Known in ancient times as Dilmun, the inspiration for the Garden of Eden, and more recently as Ard Million Nakhla, or the Land of a Million Date Palms, Bahrain has been welcoming visitors to its shores for centuries. More recently, the island was the first country in the Gulf to develop a modern tourist industry, when it established itself as the region’s first leisure and services centre during the oil boom of the 1970s. Since then, the tourism sector has gone from strength to strength, and with new hotel capacity coming on stream and an increasing diversity of visitor attractions, the sector looks set to grow even further.
By The Numbers
Tourism is a major industry in Bahrain. According to the latest numbers from the World Travel and Tourism Council (WTTC), in 2014 the sector made a direct contribution to the economy of BD544.2m ($1.4bn), or 4.2% of GDP. This was forecast to rise by 1.5% in 2015, and to grow at an annual rate of 4.9% between 2015 and 2025, reaching a total value of BD895.3m ($2.4bn), or 4.9% of GDP, in 2025. Taking indirect effects into account, the total contribution of tourism to the Bahraini economy was 10.3% of GDP in 2014, or BD1.34bn ($3.5bn). This was projected to rise by 0.3% in 2015, and to grow at an average rate of 4.9% between 2015 and 2025, to reach 11.9% of GDP, or BD2.17bn ($5.7bn), by 2025.
Direct employment in tourism amounted to 31,000 jobs in 2014, with a further 45,500 positions indirectly supported by the sector. This is expected to rise to 41,000 direct jobs and 67,000 indirect jobs by 2025. The WTTC placed the value of investment in the sector at BD148.9m ($392.3m) in 2014, or 6.1% of total investment that year, with this projected to reach BD2.34bn ($6.2bn) in 2025, or 6.4% of total investment. In terms of world rankings, the WTTC ranked Bahrain’s tourist industry as 95th worldwide in terms of absolute size in 2014, but 53rd in terms of long-term growth prospects over the coming decade.
Visitor numbers stood at 9.2m in 2013, according to World Bank indicators, up on 8m arrivals in 2012. Of these, the majority – around 90% – came from Saudi Arabia and other Gulf countries. Known for its relaxed atmosphere, Bahrain sees a lot of tourist traffic at weekends. In addition, the island hosts a number of leisure, sporting and cultural events, and has a thriving meetings, incentives, conferences and exhibitions (MICE) segment.
Regulation
The Bahrain Directorate of Tourism, which comes under the Ministry of Culture, is responsible for promoting tourism, as well as for regulating, inspecting and ranking accommodation. Meanwhile, as per guidelines within the Bahrain Tourism Strategy 2015-18, a new Supreme Council for Tourism was established to help guide the development of the sector. Mumtalakat, a state-owned holding company, is also a key player, owning or holding stakes in several tourism-related businesses in Bahrain, including Bahrain International Circuit (BIC), Bahrain International Golf Course Company, Durrat Khaleej Al Bahrain Company, the Southern Tourism Company and Al Jazeera Tourism Company, among others.
Accommodation
According to figures from the Central Informatics Organisation, in 2013 Bahrain boasted 10,530 hotel rooms in 106 establishments, compared to 9578 rooms in 104 establishments the previous year. Hotel accommodation ranges from basic, no frills establishments to high-end international hotel brands with an emphasis on luxury. There were 13 four-star and 40 five-star hotels in Bahrain in 2013, including well-known brands like Sheraton, Hilton and Ritz-Carlton, as well as resort hotels, such as the Al Areen Hotel and Spa. Serviced apartments or “aparthotels” are another popular form of accommodation and often more comfortable for extended families. In 2013 Bahrain counted 2339 serviced apartments.
A 2014 report from investment bank Alpen Capital predicted that the hotel market in Bahrain would grow at a compound annual growth rate (CAGR) of 15.2% between 2013 and 2018, and that the serviced apartment segment would grow at a CAGR of 11.4% over the same period. The hotel segment’s occupancy rate was forecast to rise from 49% in 2013 to 63% by 2018, and from 44% to 58% in the serviced apartment segment. The average daily rate was projected to rise from $155 for aparthotels in 2013 to $176 in 2018.
The authorities are slowly moving towards upgrading the overall accommodation offer in Bahrain, with greater emphasis on upmarket establishments, although the budget segment is likely to see more demand at weekends.
