Hotel occupancy levels in Bahrain have plummeted to as low as five percent and the opening of some new hotel properties have been delayed as the island state reels from the impact of ongoing civil unrest and the cancellation of the Formula 1 Grand Prix in February.
“After being ranked second in the region for its tourism and travel competitiveness, according to the Travel and Tourism Competitiveness Report released by the World Economic Forum, hotels in Bahrain are currently achieving occupancy rates of between five percent and ten percent,” according to a new report by consultants at CB Richard Ellis this week.
“It is hoped that this will be just a temporary setback, but several hotels previously rushing to meet the Formula One opening deadline in March have put back their formal openings until after the summer period,” the report said.
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The CBRE report places the blame on the declining occupancies on the ongoing unrest in the island state and the cancellation of the Bahrain Formula One in February.
“With Formula One “called off”, low levels of visitation by Saudi and Kuwaiti nationals and business travel curtailed, the hospitality and leisure industry has experienced a substantial setback so far this year,” it reported.
In addition to the drop off in hotel guests, the report found that the retail sector was also being hit by a drop in footfall.
However, it did observe that “activity levels have improved as curfew hours in Seef District have been relaxed and retailers have reported a significant upturn in business.”
Bahrain declared martial law on March 15 after troops from Saudi Arabia and the UAE arrived to help quell protests that have gripped the Gulf state for more than a month.
The army on March 19 demolished the 300ft monument on the Pearl Roundabout in Manama, which had become a focal point for protesters.
Earlier this month, Bahrain's prime minister Prince Khalifa Bin Salman Al Khalifa said life was returning to normal after weeks of protests. "All signs confirm that security, which has always characterised Bahrain, is returning and life is going back to normal after attempts by some people to destabilise the nation," he said in comments published by state news agency BNA.
Last month, data compiled by STR Global found that the region's hotel occupancy levels dropped to 56.7 percent but a large part of this fall was seen in Egypt where rates slumped 79 percent compared to the same period in 2010.
Hotels in Lebanon saw declines of 39 percent in February but STR Global said Bahrain hotels stood up well considering the unrest with occupancy down 17 percent to 61 percent.
Despite the occupancy declines, the region's average daily rate (ADR) rose 17.1 percent to $188.53, and its revenue per available room (RevPAR) went up 2.3 percent to $106.92.
“This month we see the impact of the demonstrations and political changes across the Middle East and Northern Africa”, said Elizabeth Randall, managing director of STR Global.
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