The islands of Bahrain have been drawing visitors to their shores for centuries. Known as Dilmun in The Epic of Gilgamesh and Tylos by the ancient Greeks, Bahrain today is one of the Gulf’s leading centres for tourism. The country is an established stop on the Formula 1 Grand Prix circuit, as well as an important destination in the region for the meetings, incentives, conferences and exhibitions (MICE) sector. For such events the kingdom is seen as gateway to customers and attendees from Saudi Arabia’s Eastern Province. Indeed, weekend and holiday visitors from surrounding GCC countries are the largest contributor to the tourism sector, the majority of which are from Saudi Arabia. According to figures from the immigration authorities, in 2013 89% of all GCC arrivals were from Saudi Arabia.
Saudi Arabia’s Eastern Province is only a short drive away from Manama. Additionally, Bahrain’s location in the centre of the Gulf means it is within an hour’s flight from most of the GCC’s major cities, another factor which increases weekend travel. Saudi Arabia’s addition of a new secular holiday in 2012 and its switch to a Friday-Saturday weekend in line with the rest of the GCC have further boosted the number of weekend visitors. Some holiday weekends see more than 250,000 visitors enter Bahrain via the King Fahd Causeway.
The Numbers
According to the World Travel & Tourism Council (WTTC), the total tourism contribution to GDP in 2013 was BD1.23bn ($3.26bn), or 10.2% of GDP. The WTTC forecasts that tourism’s total contribution to GDP will rise by 7.6% in 2014 and thereafter by 5% per annum until 2024. This growth will be driven by increasing amounts of capital investment in the sector, which reached $556m in 2013. According to projections released in May 2014 by the Bahrain Institute of Hospitality and Retail, the local hospitality sector is on course to grow 7.6% year-on-year (y-o-y) in 2014. In terms of the country’s global standing, Bahrain ranked 55th in World Economic Forum’s “Travel and Tourism Competitiveness Report 2013”, which positioned the island nation third among all MENA countries behind the UAE (28th) and Qatar (41st), but ahead of Oman (57th), Jordan (60th) and Saudi Arabia (62nd).
Strategic Planning
The Directorate of Tourism, a division of the Ministry of Culture (MoC), is the primary government authority tasked with developing tourism in Bahrain. In June 2014, the body unveiled its sector plan, known as the Bahrain Tourism Strategy 2015-18, which calls for a number of medium-term goals. Key among them is to develop package tourism experiences and to establish a Supreme Committee for Tourism. Another important entity is Mumtalakat, a state-owned holding company, which has made several strategic investments in recent years to develop tourism. The most prominent of these was the establishment of Bahrain International Circuit (BIC), which opened in 2004 and host’s the annual Formula 1 Grand Prix event. Mumtalakat is also partnering with Kony, a Swiss-based destination management group, to help bundle tourist service and activities. The plan calls for the development of package tourism experiences. A potential visitor could easily spend one day enjoying the natural beauty of Hawar Island and the next day retracing the footsteps of jewellery designer Jacques Cartier, who visited Bahrain in 1911.
Manama, the country’s capital city and main urban area, was declared the Arab Capital of Culture for 2013. The event was broken into four different seasons focused on various types of tourism, including cultural, sport, leisure and ecotourism. Building on that successful year-long event, Manama was subsequently named the first-ever Capital of Asian Tourism at the Asian Cooperation Dialogue Forum (ACDF) in November 2013. As the 2014 Capital of Asian Tourism, Manama hosted a “Year of the Arts” series involving the MoC and the embassies of Asian nations in Bahrain. In parallel, major exhibitions have been held throughout the year from a variety of countries. According to the MoC, the transition from Arab to Asian tourism capital demonstrates the country’s multicultural identity as well as the ACDF’s goal of bringing together regional organisations in Asia.
New Investment
Bahrain is currently making large-scale investments in its infrastructure that will help drive growth and investment in tourism. The country’s $980m airport expansion will increase the capacity of Bahrain International Airport (BIA) to a total of 13.5m passengers per year, as well as greatly expand the services currently available. At present, the airport handles 9m passengers per year through 724 flights a week that connect BIA to 44 other cities.
The airport expansion is in line with Bahrain Economic Vision 2030, the country’s long-term national development plan, which also calls for extending the King Fahd Causeway to Saudi Arabia, as well as introducing an integrated mass transit system to include light rail, bus rapid transit and a monorail service. The planned network will include stops in the vicinity of all of Bahrain’s principal tourism attractions.
