Bahrain’s hotels recovery may take longer

Utility bills and monthly rental costs are making their situation difficult to even sustain operations if things do not improve soon

Image used for illustrative purpose. Man talking on the phone in hotel room.

Image used for illustrative purpose. Man talking on the phone in hotel room.

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Bahrain’s battered hospitality sector’s recovery could take longer than expected as five and four-star properties continue to suffer due to pandemic restrictions.

Hoteliers say the ban on indoor dining until next month due to a recent spike in infections, low room occupancy level, and Saudi Arabia’s extension of travel restrictions by changing the date of reopening the borders from March 31 to May 17, has badly affected them.

Furthermore, utility bills and monthly rental costs are making their situation difficult to even sustain operations if things do not improve soon, they warn.

“The situation is the same as before because we heavily rely on Saudi visitors to help the business stay afloat, and it’s almost a year since that has happened due to the Causeway closure,” Miami Property managing director and owner of Swiss-Belhotel Seef Bahrain, Fawaz Bokhowa said.

“The local market cannot sustain itself on domestic demand alone, especially the hotel business. We just hope the Causeway reopens in May. Recovery will take at least two years from then, in my opinion.”

According to latest indicators by Colliers International, the hotels sector in the Middle East and North Africa (Mena) region second quarterly report suggested that due to the impact of Covid-19 on occupancy, the year-on-year change in Manama was seven per cent in 2019 and plunged to a negative 50pc last year.

The average daily rate (ADR) which measures the average rental revenue earned for an occupied room per day in Manama remained negative throughout at 6pc in 2018, then dropped to 1pc in 2019 and again rose to 13pc.

The appearance of a new virus strain also led to additional health safety measures that resulted in the cancellation of Christmas brunches, New Year’s Eve events and restrictions on staging weddings, conferences and special events.

“Bahrain is among the top countries with a high vaccination rate, but it’s frustrating that many use this as an excuse to attend social gatherings when this doesn’t give them a green light for ‘business as usual’,” added Mr Bokhowa.

The key findings of the latest Colliers International Mena report covering Manama, Muscat, Kuwait and Amman

“I remain optimistic that things will pick up. We’re seeing that now with a decent ‘transit business of quarantine visitors’ staying here for 14 days before crossing the Causeway for work.”

Another senior hotelier, who asked not to be named, said hotels could bank on growing the transit business segment further if visa norms were more relaxed.

“Authorities could relax visa rules considering all passengers now have to undergo three PCR tests,” he urged.

“This would attract even more transit visitors heading to Saudi who can stay here in Bahrain and later cross over the causeway.”

However, he said the most pressing problem properties face was a lack of subsidy on utility bills.

“This will hit us hard as temperatures soar in the coming months,” he warned.

“Authorities continue to demand immediate bill payments when the hotel occupancy levels are so low.”

The hotelier welcomed the government’s decision to waive the annual 5pc government levy and urged them to extend it until the year end.

Meanwhile, Association of Bahrain Travel and Tour Agents chairman Jehad Amin told the GDN that officials could promote the kingdom as among the select group of countries that would welcome travellers who had already received their Covid-19 vaccinations ... without the need to quarantine.

“I think it would be a good step to relax visa rules for visitors who have had the vaccination,” said Mr Amin, highlighting the need for three PCR tests for arriving passengers over a 10-day period, as a safety guarantee.

Countries such as Cyprus, Georgia and Seychelles have waived the quarantine rule for vaccinated visitors although they still insist that a negative PCR test is produced.

“I am optimistic that by July there will be significant improvement compared with last year in the Bahrain travel market as the Causeway reopens and vaccination rates increase globally,” said Mr Amin.

As reported in the GDN, Industry, Commerce and Tourism Minister Zayed Alzayani revealed that Bahrain’s tourism industry had suffered an estimated BD1 billion blow as a result of the outbreak of Covid-19 and the restrictions put in place to help prevent its spread.

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