Gulf Hotels profit drops after closure on Iran strike

Gulf Hotels Group said net profit fell by more than half in the first quarter after an Iranian strike led to the closure of one of its prime properties in March.

Net profit dropped to BD1.2 million ($3.2 million) in the quarter ended March 31, from BD2.5 million a year earlier, the hospitality company said in a statement to the Bahrain Bourse.

Revenue fell 21 percent to BD7 million in the three-month period, while assets slipped 5 percent to BD111 million.

“We delivered a strong start to the quarter; however, performance was subsequently impacted by the spillover effects of ongoing regional conflict and heightened geopolitical tensions,” chairman Fawzi Kanoo said.

These developments weighed on travel demand across Bahrain and the wider GCC, resulting in lower hotel occupancy and increased operating costs, he added.

The Iranian attack on the 278-room Crowne Plaza Bahrain, one of its prime properties, caused significant structural damage and led to temporary closure, resulting in revenue loss and a direct impact on operational performance.

Kanoo said the company remains cautiously optimistic about the outlook for Bahrain’s tourism and hospitality sector, supported by government initiatives.

CEO Ahmed Janahi said the company is expanding its third-party operator partnerships and is moving ahead with Burhan Hotels to manage and operate three properties in Mecca, with close to 1,000 rooms.

Gulf Hotels Group, known as Bahrain Hotels Company before listing, was founded in 1969. Its hotel portfolio consists of eight properties.

The company’s stock closed at BHD0.364 on Wednesday.

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