With its long history as a trading centre, its wildlife and its ancient forts and mosques, Bahrain has strong appeal to draw in visitors from near and far. Made up of more than 30 islands, the archipelago is easy access for people living in the Gulf region – making it a prime destination for short stays – and visitors are able to check in to one of the increasing number of four- and five-star hotels operating in the kingdom.
BY THE NUMBERS: Bahrain’s tourism sector – which is already an important sector of the economy – is considered a key area of potential growth, with a strong push under way to promote Bahrain as a destination for tourism investments. There are strategic plans in place to increase overall tourism revenue from $700m in 2015 to $1bn by 2020 (see analysis), and tourist numbers from 11.6m to 15.2m by 2018, with the eventual goal of 20m visitors per year.
According to a 2016 White Paper issued by the Bahrain Economic Development Board (EDB), comprehensive estimates put the direct impact of tourism to the national GDP at around 4% between 2011-14, rising to 5% in 2015. The indirect impact is thought to be much higher, at around 12% of GDP as of 2015, with the sector contributing roughly 40,000 jobs to the local economy. The World Travel & Tourism Council (WTTC) estimates that the direct contribution of travel and tourism to GDP was BD465.1m ($1.2bn) in 2015, 4.3% of overall GDP, with that figure expected to rise by 4.7% a year between 2016 and 2026 to hit BD771.8m ($2bn) by the end of that period. Direct and indirect revenue combined was estimated at BD1.1bn ($2.9bn) by the WTTC, roughly 10.6% of GDP in 2015, and forecast to grow by 4.8% annually until 2026.
According to the World Economic Forum’s “Travel & Tourism Competitiveness Report 2015”, Bahrain ranked 60th out of 141 countries when it came to the competitiveness of its tourism sector, but fared better in several other categories, coming 52nd in human resources and 18th in price competitiveness. Additionally, within the MENA region, Bahrain was positioned third – behind only the UAE and Qatar – which points to its strong competitiveness when it comes to the regional tourism sector.
According to a Central Informatics Organisation survey from the third quarter of 2015, visitors arriving in Bahrain via the causeway from Saudi Arabia spent an average of two days in the kingdom, with an average daily expenditure of BD114 ($302.39). Those arriving via the airport stayed five days on average, and spent an average of BD154 ($408.49) a day.
INTERNATIONAL ARRIVALS: With a population of a little more than 1.3m, Bahrain currently attracts almost 10 times its resident population in a given year. While tourist numbers have been growing, a 2016 report on the GCC hospitality industry by Alpen Capital found that Bahrain underperformed the region in terms of growth in international tourist arrivals. This was mainly due to the impact of the Arab Spring in 2011, which strongly affected the tourism market in the short term, with international tourist arrivals dropping more than 40% year-on-year. As of 2015 international arrivals have almost regained 2010 levels, hitting 11.6m, versus 12m in 2010.
Despite this, annual inbound visitor numbers have grown impressively since the turn of the millennium, up from around 4m in 2000. In addition, according to Alpen Capital, international tourist arrivals are expected to increase to 14.6m in 2020, with tourism and travel spending rising from $2.5bn to $3.5bn over that period. If the prediction proves accurate, international arrivals will have increased at a compound annual growth rate of 4.7% during the period.
A significant number of foreign visitors come from neighbouring countries. According to the Ministry of Interior, inbound visitors to Bahrain in 2014 came predominantly from Saudi Arabia (57.8%), with 3.4% coming from Kuwait, 1.2% from Qatar, and 0.6% from both Oman and the UAE. With an estimated 16m from people living within a four-hour drive of Bahrain, these markets are key for the kingdom’s tourism sector – both for the present but also when looking forward.
Other key target markets include India and China, which combined represent 17% of current tourists to Bahrain, followed by European and Russian visitors. At the same time, the WTTC estimates that domestic tourism accounts for roughly 31.4% of the total direct travel and tourism contribution to GDP.