One such attraction is the Lost Paradise of Dilmun, a $50m water park that opened in September 2007. The 77,000-sq-metre site is the largest standalone water park in the Middle East, and is one of several properties held by joint-venture group Al Areen Holding Company (AAHC) in Bahrain. In May 2014, expansion plans for the water park and the nearby five-star Al Areen Palace and Spa Hotel were announced as part of the Al Areen city development project. The water park will receive new attractions, an interactive educational component and a new operating company, while the Al Areen Palace and Spa Hotel will be upgraded with the addition of a clinical spa and spa therapy training centre. The announcement follows US firm Avenue Ventures’ acquisition of a 35% stake in AAHC.
Shopping is another leading draw for tourists visiting the kingdom. Bahrain City Centre, the largest mall in the country, features 330 retail outlets, two movie theatres, and its own indoor and outdoor water park. In addition, a new mall in Muharraq is currently under construction that will offer shops, an amphitheatre and a pedestrian corniche, adding to Bahrain’s attraction as a retail destination.
Hotels
In 2013 Bahrain received a total of 835,596 hotel guests and 1.5m overnight stays. As of 2014, the country had 105 hotels and a total bed capacity of 15,501, according to figures from the MoC. They range from one-star hotels aimed at budget travellers to high-end luxury brands, with high-end suites reflecting an emphasis on luxury in Bahrain’s hotel sector. Roughly 70% of the country’s total hotel stock is classified as luxury four- and five-star offerings, thus it is not surprising that Bahrain possessed the Gulf region’s second-highest average daily room rates in 2013.
Hotels in the five-star category saw as much as a 35% increase y-o-y in occupancy rates in 2013. Total average occupancy rates rose from 33% in 2011 to 43% in 2013, according to the Bahrain Tourism Strategy 2015-18. As part of its efforts to upgrade the standard of hotels, the government has banned the serving of alcohol in three-star hotels. Hotels in the two- and one-star categories are already banned from serving alcohol or staging live entertainment. To further raise the occupancy rate the MoC has targeted domestic hotel bookings. In May 2014 the MoT reached an agreement with the kingdom’s luxury hotels to give all nationals and expatriates with residency in the country a 20% discount on room reservations. Similar moves have been launched by other hotels in Bahrain.
Ambitious Plans
Illustrating the scale of the kingdom’s plans for the sector, more branded hotels are set to be built in Bahrain than in Kuwait and Lebanon combined. According to the Directorate of Tourism, at the end of 2013 there were 14 internationally recognised five-star hotels operating in the country following the opening of the Ramee Grand Hotel and Spa in the Seef area that year. In addition, a new Swiss Belhotel opened its doors at the start of October 2014, also in Seef, and in the medium term, five new international hotels are set to open over the next few years.
A 260-room Wyndham Grand Manama will begin full operations by the end of the year, becoming the showcase property in Bahrain for the hotel group, which already controls six local properties.
The Bahrain Bay Four Seasons Hotel is scheduled to open in early 2015. The hotel is planned as a resort hotel with nearly all of the 273 guest rooms and suites in the tower offering views of the Gulf or the Bahrain Bay development, of which the hotel is a centrepiece. The hotel will also boast a number of gardens, pools and a spa, and its six meeting rooms will all offer sea views. The 68-storey property is one of several new Four Seasons branches opening in the GCC region. The luxury hotel group has plans to add new hotels in Dubai, Abu Dhabi, Oman, Jeddah, Qatar and Kuwait in the next two years, with the Middle East and Africa currently providing 25% of the hotel group’s revenue.
Also slated for Bahrain Bay is a JW Marriott Hotel, which is on course to commence operations in 2016. This new 50-storey hotel will be operated by Marriott International and will feature some 274 rooms and 102 residences, respectively.
Consolidation
Bahrain’s hotel market is also seeing consolidation. American hotel and leisure company Starwood Hotels and Resorts Worldwide announced plans in April 2014 to acquire new properties in the kingdom. Starwood is aiming to take over a two-tower hotel property connected to Bahrain City Centre from Kempinski Grand. The existing Kempinski Grand and the Ixir Hotel are expected to be rebranded as a Sheraton and Le Meriden, respectively. The Kempinski Grand originally opened in 2011, while the Ixir Hotel has been open since March 2013.
