Despite being one of the smallest countries in Asia, Bahrain distinguishes itself by combining its strategic location and vibrant cultural heritage with progressive infrastructure and facilities for the meetings, incentives, conferences and exhibitions (MICE) segment. The tourism strategy serves as a cornerstone for the four-year Economic Recovery Plan (ERP), which aims to mitigate the adverse impacts of the Covid-19 pandemic and drive a comprehensive and sustainable recovery.
In line with the ERP, Bahrain introduced a series of sector-specific initiatives for 2022-26, including a robust tourism plan. The strategy aims to attract 14.1m tourists annually and elevate the industry’s contribution to GDP to 11.4% by 2026. Surpassing the 2022 target of 8.3m visitors by 19%, the kingdom received a total of 9.9m visitors that year. This figure exceeds the previous year’s arrivals, which stood at 3.7m.
Expansion
The tourism industry saw improvements in most key indicators in 2022, including generating BD1.5bn ($4bn) in revenue, surpassing the BD1bn ($2.7bn) target by 50%. Tourists spent an average of BD76 ($202) per day, which exceeded the target expenditure of BD69 ($183) by 10%, while the average length of stay was 3.5 days, surpassing the target of 3.3 days and reflecting an increase of more than 6%. Bahrain’s tourism recovered by 90% compared to pre-pandemic levels, outpacing the international recovery rate, which was estimated by the UN World Tourism Organisation at 65%. Within this recovery, the MICE segment stands out as a key pillar of growth and holds potential to boost non-oil revenue, improve tourism performance, generate jobs, raise the standard of tourism infrastructure and foster opportunities.
Infrastructure Strengths
During the first three quarters of 2022 the tourism sector attracted $291m in direct investment out of a total of $921m from 66 companies. These investments came from eight companies entering or expanding their presence in Bahrain, and are expected to create more than 1090 jobs over three years, aligning with the diversification goals of Bahrain Economic Vision 2030.
Through the development of key supporting gateway infrastructure, including the $1.1bn airport modernisation project, which added a terminal that increased annual passenger-handling capacity of Bahrain International Airport (BIA) by 14m in 2022, and the completed renovation of the Awal Private Terminal at BIA that same year, the kingdom has bolstered its capacity to receive international visitors and host events, exhibitions and trade shows.
Working under the slogan “Bahrain. Ours. Yours.”, the Bahrain Tourism and Exhibitions Authority (BTEA) has taken charge of developing and promoting the kingdom as a trade and business centre and integrating international marketing efforts. Over the years Bahrain has capitalised on major annual international gatherings and events, including Formula 1 (F1) Gulf Air Bahrain Grand Prix and the International Institute for Strategic Studies’ Manama Dialogue, to expand its leisure and hospitality infrastructure, while boosting its regional standing as a host nation. In 2021 travel and tourism contributed approximately $3bn to GDP, or 8.2%. Of this amount, 28% was generated by business and 72% by leisure tourism, signalling the potential of business tourism as the kingdom scales up MICE infrastructure and in-person events stage a comeback after the pandemic-related lockdowns.
In order to achieve its aim of developing the MICE industry, Bahrain made a significant addition to its events infrastructure portfolio with the inauguration of Exhibition World Bahrain in November 2022. With over 95,000 sq metres of trade show and conference space across 10 exhibition halls, 94 meeting rooms, 25 retail outlets and a 4000-seat grand hall, Exhibition World Bahrain, managed by Australia’s ASM Global, is one of the largest convention centres in the Middle East. The BTEA, which owns the facility, plans to leverage ASM Global’s network of more than 350 venues around the world to create event experiences and raise the kingdom’s profile as a major global destination for international meetings and conventions.
Immediately following its opening, Exhibition World Bahrain hosted three simultaneous events that attracted more than 100,000 visitors over five days: the 30th edition of Jewellery Arabia, a regional jewellery and watch show; the inaugural edition of Scent Arabia, Bahrain’s first luxury fragrance event; and Cityscape Bahrain 2022, a regional real estate summit and exhibition. The events marked the beginning of a calendar that is fully booked through the end of 2023.
Source Markets
Although tourism growth in Bahrain has historically been fuelled by intraregional tourists, which, according to the GCC Statistical Centre, comprised 95.6% of international tourist arrivals in 2019, the kingdom has pivoted its strategy to broaden its potential source markets. In December 2021 Bahrain launched the second pillar of its tourism strategy, centred on capturing 19 key markets across Asia, Europe and the Middle East, expanding on its previous focus on GCC countries, Russia and India. These new markets, selected on the basis of tourism traffic and existing direct flights, include China, Singapore, Thailand, the Philippines and Malaysia.
In the first quarter of 2022 the kingdom signed agreements with 75 tour operators across 19 priority markets and has launched awareness campaigns in each. Bahrain has also been working to strengthen its tourism ties with India, the world’s second-most-populous country and a key source market. In 2022 the BTEA conducted its first four-city roadshow in the cities of Mumbai, Chennai, Bangalore and New Delhi to promote its leisure, MICE and weddings segments. After launching the Island Wedding incentive programme in April 2017, the kingdom attracted 17 large Indian weddings, receiving around 6000 guests and adding $22m to the economy by the end of 2019.
Competitive Edge
Moving forwards, one of the main challenges for Bahrain’s MICE growth is competition from other destinations in the region, in particular the UAE, which has invested heavily in infrastructure. Prior to the pandemic total business travel spending in the GCC grew at a compound annual growth rate (CAGR) of 16.1% between 2016 and 2019, outperforming total leisure spending, which grew at a CAGR of 13.6%. As the GCC rebounded from the pandemic, total business spending recovered by 51.2% in 2021. Activity was largely concentrated in the UAE, which accounted for 42% of business tourism spending in the region that year.
Although the GCC region was hit by the 2014 oil slump and its property markets faced oversupply, new hotel room capacity has grown at a steady rate across all member countries. Between 2016 and 2021 hotel supply in the region grew by more than 146,337 rooms, or a CAGR of 4.6%, to reach 832,024 rooms. Expansion was spearheaded by the UAE, Saudi Arabia, Qatar and Oman, all of which outpaced the global average.
Bahrain added approximately 6280 hotel rooms between 2016 and 2021, while its occupancy rate was estimated at 42.4% in 2021, a significant increase from 28.1% in 2020 but lower than the pre-pandemic rate of 56.2% in 2019. Similarly, Bahrain reached an average daily rate of $173 and a revenue per available room of $86 in 2022, which grew by 21.1% and 39.6%, respectively, compared to 2021.
Future prospects look positive as the Bahrain International Circuit secured a place in the F1 calendar until 2036, bolstering opportunities for the hospitality sector. During the Grand Prix week, hotels run at 100% capacity, and the event alone generates up to $81m in accommodation revenue.
As Bahrain looks to accelerate sustainable economic diversification, its MICE strategy is being implemented with renewed vigour with the help of synergies with key stakeholders. In addition to the development of new hotels and conference facilities, and improvements in the transport network, the kingdom’s flag carrier, Gulf Air, has played a key role, synchronising its network with key source markets and actively promoting Bahrain as a top MICE destination.
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