Investing for the future

AS the Bahrain hospitality sector attempts to recover from some record low hotel occupancy rates, one leading company is investing heavily for the future.

Although occupancy rates are down to 10 per cent and staff numbers have been cut as a consequence of the recent unrest in the country, The Diplomat Radisson Blu Hotel, Residence & Spa continues to move forward with new facilities and projects.

Its 13th floor, once the venue for its popular Friday brunch, is being transformed at a cost of BD1.7 million into a banquet hall which will feature a ballroom for up to 350 guests and boardroom facilities.

This comes on top of a BD26 million investment in the twin-tower construction of adjoining state-of-the-art commercial offices and car park.

The complex comes under the umbrella of the National Hotels Company. Its CEO A Rahman Morshed said: "All our current projects are going ahead full speed and we are very hopeful they will be completed on time."

The ballroom should be ready by the middle of summer and the offices in September.

The company recently recorded total net profit of BD7 million, up approximately 17 per cent on the previous year. However, the first quarter of this year, which promised so much in January, has clearly struck a major blow.

Mr Morshed said: "The first quarter normally breaks or makes our activities for the rest of the year. I have been in the industry for over 30 years and usually the first quarter is good, but not this year.

"The situation now is very difficult. We have had no more than 10 per cent occupancy since the unrest began in February.

"We believe the situation is temporary and urge the government to settle it and help rejuvenate the whole economy. We will, of course, be beneficiaries as hotels are one of the first ones to benefit from a good economy."

Mr Morshed explained that the company has been taking a range of measures to reduce the impact of the sudden downturn. One has been to reduce energy. The hotel, which has won international acclaim for its energy efficiency, had closed several floors due to the lack of guests.

And staffing costs have also had to be scrutinised. Mr Morshed explained: "Some members of staff have taken holidays and others have also opted to go back to their countries and have amicably severed the relationship."

As well as expats, the hotel has many Bahraini team members. He said: "People whose areas were affected and had their movements restricted were the only ones who could not come in to work."

All the hotel's F&B outlets have been shut and will resume operations as soon as there are signs of customers returning.