.
“GCC visitors have become smart in their spendings looking for the best deals and not like before,” said Mr Al Halwachi.
“Also, the hotel business in Bahrain is like a sea wave that starts from January 15 until May when conferences are held and visitors fly in and then from June to September the business is slow.
“Imagine during Ramadan hotels have 5pc to 10pc occupancy and people only come to have iftar meals.
“It picks up from October until December and then the cycle continues.
“We need a solid action plan for 2017 that should be discussed and approved by the government bodies after consulting with hoteliers.”
According to a tourism survey conducted by the Information and eGovernment Authority, the occupancy rate for the first quarter of last year was 49pc compared with 56pc in 2015.
“The occupancy rate decreased in the first quarter of last year with same period in 2015,” said Bahrain Chamber of Commerce and Industry’s Tourism sector committee head Sufyan Almoayed.
“However, despite all these challenges faced by the different economic sectors including the tourism sector, we can emphasise the fact that this sector has proven its resilience and ability to sustain its contribution to the kingdom’s economy.
“According to Economic Development Board reports, hotels and restaurants have been one of the most dynamic sectors in the economy with nearly 10pc annual growth since the turn of the century.
“And according to the World Tourism and Travel Council, the tourism sector’s contribution to Bahrain’s GDP reached 4.3pc in 2015 and is expected to increase to 5.3pc over the coming period of 2016 to 2026 fuelled by growth in hotels, restaurants, travel agencies and other related supporting industries and business.”
Bahrain aims to attract revenues of BD1 billion per year from tourism by 2020 and 15 million arrivals by 2018.
Estimated tourism revenues for 2015 were BD600m, but new tourist projects worth up to BD2 billion are expected to support growth in Bahrain.