Gulf Hotels Group managed to achieve good profit levels last year despite the political crisis that triggered in February having a major impact on the hospitality industry and the economy in general.

Despite some improvement in the second half of the year, the business climate remains extremely challenging and ongoing unrest continues to restrict international and regional visitors to the kingdom, according to Gulf Hotels Group chairman Farouk Almoayyed.

He said cost saving measures initiated by the Gulf Hotel's management had a major effect on limiting the damage to bottom line profitability and the hotel maintained good profit levels in an extremely difficult year.

The group achieved gross operating revenues of BD28.94 million ($76.7m) during 2011 compared to BD32.66m in 2010, a decrease of BD3.72 or 11.39 per cent. Net profit of BD7.82m represents a decrease of BD2.2m or 22pc on 2010, which gives an earning per share of 47 fils compared with 61 fils last year.

Based on the results, the board has recommended for the approval of shareholders a cash dividend of 30pc at 30 fils per share on the paid-up capital.

Almoayyed praised the management and all the subsidiaries for their efforts in achieving such positive results in a difficult environment.

Chief executive Aqeel Raees expressed satisfaction with the results and said almost all the group's divisions showed positive turnaround which indicated that the group succeeded in overcoming the current challenging business climate.

He said although revenue levels dropped during the first two quarters of 2011, profitability was maintained through effective cost reduction, while always upholding an excellent standard of service.

Raees said work had commenced on upgrading the hotel's high voltage intake, which will provide the additional power required for future expansion.

Approvals have been obtained for the construction of a new commercial laundry, with work expected to commence in the first quarter of 2012.

The additional power will also allow the development of a new 2,500 square metre top-of-the-range spa to proceed. Planning work is underway with construction expected to commence in the second half of the year.

The development of five executive meeting rooms will be completed early in 2012, taking the hotel's meeting room inventory to 27. CafŽ Delices, a new patisserie and cafŽ will open on the ground floor of the Gulf Executive Residence in the first quarter of 2012.-TradeArabia News Service