MANAMA: Bahrain-based Gulf Hotels Group (GHG) is looking to expand into Saudi Arabia, for which it has signed a memorandum of understanding (MoU) with Redha Group.

The group’s chairman Farouk Almoayyed told the GDN on the sidelines of the annual general meeting (AGM) yesterday that it would look to operate hotels, apartments, restaurants and laundry businesses in Saudi Arabia.

On plans in Bahrain, Mr Almoayyed said the group has purchased a plot of land in Block 338 in Adliya Tourism Zone to develop a multi-unit restaurant complex.

“The second phase of the renovation of the Crowne Plaza Hotel will start this year as will work on a project to operate food and beverage outlets and chalets in Bahrain Bay,” he added.

According to him, although challenges for the hospitality industry in Bahrain continue due to declining occupancies and room rates, the government had started to take positive steps to bolster tourism and has reduced the levy to five per cent to compensate for the introduction of VAT.

Addressing shareholders during the AGM, the chairman said for 2018, GHG achieved total gross operating revenue of BD35.111 million, a decrease of 5.77pc compared with BD37.261m in same period of 2017.

It generated a net profit of BD6.92m, a decrease of 37.28pc, compared with BD11.036m achieved in 2017.

The decrease in net profit was partly due to the pre-opening expenses for the Gulf Court Hotel Business Bay Dubai which opened last August, interest costs pertaining to the purchase of the property and additional depreciation for the same, along with the new beverage operation in Sri Lanka.

Profit was also impacted by the temporary closure of the Gulf Convention Centre and a number of outlets, which were under renovation till Q3 last year.

Development cost of the land in Dubai was also written down, while associates and share investments also saw reduced profits.

“Given the expansion of hotel operations into Dubai, expansion of beverage operations into Sri Lanka and the significant upgrade to the Gulf Convention Centre and outlets, we always knew that this would have an impact on the 2018 profitability, but the year has seen a major step in our expansion strategy and will yield positive results in years to come,” said Mr Almoayyed.

Group chief executive Garfield Jones said the construction of Gulf Executive Residence in Juffair was completed last December and is expected to make a positive contribution to group income this year.

The AGM also saw shareholders approve a cash dividend of 30pc for 2018.

 

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