OVERSIGHT: Tourism falls under the direction of the Ministry of Industry, Commerce and Tourism. As part of Bahrain’s Tourism Strategy 2015-18, a Supreme Council for Tourism was established. However, in 2015 a new organisation, the Bahrain Tourism and Exhibitions Authority (BTEA), was launched, replacing both the Bahrain Authority for Conferences and Exhibitions and the Supreme Council for Tourism. Operating under the Ministry of Industry, Commerce and Tourism, the BTEA is charged with promoting the tourism sector in Bahrain as well as implementing new hotel standards for the industry and marketing the country abroad. The latter is done in part by opening representative offices in the key markets of the GCC, UK, France, Germany, Russia, China and India.
Another key player in the tourism sector is Bahrain Mumtalakat Holding Company. The investment arm of the kingdom, it owns or holds major stakes in a number of tourism-related companies, namely Al Jazeera Tourism Company, Al Sahel Resort Company, Bahrain International Circuit, Bahrain International Golf Course Company, Gulf Hotels Group and the Southern Tourism Company.
VISAS: Bahrain has long had liberal visa policies, providing one-month visas on arrival to citizens of nearly 100 countries, with the flexibility to renew for another three months. In 2016 Bahrain adjusted its visa-on-arrival fees, reducing them from BD25 ($66.31) to BD5 ($13.26) for a single-entry visa valid for two weeks, and to BD25 ($66.31) for a multiple-entry visa valid for three months. In February 2016 Bahrain made e-visas available for the citizens of Côte d’Ivoire, Mozambique, Cameroon, Gabon, Senegal and Mauritius, with nationals of 113 countries now able to apply for visas online. This is part of efforts to further position the kingdom as an easy-to-visit tourist destination for people arriving from all over the world.
ENTRY POINTS: Bahrain’s transport links to neighbouring countries facilitate millions of visitors arriving to the kingdom every year, many crossing on the King Fahd Causeway between Saudi Arabia and Bahrain. Notably, the Saudi city of Jubail, population 220,000, is just 150 km away from Bahrain across the causeway, while the Eastern Province and Riyadh area, both within driving distance, have a combined population of 10m. In 2015 monthly causeway users reached 904,975, up from 821,657 per month in 2013. In February 2016 the Bahraini authorities announced plans for a major expansion of its Customs facilities at the 25-km causeway, with the project set to double capacity by increasing the number of Customs and immigration lanes from 17 to 45. The causeway, which first opened in 1986, currently carries around 27,000 vehicles every day. Future plans include a second causeway, the King Hamad Causeway, to the north of the existing one. The second causeway will comprise road lanes as well as a mixed-traffic, standard-gauge railway. The $3bn project is slated for completion in 2023, with an international passenger rail terminal able to provide quick and efficient service to Saudi cities including Dammam and Riyadh.
Meanwhile, arrivals to Bahrain International Airport (BIA) rose from a monthly average of 182,681 in 2013 to 216,623 in 2015, up 18.6%, according to the 2016 White Paper. The airport, which has an annual capacity of 9m passengers, is undertaking a $1.1bn expansion, which will raise its overall capacity to 14m passengers and is expected to be complete in 2020. The new 220,000-sq-metre passenger terminal is four times the size of the current airport, and will feature 9000 sq metres of duty-free retail space and 24 departure and arrival gates. Roughly 70% of the project’s financing is being provided by the GCC Fund, primarily the Abu Dhabi Fund for Development, with the remainder coming from the Bahraini government. Some 32 passenger airlines currently fly to and from BIA, linking the kingdom with 51 global destinations, and around 825 flights land and depart every week.
Port facilities are also being further enhanced for those arriving to the kingdom by sea. Bahrain saw 32 cruise liners dock during the 2015/16 season, bringing in a total of 68,000 passengers.
“We are continuing our focus on the development of access points, whether it is the airport, causeway or cruise port, in order to support the growth of the tourism industry,” Jerad Bachar, executive director of tourism and leisure at the EDB, told OBG. “BIA is currently undergoing a major modernisation programme which will see its annual capacity of 9m passengers increase to 14m by 2019. We need to be actively planning for the future, and we are witnessing this as well with the causeway; we expect the number of travellers to double in the next five to 10 years,” he added. “In the meantime, there are collaborative efforts under way to increase current causeway efficiencies for both passengers and cargo.”
