Home to one of the region’s most unique island geographies, UNESCO World Heritage sites and the popular annual Formula 1 Bahrain Grand Prix event, Bahrain already has much to offer visitors. The capital Manama has a long-established reputation for its high-end retail and hospitality offering, providing tourists from neighbouring states, notably Saudi Arabia, with a convenient getaway destination via the King Fahd Causeway. The development of the tourism sector forms a central part of the kingdom’s drive to diversify its economy, with ambitious plans under way to boost Bahrain’s hotel and retail experiences and expand the country’s meetings, incentives, conferences and exhibitions (MICE) segment.

These efforts are, however, taking place within the context of a global economic slowdown and an increasingly competitive regional tourism market. Expanding the country’s current portfolio and improving airport capacity, while also consolidating its position as a luxury and MICE destination therefore constitute Bahrain’s main challenges. Through a combination of government investment and increased private sector activity, however, steady progress is being made on each of these fronts, with much to play for given that the GCC is expected to receive 195m tourists per year by 2030, according to the UN World Tourism Organisation.

Structure & Oversight

Bahrain’s tourism sector is overseen by a number of government entities including the Ministry of Industry, Commerce and Tourism (MICT), which formulates policy and legislation and leads development of tourism projects, as well as the Bahrain Tourism and Exhibitions Authority (BTEA), which was created in 2015 to support the activities of the MICT in developing the sector. The BTEA now overseas all tourism industry affairs in the kingdom and is responsible for the regulation of the Bahrain Exhibition and Convention Authority. Since April 2016 the BTEA has operated under the tourism branding platform “Ours. Yours. Bahrain”. The strategy aims to promote the country’s status as both an international tourism destination and a high-potential site of investment.

The BTEA has also been charged with implementing the kingdom’s long-term development and diversification framework, the Bahrain Economic Vision 2030, which aims to increase the macroeconomic contribution of the tourism industry. The agenda sets out a roadmap for Bahrain’s transition away from reliance on hydrocarbons, and identifies tourism as one of the key areas of growth potential as the economy diversifies. To support this drive the Economic Development Board (EDB) has committed $32bn to develop the country’s infrastructure.

The tourism sector has been a major beneficiary of this government investment, with a $10bn pipeline of tourism sector projects under way as of November 2019. Additionally, a major upgrade of Bahrain International Airport is under way – which aimed to increase passenger capacity by 40% in 2019 – and the expansion of transport links with neighbouring Saudi Arabia through the construction of the proposed 25-km King Hamad Causeway, which is earmarked for completion by 2023.

As part of an effort to attract international investment to the tourism sector and the broader economy, Bahrain offers a range of incentives. Most notably, in February 2017 the government introduced 100% foreign ownership without the restriction to operate in a free zone or the requirement to form a local partnership. In addition, the country offers a favourable tax and regulatory environment, with overall business operation costs being 17-49% lower than the rest of the GCC, according to a May 2018 report from global consultancy firm KPMG.

History & Culture

Another important government entity operating in the sector is the Bahrain Authority for Culture and Antiquities (BACA). The body is responsible for running the national museum, theatre, art centre and archaeological sites, while also organising annual festivals and events. These festivals include the Spring of Culture, which runs from mid-February to mid-April each year, and the Bahrain International Music Festival, which takes place every October. One notable attraction operated by the BACA is the Bahrain National Museum, a 27,800-sq-metre complex that houses a collection of archaeological artefacts, notably from the ancient Dilmun civilisation, in addition to exhibitions on the history of Bahrain and its flora and fauna. The museum attracted a total of 41,000 visitors in the first three months of 2019, a 17% year-on-year (y-o-y) increase, according to the BACA.

Bahrain is also home to one of the largest mosques in the world – the Al Fateh Grand Mosque – and Beit Al Quran, a museum dedicated to Islamic arts that houses a collection of Islamic religious manuscripts. Another major draw is Qal’at al-Bahrain, also known as the Bahrain Fort, the former capital of the Dilmun civilisation, which contains extensive archaeological sites spanning three millennia and which was declared a UNESCO World Heritage site in 2005.