To remain competitive, operators of unbranded hotels told OBG that online bookings are becoming increasingly important. “There will always be people who no matter where they travel stay at the same hotel chain. However, these days online booking can offset the brand effects to some extent,” Anthony Poulose, HR and operations manager of One Bahrain Hospitality, told OBG. Online travel groups Trip Advisor, Booking.com, Expedia.com and Dubai-based Agoda.com are valuable and growing sources for hotel bookings. “These internet sites also make it important for hotel operators to ensure guests leave positive feedback on their experience,” he said. Poulose added that 25% of bookings are generated online, a figure that is growing at 2% a year.
To this end, the MoC has also begun using new social media analytics and information technology solutions to enhance the monitoring of hotel quality in the kingdom, according to Sheikh Khaled bin Humood Al Khalifa, assistant undersecretary for tourism. “The tourism sector launched an initiative to monitor and upgrade hotel service quality by analysing guests’ social media comments and reviews about Bahrain tourism. The outcome of the analysis report is shared with all hotels to increase and upgrade products and services,” he told OBG. Following the launch of this new programme in 2014, a three-star hotel was upgraded to four stars in part due to its positive feedback from customers.
Mice Sector
The Bahrain International Exhibition Convention (BIEC) centre is the primary venue for large-scale indoor events in the kingdom, including concerts and trade shows, among others. The combined 18, 000-sq-metre facility can be separated into smaller segments and also has a number of ancillary support rooms. The biggest events on the calendar in terms of visitors are the Autumn Fair, Jewellery Arabia and the Bahrain International Book Fair (BIBF). The 2014 BIBF coincided with the Formula 1 Grand Prix to give visitors the opportunity to attend both events. Jewellery Arabia typically sees 50,000 visitors per annum and vendors from more than 30 countries. It usually runs from late October to early November, although 2014’s event took place from November 18-22. The Autumn Fair, meanwhile, which is supported by the Ministry of Industry and Commerce, includes 700 exhibitors from 20 countries. Roughly 25% of the visitors to the BIEC’s large exhibitions tend to be from Saudi Arabia.
While the BIEC meets current MICE demand in Manama, plans for a new exhibition centre are in the works. Exposition City is expected be built in Saqir, close to the BIC. At the time of writing in late 2014, however, no timetable for the project had yet been finalised.
Cultural Sites
Bahrain is a rarity among GCC states in that the country has been awarded two UNESCO World Heritage sites: Bahrain Fort and the Pearl Diving Trail. Although the Bahrain Fort is sometimes known as the British Fort, the site is far older than any modern nation state, with its foundations dating back at least 4500 years. The site was once the capital of the Dilmun civilisation. The second UNESCO World Heritage site is the Pearl Diving Trail on the island of Muharraq. Included on the UNESCO list in June 2012, the site is testimony to the importance Bahrain’s pearl diving once held for the global economy. The trail is not a single site like most UNESCO World Heritage listings, rather it consists of 17 buildings and three oyster fields spread along a 3.5-km path. Yet beyond these two sites other important local tourist attractions include Umayyad-era mosques, ruins and burial mounds associated with the Dilmun civilisation, and a number of forts and souqs.
Ecotourism
Bahrain is also looking to unlock the rich potential for ecotourism. Indeed, one of the country’s most-well-known tourist attractions is an ecological one. The “Tree of Life”, which is located in the south of Bahrain and draws around 50,000 visitors a year, is believed to be 400 years old, and recent archaeological work has uncovered ruins of a fort near the site that is perhaps 500 years old. In 2007 a fence was put around the tree, with a full upgrade of the site completed in early 2014. The $786,800 project includes an amphitheatre, viewing area, kiosks and smaller attractions, all financed by Bahrain Petroleum Company.
Beyond the desert, the country’s mangrove swamp at Tubli Bay is listed under the Convention on Wetlands of International Importance, known more widely as the Ramsar Convention, which is an intergovernmental treaty that provides a remit for the conservation and responsible use of wetlands and their resources. The site can be enjoyed by kayakers during high tide and includes around 430,000 sq metres of mangroves, some of which can reach over 3.5 metres in height.
The area with the most ecological potential when it comes to tourism, however, is the Hawar Islands and the wider Bay of Bahrain. Though the kingdom has so far been unsuccessful in its efforts to get the 16 Hawar Islands listed as a UNESCO World Heritage site over the last decade, the area’s unique ecology has the potential to become an important ecotourism destination. The islands are home to numerous birds of prey, gazelle, oryx and the world’s largest colony of Socotra cormorants, an endangered seabird native to the Gulf.
