MANAMA: Gulf Hotels Group (GHG) has lined up an investment of BD4.5 million for a full refurbishment of the Gulf Hotel Convention and Spa’s convention centre, despite difficult market conditions.
GHG chairman Farouk Almoayyed told the GDN on the sidelines of the annual general meeting (AGM) of shareholders yesterday that the centre would be shut from May to October this year for the renovation work.
He said the latest round of investment follows another BD7m spent on refurbishment of rooms and the lobby area at group’s Crowne Plaza Hotel.
The refurbished hotel will be ready to receive guests on Sunday after nearly 10 months.
The 109-unit Gulf Executive Residence Juffair is now in the fit-out phase and is expected to open for business after July this year, he added.
Highlighting the challenges facing the hospitality industry, Mr Almoayyed said falling occupancies and room rates over the past four years have resulted in a 21.3 per cent drop in revenues since 2014 for Gulf Hotel.
Recently published figures by market analysts STR indicate a drop in Revenue per Available Room (REVPAR) of 11.8pc across the hotel industry in Bahrain during 2017, with both occupancy percentages and average room rates declining during the year.
He said profitability was further affected by significant increases in costs such as utilities, although he welcomed recent changes in duties that will help the restaurant business but cautioned that the positive impact of change in duties could be wiped out once VAT is introduced.
Mr Almoayyed added that Gulf Hotels Group’s plans of branching out into the Dubai hotel market and the Sri Lankan retailing sector are on track with a target date of mid-2020 for the Dubai hotel and a BD1m spend lined up for Gulf Brands’ foray in Colombo.
The 48th AGM held at Gulf Hotel Convention and Spa saw shareholders approving a cash dividend of 30pc for last year.
The group achieved a total gross operating revenue of BD37.261m in 2017, an increase of 2.43pc when compared with BD36.376m in 2016.
Net profit saw an increase of 10.28pc to BD11.036m from BD10.007m in 2016 (before the one-time bargain profit of BD6.125m).
Adding to comments of the chairman, chief executive Garfield Jones said, “Overall the group has performed well in 2017 although the declining trend in the hospitality sector is a real concern.”