With tourism tipped to be an important driver of growth and recovery in the wake of the Covid-19 pandemic, the sector is projected to play a major role in wider economic expansion and attracting investment in the kingdom. Bahrain has several large-scale projects in the pipeline that are designed to position the country as a top destination in the region, leveraging its location in the Gulf between Qatar and Saudi Arabia, as well as its natural environment. As an archipelago with 33 white sand islands, it is the only island country in the Middle East. The sector was heavily impacted by the pandemic, but officials used the lull in visitors to rethink the tourism strategy, with a view to attracting larger numbers and a more diverse range of tourists.
New Strategy
In November 2021 the Ministry of Tourism and the Bahrain Tourism and Exhibitions Authority (BTEA) launched a strategy for 2022-26 that has four main objectives: to increase the sector’s contribution to GDP to 11.4%; to position the country as a major global tourist destination; to expand on existing source markets, in turn attracting higher numbers of tourists; and to diversify its tourism offerings. As part of these broader objectives, the authorities are seeking to attract over 14.1m tourists each year and boost average daily visitor spending from BD71 ($188) in 2019 to BD74.80 ($198), as well as increase the average tourist stay from 3.4 days to 3.5 days over the same period. To achieve this, the authorities are easing entry requirements for visitors; diversifying and developing attractions; marketing and promoting tourism in partnership with national carrier Gulf Air and the private sector; and improving the quality of accommodation across the country.
The plan identifies seven segments of the tourism industry for their potential to contribute to wider economic growth: marine, business, sport, recreational, medical, cultural, and media and cinematography. It prioritises projects that support these niche segments, including the Bahrain International Exhibition and Convention Centre in Sakhir, which will be a significant asset for the meetings, incentives, conferences and exhibitions segment. Other projects outlined in the plan include the 170,000-sq-metre Bahrain Bay beach project that was inaugurated in November 2021, the Qalali Coast Waterfront Project and several other resorts.
The strategy builds on the success of the sector’s previous 2016-19 strategy, during which tourism’s contribution to GDP rose from less than 4% in 2015 to almost 7% in 2020. The initiative saw total expenditure from tourists increase from BD1.1bn ($2.9bn) to BD1.5bn ($4bn) over the period, with the number of annual tourist arrivals increasing from 9.7m to 11.1m. The BTEA itself was created during the implementation phase of the 2016-19 strategy, with the agency overseeing the rebrand of the country as a headline tourism destination.
In February 2022 members of Parliament approved a proposal to replace the Tourism Law of 1986 with updated legislation that more closely aligns with the 2022-26 sector development strategy. The Ministry of Tourism and the BTEA have announced that they are working on the new legislation.
Core & Emerging Markets
In February 2022 the BTEA released plans to attract more GCC and international tourists through an integrated programme of activities that will include food festivals, Bahrain Design Week, a pop-up parade and a range of other events. These efforts will be facilitated by the finalisation of some 49 marketing agreements with tourism operators in 16 countries. Among these are well-established tourism markets, such as Saudi Arabia, Kuwait and the UK, as well as emerging source markets including the UAE, Egypt, Turkey and Israel. Expanding the tourism sector’s reach is expected to have positive flow-on impacts on the wider economy by generating additional revenue and creating both direct and indirect jobs.
Infrastructure Development
Efforts to diversify tourism offerings go hand in hand with the government’s Strategic Projects Plan, released in November 2021. The Strategic Projects Plan is designed to boost economic growth, create jobs for Bahrainis and attract $2.5bn in foreign direct investment by 2023. It provides $30bn for investment in infrastructure, with the sector set to benefit from improvements in ICT and transport links. Among its 22 projects are the Bahrain International Exhibition and Convention Centre; a 183-sq-km offshore city of Fasht Al Jarim, which will contain residential, logistical and tourism facilities; a new 109-km metro network with 20 stations in the first phase; and the new 25-km King Hamad Causeway, which will facilitate greater volumes of visitors.
“Private sector growth in the tourism and entertainment sectors will be driven forward by infrastructure and telecommunications investment, with connectivity both within the kingdom and overseas elevated for the efficient movement of goods, services and people,” Sheikh Salman bin Khalifa Al Khalifa, the minister of finance and national economy, told local press in November 2021. Such infrastructure development plans are expected to support increased tourism inflows from key source markets such as Saudi Arabia and India, and newly targeted visitors from countries like Turkey and Israel.
Promotion
The BTEA has traditionally created dedicated tourism-promotion offices in target markets, but under the 2022-26 programme, the agency will shift its offices to Gulf Air sales points around the world. While many of the agency’s offices will be shifted to the national carrier, it will continue to have offices in Saudi Arabia, India and the UK – three of its largest source markets. As part of the agreement, in February 2022 the two parties launched the Gulf Air Holidays platform, which allows passengers to book flights, hotels and event tickets at discounted prices. The aim of the platform is to attract more visitors by highlighting the variety of tourism and entertainment activities on offer.
This shift builds on the success seen in the April 2021 campaign, during which the two parties promoted the country as a destination to French and German tourists. That month Gulf Air and the BTEA signed a memorandum of understanding to enhance their partnership in a bid to attract tourists to Bahrain as a holiday destination or as a multi-day transit stop before reaching their final destinations. European-based teams collaborated on pricing, distribution, digital marketing, press trips and media engagement, headed by newly appointed sales and marketing executives based in Paris and Frankfurt.
Neighbouring Markets
Efforts to diversify offerings and source markets, as well as draw higher numbers of visitors, are taking place as neighbouring countries also look to bolster their tourism offerings. Nearly 97.6% of the country’s inbound visitors in 2021 came from GCC countries, highlighting the impact that such development could have on Bahrain’s tourism industry. Saudi Arabia alone accounted for 88.9% of arrivals that year, making it the largest source market by far. In line with its Vision 2030 diversification plan, Saudi Arabia is developing its own tourism industry, targeting 100m visitors a year by 2030. Saudi Arabia’s enhanced cultural and entertainment offerings are expected to draw not only international tourists, but domestic ones as well. This could cause some Saudi tourists who would normally visit Bahrain for entertainment such as malls, cinemas and resorts to travel closer to home. The pandemic and closed borders through May 2021 hastened this trend, with residents fuelling domestic demand in that country. Indeed, between 2011 and 2019 Saudi Arabia’s number of domestic tourists nearly doubled, from 10.2m to 19.8m.
Kuwait, which was Bahrain’s third-largest source market in 2020, is similarly looking to boost its tourism, with the Kuwait Touristic Enterprises Company announcing in September 2021 that it would redevelop 11 projects, including waterfront marinas, hospitality facilities, and parks and family entertainment venues. Both the UAE and Qatar are expected to receive an influx of international visitors in 2022, as the nations host Expo 2020 Dubai and the 2022 FIFA World Cup, respectively.
Nevertheless, while tourism investment in neighbouring countries could increase competition, it could also serve to raise the international profile and attractiveness of the region as a whole to tourists beyond the GCC. This should result in larger inflows of visitors from a wider variety of destinations. Taking into account Bahrain’s existing transport links, hospitable culture and plans to improve intra-regional transport connectivity even further, the country is well positioned to capture a significant share of these increased visitors to the GCC region.