ACCOMMODATION: As of 2015 Bahrain was home to 122 hotels, including 18 five-star hotels, 52 four-star hotels, 33 three-star hotels and 70 serviced apartments. According to Sheikh Khaled bin Humood Al Khalifa, CEO of the BTEA, speaking at a press conference in September 2016, the number of hotel rooms in the kingdom was 17,000 at that time and the figure is expected to rise to 20,000 by 2018.
According to the EDB’s White Paper, hotel revenue in the kingdom was worth BD153m ($405.8m) in 2010, dropping substantially to BD92m ($244m) in 2011, but has since climbed back up to BD142m ($376.7m) in 2015, representing 1.2% of GDP. Following the 17.2% dip in 2011, the sector grew by 11.2% in 2012, 5.6% in 2013 and 4.1% in 2014, before increasing by 7.3% in 2015. This was the fastest pace of expansion of any sector of the economy in 2015. The compound annual growth rate of the hospitality sector over the 2000-15 period was 9.3%, with hotels growing at an average rate of 7.2%. Hospitality growth is expected to hit 14.7% in the period to 2018.
TRIALS AHEAD: However, despite this steady expansion Bahrain’s hotel sector is facing challenging times. According to Alpen Capital, the occupancy rate of branded hotels in Bahrain fell to 53% in 2015, the lowest rate across the GCC region, citing the cause as lower corporate demand. This rate was down from 66% in 2010, but up considerably from 2011, when branded hotel occupancy stood at 34%. In March 2016 hotels in Manama saw revenues slump by nearly 7%, despite reducing their payrolls and overheads, with total revenue per available room down by 6.6%.
Even hotels that are doing relatively well with overall occupancy rates are finding the environment to be challenging right now. “Our average occupancy in the first eight months of 2016 was in the mid70s, a decline on the previous year,” Sarosh Aibara, chief operating officer at Elite Hospitality Group, told OBG. Elite Hospitality Group has seven properties in the kingdom, four of which are hotels and three are service apartments. “What is worrying me isn’t the decline in occupancy – that was to be expected with competition growing in the region – but that average room rates have gone down drastically. This is due to both competition, but also that Bahrain, like the rest of Middle East, is going through a squeeze due to low oil prices leading to a sharp decline in business from the corporate segment,” he said.
In addition, while room rates have dropped or remain steady, the government has doubled hotel levies and increased utility tariffs, affecting hotels across the board and making profitability more challenging. “Bahrain has new facilities coming up that are already in the pipeline, but I for one would be cautious to invest in a new property in Bahrain at this stage,” Aibara told OBG.
NEW TO THE SCENE: In recent years the four- and five-star hotel segment has grown strongly alongside the arrival of major international players. Nearly 70% of current hotels are in the four- or five-star category, with Four Seasons, Sheraton, Hilton and Ritz-Carlton all having properties in the kingdom.
In 2015 the Rotana Group opened the 311-bed, five-star ART Rotana Hotel at Amwaj as well as the 251-room Downtown Rotana in central Manama. That year also saw the launch of the Four Seasons Bahrain, offering 273 rooms, including 57 suites, as well as function rooms and a spa. The five-star Wyndham Grand at Bahrain Bay opened in the architecturally impressive United Tower in late 2016, while the same company’s Ramada brand operates two four-star hotels that also debuted in 2016: the 162-room Ramada Hotel & Suites Amwaj Island and the 140-room Ramada Manama City Centre.
At the budget end of the market, Ibis also recently opened a new 304-room hotel in Seef, in partnership with Kuwaiti group Action Hotels Management.
UP & COMING: In June 2015 it was reported that an agreement had been signed between International Trading and Investment Company and Marriott International for the $30m, 22-storey Marriott Residence Inn, located in the Water Garden City project in Seef. Meanwhile, Fairmont Hotels plans to open its first hotel in Bahrain in 2018, featuring 215 rooms and chalets. UAE-based Emaar Hospitality Group is reportedly planning five new hotels in the kingdom by 2018.