Island Heaven
An international ruling in 2001 gave Bahrain control of the islands and the country recently began to attract investment in building up tourism in the area. The site is a short, 25-km ferry ride from Manama, with Hawar Island, the largest of the islands, home to a Best Western International resort which is owned by the Southern Area Development Company (SADC), a subsidiary of Mumtalakat. The resort reopened in early 2014 after undergoing extensive renovation. SADC has announced plans to add 100 rooms to the facility, which would increase capacity to 140 rooms, as well as open new restaurants and event rooms.
The area also offers significant diving potential. Indeed, the Bay of Bahrain which surrounds the Hawar Islands is home to rich coastal waters and diverse maritime species including dugongs, dolphins, as well as whale sharks, for which it is a primary breeding ground. In early 2014 the kingdom moved forward with the development of the Northern Heyrat Preserve, a 1350-sq-km underwater park that includes four traditional pearl diving areas. The move will help to increase the country’s appeal to ecotourism enthusiasts, as well as protect the fragile underwater ecosystem. The project is set to be launched in 2015, with UN Environment Programme experts estimating that the site could eventually contribute up to $287m in tourism revenues.
Reef Arabia, based in Bahrain’s Hidd Industrial Area, has installed a number of artificial reefs in Bahrain that have the potential to improve diving in the area by providing a home for local aquatic life. Reef Arabia’s unique 3D-printed installations are the only ones currently approved for use across the GCC.
Beaches
The kingdom also has potential to further develop its position as a beach tourism destination. The average daily maximum temperature in January is 20°C with an average minimum of 14°C. The water temperature in the colder months is warm enough for bathers, with November temperatures averaging 25°C. Bahrain boasts 3353.6 hours of sunlight per year. Even in January, the coolest month in terms of temperature, the country averages 226.3 hours of sunshine, ensuring water temperatures rarely drop below 20°C.
The country has taken steps in the last decade to expand access to local beaches. As part of Bahrain’s National Day 2008 celebrations, for example, a public beach near the Arrad Fort on Muharraq was opened, allowing bathers and paddlers to enjoy the waters at a historic location. Moreover, the Diyar Al Muharraq project, an ongoing large development initiative, plans to include several new public beaches.
Travel Agents
At an international level, travel agents in Europe and the US are facing increased competition from online operators as well as airline companies themselves, which have sought to make it even easier to deal directly with customers.
While in OECD countries corporate travel is for professionals and executives travelling in business class, it is different in Bahrain and the rest of the GCC. The majority of the workforce in Bahrain is expatriate and they receive flights to and from the kingdom as part of their employment contracts.
Expatriate executives in Bahrain are given as many as four flights a year in addition to business travel. Dealing with hundreds or even thousands of aeroplane tickets to and from Bahrain for employees as part of a company’s contractual obligations is a labour-intensive process. As a result companies often prefer to work with a trusted travel agent to manage these flights. In addition, travel agencies can also provide after-sales service and purchase on credit.
Outlook
The strong growth of Bahrain’s tourism sector is likely to continue in the future given ongoing investments in hotels and infrastructure. Bahrain will see the opening of five international hotels in the next few years and the ongoing expansion of BIA, as well as several other infrastructure projects. These include the development of a mass transit system connected to the pan-GCC railway, which is due to be completed by 2018 (see Transport chapter). Such projects will better connect Bahrain to both regional and global visitors.
The kingdom not only hosts cultural attractions, but it also has the potential to be an important beach and ecotourism destination as well. More can be done to promote the country as a winter destination for tourists from Europe, Russia and Central Asia. Economies of scale could be achieved by Gulf Air, the national carrier, offering packages vacations to visitors.
In January 2014 Czech Airlines announced the launch of direct flights to the country from Prague. The airline became the third European carrier to fly to BIA after Lufthansa and British Airways, respectively. In the long term a tourist zone may possibly be established to include restaurants and resorts, among other facilities, on one of Bahrain’s 33 islands.
Beyond the abovementioned strategies, the MoC also realises that the packaging and the promotion of local attractions are equally important in attracting visitors. Sheikh Khaled told OBG, “The Bahrain Tourism Strategy 2015-18 will help ensure that the kingdom remains an authentic and boutique experience within the GCC, while opening new opportunities for investors to play a role in the tourism sector in the country.”
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