Outdoor Attractions

The country is home to another UNESCO World Heritage site, namely the Bahrain Pearling Path, which received its designation in 2012. Composed of three offshore oyster beds, 17 buildings in Muharraq, a segment of coastline and the seafront of Qal’at Bu Mahir fort on Muharraq Island, the Bahrain Pearling Path offers visitors an insight into the “cultural tradition of pearling” from the 2nd century to the 1930s, according to UNESCO. Tourists are also able to take part in guided pearl diving tours, an offering unique to the country.

At the centre of the historic pearl industry are the Al Dar Islands, which offer coral reefs and dolphin watching, along with the uninhabited Hawar Islands which host a wildlife reserve. The diving segment received a major boost in the kingdom with the opening of Dive Bahrain, the world’s largest underwater theme park, in September 2019. Covering some 100,000 sq metres the attraction includes a sunken Boeing 747 aircraft, artificial coral reefs and a replica of a Bahraini pearl merchant’s house. The project was a joint development by the BTEA and the Supreme Council for the Environment.

Other attractions include Adhari Park, an amusement part; the Lost Paradise of Dilmun waterpark; Wahooo! Waterpark; the Al Areen Wildlife Park, a nature reserve and zoo; and Gravity, the kingdom’s first indoor skydiving centre. Another popular experience is attending the Formula 1 Bahrain Grand Prix at the Bahrain International Circuit. “Being the first-mover in motorsports in the GCC has enabled us to grow our capabilities domestically, establish a knowledge hub and contribute to its growth in the wider region,” Salman bin Isa Al Khalifa, chief executive of the Bahrain International Circuit, told OBG.

Performance & Size

In 2018 a record 12.8m visitors came to Bahrain, a 6% increase on the previous year, according to the BTEA. Preliminary data for 2019 shows visitor numbers continuing to rise, with 3.2m arrivals in the first three months of the year, a 3.1% y-o-y increase. Furthermore, the sector contributed 6.5% of GDP in 2018, the highest proportion of any state in the Gulf. Highlighting the significance of neighbouring Saudi Arabia as a source market, the King Fahd Causeway remains the most popular way to travel to Bahrain, with 5.3m of a total of 5.9m arriving via the bridge network in the first half of 2018, according to the latest figures from the BTEA. The second most popular means of arrival was by air, with 570,074 arriving by plane, followed by sea, which carried 49,864 visitors. Some 5m of the total tourist nights spent in the kingdom were by people who had come over the causeway, with 1.9m nights spent by those arriving by air.

The most popular reason for visiting the country during this period was holiday and leisure, with 43.4% of arrivals citing this as their aim in coming to the kingdom, followed by shopping at 35.2%. This was followed by visiting friends and relatives at 9.2%, business (6.8%), health care (2.4%) and other (3%). The predominance of holidaymakers and shoppers is also evident in the choice of accommodation, with 73% staying in hotels and 14% in furnished apartments. Staying with friends and relatives only accounted for 10%, while rented and owned apartments accounted for just 1% and 2%, respectively.

These figures suggest that the most common profile of a visitor is a Saudi national attracted by Bahrain’s leisure and retail offering, with no direct connection with the kingdom in terms of family or home ownership. Nevertheless, this profile may be set to change in the future. In reference to the introduction of cinemas and live music events, Shumalan Naicker, territory head at the retail and hospitality firm Landmark Group Bahrain, told OBG, “In recent times, we have seen Saudi Arabia become more liberal and this has weakened the trend of Saudis coming to Bahrain via the King Fadh Causeway to experience these kinds of entertainment.” Tourists make a significant contribution to domestic gross consumption, with the average visitor spending BD76 ($202) per night during the first half of 2018, or a total of BD812.4m ($2.2bn).

