BAHRAIN Hotels in Bahrain are reporting extraordinarily low occupancy rates in recent weeks, following a brief period of political unrest that preceded the cancellation of a Formula One race and which has spurred mass departures of long-staying expatriates.
For a country that was recently ranked second in the Middle East for its tourism and travel competitiveness by the World Economic Forum, the negative turnaround has been dramatic. Hotels in Bahrain are currently achieving occupancy rates of between 5% and 10%, according to a new report from CB Richard Ellis. Several hotel developers that had been rushing to meet the Formula One opening deadline in March have since decided to delay formal openings until after summer.
By comparison, Bahrain’s occupancy in February was reported at 61%, according to STR Global. Bahrain declared martial law on March 15, when troops from neighboring GCC nations arrived to help quell protests that arose in mid-February and lasted for about a month.
Moving forward, the Bahrain government remains confident that its economy remains on target to achieve the 4.5% growth projected for 2011, despite the recent unrest, and is committed to supporting all sectors of the economy, CBRE says. Banks have been asked to help small and medium enterprises affected by the troubles, and they have been relaxing loan conditions as a result.
Although oil prices have risen sharply as a result of political uprisings across the Middle East, the economic windfall from this will be offset by uncertainty, particularly from international businesses, CBRE says. Political stability is key to the kingdom’s ability to recover and grow in the near term, and it is likely that any major recovery in the struggling real estate sector will be put on hold as the market adopts a wait-and-see approach.