Hotel occupancy in Bahrain plunged as low as 5% due to violence in the country, according to a new report released by CB Richard and Ellis.
Hotel launches across Bahrain have also been delayed because of civil unrest.
The cancellation of the Formula 1 Grand Prix in February 2011 is also thought to have had a negative impact on hotel occupancy rates.
Several hotels that were expected to open in time for the motoring event have postponed their openings to mid-2011.
The report states that hotels in Bahrain are achieving occupancy rates of 5-10% after being ranked second in the region for its tourism and travel competitiveness by the World Economic Forum.