In January 2016 local investor Diyar Al Muharraq Development, in partnership with UAE-based Eagle Hills, announced a $3bn mixed-use waterfront project, Marassi Al Bahrain, which will feature a new urban centre complete with two luxury hotels: The Vida with 160 rooms and The Address with 110 rooms; as well as 3500 luxury apartments and shopping, leisure and entertainment facilities. Diyar Al Muharraq is also pushing forward with the second phase of its Al Bareh seafront development, with seafront and non-seafront residential plots available for high-end villas being sold on a freehold basis to locals and foreigners alike. Another development in the hotel segment is the expected opening of the country’s first One&Only resort down the street from the popular Ritz Carlton Hotel. Originally expected to open in 2016, it is now slated for completion in 2017.
HIGH-PROFILE EVENTS: In 2004 Bahrain became the first Middle Eastern country to host a Formula 1 Grand Prix, which has subsequently become perhaps the biggest event in the tourist calendar for the kingdom. Held at Bahrain International Circuit, which opened in 2004 at a cost of $150m, the sporting event saw record numbers in terms of attendance over the last few years, with 85,000 visitors in 2014 and around 92,000 in both 2015 and 2016. Estimates put the economic contribution of the event at $1bn in direct revenue since 2004. In addition to the Formula 1 Gulf Air Bahrain Grand Prix, the circuit also hosts the Fédération Internationale de l’Automobile World Endurance Championship Six Hours of Bahrain, as well as races in the GP2 Series and the Porsche Mobil 1 Supercup.
In 2014 Bahrain International Circuit installed a floodlight system, enabling it to host night races and thereby extending the racing season into the hotter summer months, when racing in the daytime is not possible. The circuit is also used as a venue for major non-racing events, including the Bahrain International Air Show, the Bahrain International Motor Show and the Challenge Bahrain triathlon.
GOLF & CRUISE LINES: Other sectors of the tourism industry that Bahrain is working to develop include cruise lines and golf. According to the EDB, in the 2015/16 season there were 32 calls to the kingdom from major cruise lines, carrying 68,000 passengers. This is scheduled to rise to 38 liners in 2016, and projected to hit 40 in 2017, pointing to steady expansion.
Sheikh Khalifa Bin Salman Port, opened in 2009, offers 110 ha of mixed-use port infrastructure and is designed to cater to every type and size of visiting cruise liner, while also offering a range of duty-free retail outlets to those visitors arriving on the ships. Bahrain also recently joined the Cruise Arabia Alliance, an initiative designed to promote the Middle East and specifically the Gulf region as a world-leading choice for winter cruises as well as ensure region-wide quality of services and standards for cruise passengers and staff. With this, the country joined the likes of Abu Dhabi, Dubai, Qatar and Oman in promoting its potential as a cruise destination.
Golf is also a growing sector of tourism business. While the country’s first golf course dates back to the 1930s when an 18-hole sand course was set up for workers at the Bahrain Petroleum Company at Awali, in recent years the kingdom has attempted to become a major international destination for golfers and golf enthusiasts. The Bahrain Royal Golf Club, opened in 2008, is Bahrain’s sole championship-standard 18-hole course. It offers golfers 7102 yards of lush terrain and was designed by professional golfer Colin Montgomerie. The club also has a par 3, nine-hole course. In 2011 the course hosted the World Volvo Golf Championship, followed a year later by the maiden Bahrain Invitational. In January 2014 the Bahrain Volvo World Golf Challenge was launched.
CULTURE & HERITAGE: Bahrain is home to two UNESCO World Heritage sites and numerous archaeological and historical sites. The kingdom is linked back to the Epic of Gilgamesh, the earliest work of literature, when the island is mentioned using the name Dilmun as the location of the Garden of Eden. Bahrain Fort, one of the main historical attractions in the kingdom, was named a UNESCO World Heritage site in 2005 with archaeological evidence indicating that the site was the capital of the Dilmun civilisation. The site is thought to date back some 4500 years, though the present building is more recent.
The Pearl Diving Trail, the kingdom’s other World Heritage site, pays homage to Bahrain’s long history of harvesting pearls. The trail consists of a 3.5-km path along the shores of Muharraq, a smaller island north of Bahrain Island, and links more than a dozen relevant buildings – including the former residences of rich pearl merchants – and three oyster beds. Other historic attractions in the kingdom include the Khamis Mosque, which is believed to be the first mosque in Bahrain and one of the oldest relics of Islam in the region, with the foundations estimated to have been laid as early as 692 AD.
