GHG Q1 profits increase 21pc

Manama : Gulf Hotels Group (GHG) announced financial results for the first quarter of 2017, reporting a net profit of BD3.311 million after consolidating the results of BTC as against BD2.736m last year, representing an increase of 21 per cent. Gross operating revenue was BD9.343m as against BD8.578m recorded last year.  

Chairman, Farouk Y Almoayyed added, however, that whilst consolidated performance was very positive, standalone results (excluding BTC) for the quarter ended 31st March 2017 had declined due to the very difficult trading conditions. 

Total Gross Operating Revenue was BD7.870m compared to BD8.578m in same period 2016, a decrease of BD708,521 or 8.26pc and has generated a Net Profit of BD2.497m in comparison with BD2.736m achieved in the same period 2016, a decrease of BD239,171 or 8.74pc on 2016.

Chairman, Farouk Y Almoayyed reiterated that the hospitality industry continues to be negatively impacted by various government decisions taken in 2016 including the increasing of Government Levy together with the capping of service charge, removing or cutting subsidies and substantially increasing the cost of fuel and utilities. These factors, along with increased competition from a number of new hotel openings in 2016, have negatively impacted the incomes of the hotel division. 

He added that the recent announcements of fifteen new 5 star and 4 star hotels will have further impact on the industry as there is already a substantial over supply of rooms in the market. The introduction of VAT from 2018 onwards will also add to difficulties the industry is facing

Looking ahead, Almoayyed revealed the Group’s expansion strategy, which includes expanding the existing hotel portfolio and establishing a number of stand-alone restaurants.

He confirmed that the company has commenced the development of the 230 rooms, five star Gulf Hotel Business Bay in Dubai, a waterfront property located 1.5 km from Burj Khalifa and Dubai Mall, and expected to be completed end 2019.