However, the average length of stay is relatively short at 3.2 nights per traveller, a feature that can be largely attributed to the high volume of Saudi arrivals coming via the King Fahd Causeway, suggesting significant potential to increase revenue from the sector by attracting a greater number of international arrivals from source markets located further afield. The authorities hope to increase these figures over the coming years. Speaking at the Gulf Air Annual Commercial Conference in January 2019 Sheikh Khalid bin Hamoud Al Khalifa, former CEO of the BTEA, told delegates that the government targeted 15m visitors per year by 2022 and an 8.3% contribution to GDP. In addition, Sheikh Khalid stated that they hoped to increase the average daily spend of visitors to BD97.90 ($260) by 2022.

Hotel Infrastructure 

Given these ambitious objectives, developing the range and availability of accommodation for tourists is clearly a priority for the kingdom. Revenue per available room (RevPAR) fell steadily between 2014 and 2017, from $125 to $74, although this trend was common to all GCC states over the period, with the exception of Oman, according to figures from the global hospitality research firm HVS Research.

This trend appears to have continued into the first half of 2018 with BD14.40 ($38.20) RevPAR for four star hotels and BD34.60 ($91.78) for five star, according to the BTEA. However, there are signs of a recovery in the segment with a 14.3% y-o-y rise in RevPAR during the first half of 2019, the first increase since 2014. In line with trends found in previous years, March was the best performing month in 2019, which can largely be attributed to the holding of the annual Formula 1 Bahrain Grand Prix event. Meanwhile, occupancy rates also appear to be on the rise, up by 12.5% y-o-y in the first half of 2019 to 58.4%, while average daily rates rose by 1.6%.

The years ahead are also set to see an increase in the number and range of hotels on offer in the kingdom. According to an announcement from the BTEA in August 2019, some 22 new hotels were expected by 2023, including facilities from Hilton Worldwide, Emaar Hospitality Group’s Address Hotels + Resorts and the Hong Kong-based Shangri-La Hotels and Resorts multinational. The first of these is the $66m Hilton Bahrain Bay Hotel and Residences, which is set to open in 2020. The 210-room property will have direct access to The Avenues waterfront shopping centre and will comprise 150 apartments and 60 studio suites. The Address Marassi Al Bahrain, meanwhile, will be integrated with the 180,000-sq-metre Marassi Galleria shopping centre complex and provide 112 rooms, 17 of them suites, representing the first opening of a hotel by the Emaar Hospitality Group outside the UAE. The Shangri-La Hotel Bahrain is due to open in 2022 at the Bahrain Marina, a 310,000-sq-metre mixed-use complex currently under development in the capital. The hotel will feature 250 luxury rooms, 150 one- to three-bedroom suites, along with 21 waterfront villas and eight beach chalets. The hotel will offer a range of MICE facilities, five restaurants, a private beach, a 1038-sq-metre ballroom and a spa.

In addition, the $1.5bn Bahrain Financial Harbour is set to become the location of the 160-room boutique Mama Shelter Bahrain hotel, developed by the Mama Shelter brand through a partnership between the hospitality players Accor and the GFH Financial Group. The harbour is also playing a key role in diversifying the tourism industry. “Cruise ships, if allowed to come closer to the Bahrain Financial Harbour area, would help boost the country’s tourism offerings,” Ramsumesh Menon, CEO of Bahraini travel service organisation Gosaibi Travel, told OBG.

New Opportunities

While the number of hotel rooms in the country is expected to increase by 31% between 2019 and 2023, approximately 89.5% of this future supply is expected to be provided by the upscale-to-luxury market bracket, according to research from the UK-based hospitality management company TRI Consulting. However, hotel operators have also identified an expanding market for high-quality but mid-price accommodation, particularly for business and MICE stays.

