Gulf Hotels Group (GHG) earned a net profit of BD1.844 million ($4.89 million) in the first three months of the year compared with BD3.355 million for the same period last year, a drop of 45 per cent.

Chairman Farouk Almoayyed said the effects of the unrest which started in the second week of February meant the financial results had fallen below expectations.

The cancellation of the 2011 Formula 1 Grand Prix together with most of the major conferences, meetings and banquet functions, plus the travel ban imposed by many countries all contributed to a substantial decline in results as compared to first quarter 2010.

The group managed to achieve a gross operating revenue of BD6.963 million in comparison with BD8.942 million achieved in 2010.

Almoayyed said that during February the group made an additional investment of 5,000,000 shares in the Bahrain Family Leisure Company, increasing the shareholding to 28.05 per cent on the issued and paid up capital thereby treating it as an associate from this quarter.

'The hospitality industry has been hit badly by the unrest,' said chief executive Aqeel Raees.

'We implemented a series of cost cutting exercises in order to control overheads but we are pressing ahead with our sales strategy and continue to promote the hotel at major events such as ITB, Berlin and Arabian Travel Market.

'We remain committed to the development of the company and continue to plan for upcoming projects including refurbishments in the Gulf executive residence and the addition of a spa.'-TradeArabia News Service