Real estate investors will pour $10bn into the hospitality sector in Bahrain by 2020, according to the Economic Development Board of Bahrain (EDB), as a raft of new luxury hotels and resorts is built across some of the country’s 33 islands. The developments will cater to people looking for anything from a downtown retail excursion to a relaxing spa break, conference location or eco-friendly retreat. The EDB notes the new stock will add to the 190 hotels and resorts currently operating in Bahrain. It says the kingdom had 15,800 keys in operation in 2017 including 4550 in five-star hotels, 8000 in four-star hotels, 3250 in one- to three-star hotels and 3000 in hotel apartments. Bahrain’s hospitality offering includes internationally renowned brands the Four Seasons, ART Rotana, Amwaj Islands Hotel and Resort, Downtown Rotana, the Westin and Le Meridian Bahrain City Centre. The new supply is coming on-stream at a challenging time for the region, but developers clearly see brighter times ahead.
CHALLENGES: From congestion on the King Fahd Causeway to austerity measures by the governments of its oil-producing neighbours, there are a number of underlying factors that have created a challenging climate for Bahrain’s hospitality sector. Bahrain’s hoteliers have known better times. According to the real estate consultancy CBRE, Manama hotels had average occupancy levels of 53% in the first half of 2017, under-performing against the regional average of 60%. The EDB’s 2016 white paper on tourism pointed out that those hotel occupancy levels have crept up, but have yet to regain the levels enjoyed before the 2011 Arab Spring, after which visitor numbers to Bahrain fell away sharply. For the owners and managers of existing hotels, the introduction of 5100 new five-star keys by 2021 may be yet another cause for concern, as competition in a subdued marketplace looks set to intensify.
OPPORTUNITIES: However, with a slightly longer-term perspective, the developers behind the new properties being built, many of which are at the luxury end of the market, clearly see potential for a renewed appetite for leisure and relaxation among wealthier citizens of the Gulf’s oil exporting economies in the mid term.
The kingdom may feel the benefit of any improvement in crude oil prices, but improvements to its airport terminal and construction of a second causeway to Saudi Arabia have the potential to significantly boost visitor numbers. The planned construction of a new exhibition centre at Sakhir, with a built up area of 100,000 sq metres when its second phase is completed, will further boost the meetings, incentives, conferences and exhibitions market. “Another major trend we are seeing is in the development of branded, serviced apartments,” Jerad Bachar, executive director of tourism and leisure at the EDB, told OBG. “These apartments account for a large part of our hotel and restaurant sector growth, up 3% last quarter, with several new venues due to open by 2020.”
NORTH BY NORTHWEST: Along the north and north-western shores of Manama, adjacent to many of the country’s government ministries, a transformation is taking place. The Avenues Mall, with dozens of cafes and restaurants overlooking the bay, has views across to the Four Seasons Bahrain Bay, which has 273 guest bedrooms including 57 suites. The Four Seasons, which is built on a man-made island, opened in 2015. Another tower rising over the bay will become JW Marriott’s first Bahrain hotel when it opens in late 2019 with 261 guest rooms and 80 residences arranged over 35 floors. The site is being developed by Khaleej Capita.
Also overlooking the bay will be the Wyndham Grand Manama, a 260-key property being built as part of a mixed-use development in Bahrain Bay. The new hotel will have swimming pools, infinity pools, male and female spas, and five food and beverage outlets. The hotel will also face Bahrain’s iconic World Trade Centre, giving guests easy access to Bahrain’s business district as well as shopping in both the Moda Mall and The Avenues. By 2020 the bay will have another hotel with the opening of the $66m Hilton Bahrain Bay Hotel and Residences. The 210-room property will have direct access to The Avenues and will comprise 150 apartments and 60 studio suites. The Water Garden City mixed-use development by Albilad Real Estate is to be built on reclaimed land and will feature no fewer than four hotels, with one designed as a family resort, another occupying an island, a third designed to cater to business travellers and a fourth serving a marina. Water Garden City will have commercial premises arranged along a financial boulevard, residences, and restaurants as well as the four hotels.
To the west of Bahrain Bay stand the three iconic office towers of the Villamar, GFH’s long-term business bay development. Adjacent to Villamar a new mixed-use development by GFH called Harbour Row is also under construction. The $150m scheme includes 475 residential units as well as retail outlets and restaurants. Further along the coast the One And Only Resort at Seef is expected to open in 2018.
WEST SIDE STORY: Originally slated to open in 2018, a new Fairmont resort is being developed in partnership with Edamah Properties, a wholly owned subsidiary of the Bahrain holding company Mumtalakat. The resort at Salam Beach will have 215 guest rooms and chalets in a beach front location, which is 5 km from Bahrain International Circuit. The agreement between Fairmont and Edamah was signed in 2015 and will bring the Fairmont brand to Bahrain for the first time. Recent reports indicate the hotel is now expected to open within the next five years, as opposed to in 2018.
EAST OF EDEN: The 1969 book Looking For Dilmun by the archaeologist Geoffrey Bibby explained how his excavations in the 1950s attempted to piece together Bahrain’s ancient past. Among the mysteries Bibby sought to solve was the suggestion that the island had been the site of the original Garden of Eden.
For travellers seeking out a modern day equivalent of the exotic flora and fauna described in ancient myths, Edamah Properties is developing an eco-tourism resort in the Hawar Islands east of Manama. The islands are home to many rare species of birds and are also the natural habit of exotic land-based and aquatic mammals. A five-star lagoon resort is being built with 350 keys as well as 150 eco-friendly villas and apartments. Construction on this phase was expected to have started in 2017 and be completed by 2019. A second phase, due to be completed by 2021, will introduce an additional 500 rooms with the construction of a boutique hotel, holiday villas and apartments and a wellness spa.
ON THE WATERFRONT: On the north-east tip of Muharraq a trio of major waterfront developments is taking shape, many of them on reclaimed land. Dilmunia, Marassi Al Bahrain and Diyar Al Muharraq will all involve the development of hospitality and retail elements. In April 2017 the EDB reported that Dilmunia Island had awarded the construction contract for its Mall of Dilmunia to local Cyprus Cybarco Tabet. The new development will feature a 16-metre-high cylindrical aquarium, roof-top cafes overlooking a canal and two atrium spaces that can be used to host events. Mall of Dilmunia will have a total built up area of 125,000 sq metres and 47,300 sq metres of gross leasable area. Dilmunia Island is 125 ha, with plans devoting 9% to new hotels, 17% to wellness destinations and 10% to retail.
The UAE-based Eagle Hills development company has partnered with Bahraini developer Diyar Al Muharraq to create Marassi Al Bahrain, a beachfront property on the northern shores of the Diyar Al Muharraq development that will include a destination mall: the Marassi Galleria. According to the EDB, the main construction contract for the Marassi Galleria Mall was due to be awarded by 2018. In January 2017 Eagle Hills launched another mixed-use component of the master plan, Marassi Boulevard, including 240 homes and 700 sq metres of community retail. New hotels are also being built at Marassi Al Bahrain. Vida Marassi Al Bahrain is described as a 157-key lifestyle hotel with sea-facing rooms, restaurants, a spa and business facilities. Vida is also building two complexes of branded serviced apartments, Vida Residences Al Marassi and Marassi Marina, with 145 and 110 apartments, respectively.
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