The most recent new development in this segment came in March 2017 when the MENA hospitality player Action Hotels opened its second mid-price Ibis-branded hotel in the country the Hotel Ibis Styles Manama Diplomatic Area, this joined the Ibis Seef Manama Hotel, which opened in 2015. Considerable potential exists for expansion into this segment, particularly with the expansion of BIA expected to attract a greater number of business and leisure travellers over the short to medium term.

Airport Expansion

BIA is currently undergoing a $1.1bn modernisation programme, which will significantly boost passenger-handling capacity, operational efficiency and safety standards. Approximately 70% of project financing was sourced from the GCC Development Fund, primarily the Abu Dhabi Fund for Development, with the government of Bahrain supplying the remainder.

The project, work on which commenced in 2016, is set to see the construction of a new terminal, hangar, service building and additional landing slots, and is scheduled for completion in March 2020. The new terminal building will have around 104 check-in counters, 36 passport control booths, 24 security points and 9000 sq metres of duty-free retail space.

Furthermore, the competed airport is set to cover 207,000 sq metres, around four times larger than it was prior to the modernisation drive, increasing the handling capacity of BIA from 9m to 14m passengers per year.

The expansion forms part of Bahrain’s 20-year master plan for the industry, the Airport Modernisation Programme which is being implemented by the Bahrain Airport Company. As part of the industry’s broader aim to attract more high-net-worth individuals from the region and further afield, the expansion will also include the construction of a new private jet terminal.

Airline Updates

In line with the expansion of BIA the national carrier Gulf Air, one of the oldest international airlines operating in the region, launched a new brand in April 2018 at that year’s Formula 1 Bahrain Grand Prix event. The relaunch included a new logo, identity system, livery and a complete redesign of its aircraft interiors. Additionally, the airline has significantly expanded its current fleet, purchasing seven new Boeing 787-9 Dreamliners in recent years, the fourth of which was delivered in October 2019, and the remaining three anticipated to come into service by 2021. The airline also received its third Airbus A320neo in August 2019, contributing to revamped fleet of 39 new planes.

These aircraft will operate over an expanded international route map, with new destinations, such as Malaga in Spain and Salalah in Oman, operating on a seasonal basis, while Malé, in the Maldives, joined the Gulf Air network in October 2019.

This investment efforts appear to be bearing positive results, with the company announcing that passenger numbers totalled 3.2m in the first half of 2019, up from 2.6m the previous year, marking a 3.1-percentage point increase in load capacity from 74.3% to 77.4%. The carrier also has plans to develop Bahrain as a stopover destination for longhaul passengers travelling between Asia and Europe.


While the emphasis remains on developing Bahrain as a tourist destination, the country’s MICE offering is also set to expand with the completion of Convention and Exhibition Expo City in Sakhir in mid-2021. The 308,000-sq-metre MICE facility is located close to BIC and is set to contain 10 exhibition halls and adjoining hotels contributing 1200 new rooms to the country’s portfolio.

The project joins the Bahrain International Exhibition and Convention Centre (BIECC) in Manama, which hosted the region’s biggest Chinese trade fair, the China Machinery Fair, in September 2019. Other notable events held at the BIECC include the annual Jewellery Arabia fair and the ArtBAB contemporary art fair. In addition, the country has a growing reputation as a popular venue for weddings, particularly in India, with the BTEA actively promoting the kingdom among wedding planners in the subcontinent, which is already a major source market for other MICE events.


Bahrain’s efforts to transform the tourism sector into a key driver of diversification and economic growth appear to be generating positive results. By leveraging the country’s cultural, natural and retail attractions – while providing a supportive environment for investors – Bahrain has achieved a dramatic increase in visitor numbers and experienced a recent revival of the hotel segment.

The kingdom has also continued to benefit from its long-established reputation as a more culturally liberal state in the region, which has proven a historic draw to its leading source market Saudi Arabia. However, as the neighbouring kingdom opens up and the region becomes more competitive, further developing the country’s niche markets and attracting arrivals from further afield will prove essential.