NATIONAL BRANDING: In January 2016 the Bahraini capital, Manama, was named Capital of Gulf Tourism 2016, having held the title Capital of Arab Tourism in 2013 and nominated as Arab Capital of Culture 2012 as part of a UNESCO initiative. These moves are likely to help grow awareness of Bahrain’s cultural offerings, furthering the number of visitors who make the trip to explore the kingdom’s heritage. According to Zayed bin Rashid Al Zayani, the minister of industry, commerce and tourism, speaking in January 2016, Bahrain’s role as the Capital of Gulf Tourism is expected to boost intra-region tourism between Bahrain and the rest of the GCC by as much as 10-15%. Meanwhile the Spring of Culture festival, held annually since 2006, is now a major cultural event for the kingdom, featuring a series of concerts and performances by regional and international artists held throughout the spring months.
ECOTOURISM: With its natural heritage, Bahrain holds plenty of opportunity for ecotourism development. One of the main areas likely to be developed in the near future is the Hawar Islands, a group of 35 islands lying 20 km south-west of the main archipelago. Around 80% of Hawar’s land is a wildlife preservation zone, home to herds of Arabian oryx and sand gazelles as well as falcons, osprey, flamingos and one of the world’s largest flocks of Socotra cormorants, an endangered sea bird. In June 2016 Bahrain Real Estate Investment, the real estate arm of Bahrain Mumtalakat Holding Company, announced that it was set to invest BD350m ($928.4m) in the Hawar Islands project to transform it into an eco-friendly tourism destination. The plans include an environmentally minded development set along 100 ha of the island’s northern coast, with the first phase of the project seeing the opening of a 350-room, five-star lagoon resort and 150 eco-friendly apartments and villas. Follow-up phases will include a 150-room boutique hotel, a 200-room wellness resort and spa, 155 villas, a bird research centre, a heritage market and the restoration of the 100-year-old Hawar mosque.
PRESERVATION: In 2014 Bahrain announced plans to create one of the world’s largest offshore preservation sites, the Northern Heyrat Preserve, covering an area of 1350 sq km and including four natural pearling sites situated off of the north coast of the kingdom. The project would serve as an alternative tourist offering from traditional luxury travel as well as safeguard the kingdom’s maritime ecosystem. According to the UN Environment Programme West Asia coordinator, Fouad Abousamra, speaking at the time, the preserve could boost tourism and create economic benefits, potentially adding up to $227bn to the Bahraini economy, with up to $287m of that related to tourism, recreation and research. “That is the site’s value in terms of cultural, economic, social and global environmental services,” he said.
Other potential sites for development as ecotourism destinations include the mangrove swamp at Tubli Bay in the east of Bahrain, which extends for over 430,000 sq metres and features mangroves up to 3.5 metres high, as well as rich marine and bird life. In 2007 the wetlands were placed on a UN list of Wetlands of International Importance, however, there are growing concerns over the future of the wetlands, which in the past have been under threat from illegal land reclamation.
BEACHES: For an island nation that receives 3350 hours of sunshine a year, has mild winters and water temperatures that rarely drop below 20° C, Bahrain has struggled in the past to develop its beaches to the extent of bringing in high volumes of international tourists. However, in recent years greater focus has been given to coordination between the authorities and the private sector, which is expected to result in an increase to the quantity and quality of public beaches, as more resorts are developed. Still, work remains to be done before Bahrain is established as a beach destination. “A lot more needs to be created to keep people here in Bahrain for more days. We have got to create the beach destinations, which we sadly lack. We have the beaches but they are not developed, and don’t have the facilities,” said Elite Hospitality Group’s Aibara. “We have also got to create events that will bring people in,” he added.
In September 2016 Sheikh Khaled bin Humood Al Khalifa, CEO of the BTEA, announced that tenders for the development of Al Jazair, Bahrain’s biggest public beach, would be invited shortly. “Designs for Bahrain’s biggest beach have been completed and plans are under way by Edamah, the government’s real estate arm, to have an investment project there, which will be tendered soon,” he said. This could prove to be an important development when it comes to establishing Bahrain as an attractive beach destination.
