Bahrain's hotels cheer F1's return

Tourism industry in Bahrain relieved that the Grand Prix is back on the calendar, following sharp decline in business in the past few months.

The race is worth an estimated $600 million to Bahrain's economy. Mark Thompson / Getty Images

Hoteliers in Bahrain are cheering the decision to reinstate the Formula One Grand Prix this year, with the sporting event worth an estimated US$600 million (Dh2.2 billion) to the country's economy.

The Bahrain Grand Prix, originally scheduled for March as the first race of the season, was postponed amid violent unrest in the country. The F1 governing body on Friday announced a unanimous decision to reschedule the event for October 30.

While that decision has received criticism, the race is the single most important event for Bahrain's tourism industry, attracting visitors from around the world. Most hotels usually sell out all their rooms for the event.

"We are very happy to hear it," said Heinz Kraehenbuehl, the general manager of the Moevenpick Hotel Bahrain.

"It's a very positive sign for the whole country, not only for the hotels."

"We've already started taking bookings," said Sergio Fernandes, the acting general manager of the Diplomat Radisson Blu in the capital, Manama. The property was charging the same room rates as when the race was to be held in March, he said.

Tourism in Bahrain has been hit hard by unrest that triggered a three-month state of emergency. GCC troops entered the country and governments warned their citizens against travelling to the kingdom.

Occupancy at hotels in Bahrain slumped to an average of 15 to 20 per cent in March, hoteliers said.

But there has been a gradual increase in occupancy since the reopening in April of the King Fahd Causeway linking Bahrain and Saudi Arabia.

"It's good news that the race is back," said Hemant Sharma, the sales, marketing and e-commerce general manager in Bahrain at the Ramee Group, which has 11 hotels in the country.

Bahrain's Gulf Air also cancelled a number of flights because of unrest in the country and elsewhere in the region.

The rescheduling of the race "is going to give back some confidence to everybody", said Michel Mandrea, the general manger of the Golden Tulip hotel in Manama.

"It's more about restoring confidence than the money itself. We will cash in a bit. We won't make up for the losses that we have seen throughout the last three months."

The 2008 Grand Prix in Bahrain attracted almost 100,000 spectators and generated $600m for the economy, according to a study commissioned by the Bahraini government. The race generated an estimated $116.8m of income from visitor spending on accommodation, food and beverage, shopping and travel, the study showed. The event brought in $13.8m from ticket sales and $36.7m from merchandise, food and beverage sales at the Bahrain International Circuit.

The race creates about 600 jobs directly and indirectly. The study found that 49 per cent of race fans visiting from overseas travelled with Gulf Air.

Mr Mandrea said he was hoping for 100 per cent occupancy at his hotel but added, "only time will tell".

"Whatever we had on the books before everything happened got cancelled, and people got their money back," he said. "If we achieve an 80 per cent occupancy, I think everybody would be grateful."

The Moevenpick's general manager is confident, however, that his hotel will be fully booked.

"We of course had a lot of bookings from March, which now we have to call them up and reconfirm," said Mr Kraehenbuehl. "All the hotels in fact were almost fully booked. There were lots of cancellations and down payments were made. We kept these down payments for some of the bigger groups and we told them 'you can come back once the race is back on track'. In my hotel, I'm probably full already over these five days from October 26 to 31 because there were bookings that we were holding."