Tourism sector ‘may face BD500m loss’

BAHRAIN’S hospitality, tourism and aviation sectors could face an estimated BD500 million loss by the year-end, according to industry experts.

Hoteliers in Bahrain are also urging for exemptions on government levies until December in order to sustain their operations.

In a letter addressed to Industry, Commerce and Tourism Minister Zayed Alzayani they detailed requests to extend waivers on utility bills and monthly fees on expat workers, along with the government continuing to shoulder salaries for Bahrainis in the private sector.

It comes as the Covid-19 pandemic has grounded flights, halted tourism activities and prompted a series of strict measures to limit the spread of the virus.

This includes closure of King Fahad Causeway since March 8 and suspending visa on arrival since March 18 as part of travel restrictions to combat the coronavirus.

Hospitality expert and Skal International Bahrain board member Hameed Halwachi said there are a total of 128 hotels in the country, including 21 five-star properties, with two new projects in the pipeline, 59 four-star properties and 47 three-star hotels.

He also said during a presentation at a Skal Asia webinar that this is in addition to 68 service apartments.

“Hotels are in no position to pay their staff due to the Covid-19 economic shock and flights restrictions have further worsened the problem,” he said.

“Under this situation, if hotels have between five per cent to 10pc occupancy levels, they are lucky.

“The total number of rooms available in hotels and service apartments is about 15,600.

“The occupancy rates for four and five-star hotels increased from 41pc and 49pc in 2018 to 45pc and 52pc last year, respectively.”

Mr Halwachi, who is also a member of the Hospitality and Tourism Committee at the Bahrain Chamber of Commerce and Industry (BCCI), explained that the occupancy rate forecast for this year was initially set at 55pc.

“However, only 5pc to 8pc of properties can achieve this because of the partial opening of businesses,” he added.

“The estimated loss for Bahrain’s hospitality sector at the end of the year is BD500m that includes BD400m for airlines and BD100m for hotels, travel agents, event management and allied sectors.

“We have Eid holidays coming up, but there will be no visitors coming from the airport, causeway or cruise, which is a blow to the business.”

He added that the global hospitality sector would require a $25 billion fund to recover from the financial impacts of the pandemic.

He also suggested extension of waivers of utility bills, municipality fees, tourism levy and expat fees among others to help the industry survive until the end of the year.

Meanwhile, the GDN has secured a copy of the letter addressed to Mr Alzayani, which was last month presented to BCCI chairman Sameer Nass.

“We completely support steps to curtail flights and traffic into the country and the closure of the causeway to restrict the spread of Covid-19, as also for the closure of restaurants, gyms, spas and swimming pools,” stated the letter.

“Yet, this has resulted in our revenues being reduced to negligible amounts and we have nearly no room reservations, zero meetings, no weddings booked and we have to sustain high costs of maintaining our hotels and facilities.”

The letter also urges for a nine-month exemption of Value Added Tax (VAT) and government levies.

They also called for a six-month exemption of utility bills, municipal fees, and expat and Social Insurance Organisation fees, while pushing for benefits of expatriate staff to be subsidised.

The BCCI also forwarded a series of recommendations to authorities last month that includes paying 50pc wages of foreign workers, who comprise a majority of the hospitality sector with Bahrainisation rate between 15pc to 20pc.

The hotels and restaurants sector in Bahrain recorded the highest non-oil sector annual growth at 6.8pc last year, according to the latest economic indicator report released by the Finance and National Economy Ministry.




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