MICE: According to Alpen Capital, one in every three tourists coming to the GCC region does so for business purposes. This makes the regional meetings, incentives, conferences and exhibitions (MICE) sector, which was worth an estimated $1.3bn in 2015, an enticing one. Bahrain is eager to improve its position in the market against neighbouring competitors.
The main destination for MICE in Bahrain is the Bahrain International Exhibition and Convention Centre, initially an 8000-sq-metre exhibition facility opened in 1991. The centre was first expanded in 1999 with a second hall adding 6000 sq metres of space, and again in 2003 with a convention centre opening up 1400 sq metres of meeting space. The facility is run by the BTEA, and hosts major events such as the Jewellery Arabia fair, which attracts over 50,000 visitors every year, the Bahrain International Book Fair and the Autumn Fair. Meanwhile, many of the major four- and five-star hotels operating in Bahrain have conference centres and related facilities of their own.
Bahrain’s new tourism strategy, launched in 2016, includes plans to construct a new 40,000-sq-metre exhibition facility which would be capable of hosting major events of over 5000 people and could help reshape the MICE landscape in Bahrain. “There are plans for a new exhibition and conference centre, and the new hotels coming in all have conference facilities in them,” said the EDB’s Bachar. “We are also looking at corporate style retreats and types of team building events and activities.”
HEALTH TOURISM: At present, health tourism to Bahrain is minimal, but in the coming years it could become a lucrative niche segment for the tourism industry. Bahrain has lower health care and procedure costs than most of its neighbours, while maintaining a comparable skill level among its medical staff. This combination could help Bahrain become a destination of choice for those seeking non-urgent or cosmetic procedures and surgeries.
In the second quarter of 2015, 1% of inbound visitors arriving via the causeway came for the purpose of health care, according to a Central Informatics Organisation tourism survey. For airport arrivals it was 3%, though that number rose to 8% in the third quarter of 2015, with the EDB estimating that health tourism was worth some BD9m ($23.9m) using 2014 GDP figures. According to a February 2016 report by the Ministry of Health, the majority of inbound patients seeking medical treatment in Bahrain in 2015 were Saudi nationals, around 58% of the total, with others coming from Qatar, Kuwait, Iraq and Yemen.
WORKFORCE: According to the EDB, sectors with significant elements of tourism-type activity employed just over 250,000 people in 2015, with the number of tourism-related jobs estimated at just over 42,000. These jobs are primarily in the hospitality industry, with hotels and restaurants employing 38,407 people in 2015, up from 32,329 in 2010, according to the Labour Market Regulatory Authority.
As Bahrain pushes to expand the size of its tourism sector, the kingdom is looking to develop higher standards of service and more training opportunities. “Bahrain has one of the most integrated and skilled workforces in the GCC region and development of Bahraini talent continues,” Bachar said. “A lot of emphasis is being put on workforce development. For example, the Ministry of Industry, Commerce and Tourism is evaluating opportunities for the establishment of a hospitality and a culinary academy in Bahrain. In addition to this, local education organisations are continually exploring opportunities for the expansion of their offering in tourism- and hospitality-related programmes,” he added. “A lot of work is being done, and we must continue to provide awareness of the sector so that individuals are able to understand career path development in tourism. The opportunities in the modern industry are vast, including hospitality, airlines, marketing, technology, finance and leisure activities.”
At present, hotels and tourist-related companies operating in Bahrain are able to apply for training and subsidies from Tamkeen, a government agency that offers vocation training and grants to Bahrainis to enable them to better compete in the labour market. Skills sets targeted include foreign language proficiency, IT capabilities and management training. In addition, the Bahrain Institute of Hospitality and Retail, a private institution founded in 1999, also provides training courses in hospitality management.
OUTLOOK: Despite challenges related to hotel occupancy rates, the tourism sector in Bahrain is seeing healthy growth. With the arrival of major international players and the expansion of various access points to the kingdom, not to mention cheaper and more easily obtained visitor visas, there is a lot for those involved in the tourism sector to feel positive about.
You have reached the limit of premium articles you can view for free.
Choose from the options below to purchase print or digital editions of our Reports. You can also purchase a website subscription giving you unlimited access to all of our Reports online for 12 months.
If you have already purchased this Report or have a website subscription, please login to continue.