Pandemic-hit hotel sector in help plea

HOTELIERS in Bahrain, “battered and bruised” by Covid-19, have issued an SOS to save the sector, claiming that failure to do so could see many properties shutting down permanently.

Hotels and restaurants continue to be the largest segment of the hospitality industry that has been badly hit by the cornonavirus pandemic, with the tourism sector registering a loss in revenue of BD265 million in the first quarter of the year compared with the same period last year.

Bills

The closure of the King Fahad Causeway since March 8 and visa/flight restrictions have worsened the situation as operators of five- and four-star hotels continue to pay high overhead costs, mainly in the form of utility bills.

Several senior representatives of hotels and travel agents, speaking during a webinar exclusively with the GDN, demanded urgent funds to be injected to save the sector.

“The government has been kind to support businesses and individuals through different waivers, but for us the biggest burden are the high utility bills at a time when there is no revenue,” Crowne Plaza business development consultant Ebrahim Al Kooheji told the GDN during the virtual conference.

“Some sea-front hotels enjoy between 30 per cent to 70pc occupancy on at least three days a week, while city hotels have zero occupancy,” he said.

The hotels have to pay salaries for their expat staff who constitute about 86pc of the personnel in the hospitality sector, with 14pc Bahrainis.

He urged the Electricity and Water Affairs (EWA) to pay the utility bills from July until this month, and even beyond, if possible, to help hotels whose monthly fixed costs range between BD80,000 and BD150,000.

Elite Hospitality Group and Dadabhai Luxury Apartments, chief operating officer Sarosh Aibara said the government should continue the subsidies (utility bills) until the year-end to save the tourism sector.

He said the third quarter was the hottest time of the year when the utility bills would be high and this is when the sector needs fee exemption.

“Our rentals, salaries and other fixed costs have not stopped in the pandemic,” said Mr Aibara.

“This is an urgent SOS from the hotels to save the tourism sector to ensure it survives and doesn’t die – be its hotels, airlines and travel agencies.”

Mr Aibara said tourism has been the largest non-oil contributor to Bahrain’s GDP, and with low prices it was important to sustain the sector.

Survive

“We have to take a decision now between lives and livelihoods.”

Similar views were echoed by Delmon and Caravan Group of Hotels group general manager Mohan Pillai who said some hotels are on the verge of shutting down.

“We have reached a point where it has become difficult to survive in these conditions, and many of us will be out of business for good,” he warned.

“Hotels have to continue paying thousands of dinars in utility bills even when there are no guests; no one can expect to do business like they used to before and recovery could take more than a year.”

The expected recovery time to gain 50pc of business compared with 2019 could be by June 2021, according to Farhat Travels and Rooms24x7 managing director Mushtak Abdul Gafoor.

“The average business decline in the past six months is about 90pc compared with 2019, and the expected recovery will take at least nine months,” he said.

“Our business is highly dependent on neighbouring countries and the continued closure of causeway and air routes is hurting us badly.”

A survey conducted by the Bahrain Chamber of Commerce and Industry (BCCI) covering 1,180 participants found 71pc of business owners from the tourism and hospitality sector expect to close their companies within the next six months, while 52pc from the sector expected to lay off more than 20pc of their staff during the upcoming period.

Meanwhile, BCCI’s hospitality and tourism committee chairman Jehad Amin said they continue to find ways to support the beleaguered sector.

“We have requested for a meeting with Tamkeen and the EWA minister hoping for a special package or waiver of utility bills for hotels for a minimum of three months,” he said.

He added that they had requested a package of not less than BD3m from Tamkeen specifically for the hospitality sector, excluding travel agents who have received aid.

Also attending the webinar was Dadabhai Travels managing director Aziz Gilitwalla.

Industry experts say four-star properties pay an annual licence fee of BD5,000 to the Bahrain Tourism and Exhibitions Authority (BTEA), and the five-star properties pay more.

The fee excludes the annual Commercial Registration (CR) fees, municipality tax (BD14,400 per annum for four-star hotels), rentals that is approximately 30pc of their revenue, EWA bills and staff salaries.

Decline

BTEA statistics for Q1 2020 point to a sharp 47pc decline in the number of tourists, a 49.5pc decline in total tourist nights and a 55.4pc decline in total tourism expenditure.

Occupancy rates in five-star hotels fell to 43pc, down from 53pc a year ago, with four-star hotels seeing a similar decline to 36pc from 46pc a year ago, according to the Bahrain Economic Quarterly for Q1 released by the Finance and National Economy Ministry

In a statement posted on Bahrain Bourse after the group’s Q2 financials were announced, Gulf Hotels Group (GHG) chairman Farouk Almoayyed said their operations and profitability were affected due to the pandemic.

The group has a total of 961 rooms in its Bahrain portfolio, across four hotels.

Income

Likewise, Banader Hotels Company in a bourse statement, reported a decrease in operating income by BD923,210 for the six months ended June 30, as a result of the pandemic.

The company said the 243-room Downtown Rotana Hotel, owned by it and operated by Rotana Group, and other hotel facilities remained substantially closed from March to June this year.

National Hotels Company, the owner of Diplomat Radisson Blu Hotel, Residence and Spa, witnessed a decline of around BD1.4m in revenues compared with the same period last year.

 

Source: http://www.gdnonline.com/Details/851181/Pandemic-hit-hotel-sector-in-help-plea#

 

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