New Capacity
In a sign of continued confidence, 2015 saw several new hotels open in Bahrain. In January the Rotana Group, opened its second property, the 311-bed, five-star ART Rotana Hotel at Amwaj near the airport, featuring eight meeting rooms, seven bars and restaurants, and a beach facility. Rotana also plans to open a third hotel in late 2015; the Downtown Rotana, located in central Manama, will have 251 rooms.
Also in January 2015, budget hotels group Ibis opened a new 304-room hotel in Seef, near the main highway to Saudi Arabia, in partnership with Kuwaiti group Action Hotels Management. Two months later, as part of the ongoing Bahrain Bay real estate development, the Four Seasons Bahrain opened, offering 273 rooms – including 57 suites – together with function rooms and a spa.
Of projects in the pipeline, in May 2015 the hospitality management group Swiss Belhotel announced it was due to open a second, 193-room hotel in 2016. Meanwhile, local firm Gulf Hotels Group is investing $132m to open a number of new properties and restaurants including a four-star, 173-unit aparthotel in Amwaj, due to open by year-end 2015, and a 108-unit aparthotel in Manama’s Juffair district in late 2016. Fairmont Hotels plans to open its first hotel in Bahrain in 2018, featuring 215 rooms and chalets, and over 2000 sq metres of meetings and event space.
Formula 1
Probably the single biggest event in Bahrain’s tourist calendar is the Formula 1 Gulf Air Bahrain Grand Prix, which has taken place annually since 2004. The first Grand Prix in the Middle East, it is held at BIC. The 2014 and 2015 Grand Prix were both record breakers in terms of attendance, with 85,000 visitors in 2014 and 90,000 in 2015. BIC is also a major year-round tourist attraction, hosting events such as drag car racing and karting, in addition to providing business and conference facilities. In 2014, 10 years after it first opened, BIC installed a new lighting system in order to hold races at night. This has allowed the facility to extend the racing season (high temperatures during the summer days make racing impracticable) and also makes holding mid-week fixtures easier. Other events held at the circuit include the BIC 2000cc Challenge, FIA World Endurance Championship – 6 Hours of Bahrain, and the GP2 Series.
Heritage
Bahrain has associations with the Epic of Gilgamesh from ancient Sumer, the earliest known work of literature in history, where the island is mentioned (under the name of Dilmun) as the location of the Garden of Eden. Bahrain was also a shipping post for Alexander the Great, and the Greeks knew the island as Tylos.
Bahrain boasts two UNESCO World Heritage Sites, plus a number of other historical monuments. Bahrain Fort, the island’s first World Heritage Site, dates back 4500 years, and was the centre of the Dilmun civilisation, although the present building is of more recent construction. The country’s other World Heritage Site, the Pearl Diving Trail, pays homage to Bahrain’s long history as a centre for the harvesting of pearls. The trail consists of a 3.5-km path along the shore of the island of Muharraq, linking 17 buildings and several oyster beds. Muharraq is a smaller island off the coast the main island of Bahrain, and as the former capital it is also home to many historical attractions, including palaces, souqs and Arad Fort. A number of the former have now been turned into museums and arts venues.
The capital Manama is also home to several museums, including the National Museum and the Beit al Qur’an, which houses an extensive collection of historic Qurans. Bahrain is also home to a number of other historic and archaeological sites, such as the Khamis Mosque, which dates back to the time of the Caliph Omar, as well as the Barbar Temple and the Dilmun Burial Grounds, which date back to around 3000 BCE and 4000 BCE, respectively. While Bahrain has many modern shopping malls, the souq in Manama is one of the few places in the world where it is possible to buy natural (i.e. non-artificial, non-cultured) pearls.
Ecotourism
Bahrain also possesses a natural heritage that holds much potential for tourism. Perhaps the jewel in Bahrain’s ecological crown is the Hawar Islands, which lie 25 km south-west of the main archipelago. The 16 islands were the subject of a territorial dispute between Qatar and Bahrain, which was finally settled in Bahrain’s favour in 2001. As a result, the islands had remained relatively undeveloped and are home to animals such as oryx and gazelles, and birds such as falcons, osprey and flamingos. Hawar is also the site of one of the world’s largest flocks of Socotra cormorants, an endangered sea bird.
The Bay of Bahrain, where the islands are situated, is home to a rich marine-life ecosystem, including dolphins, dugongs and whale sharks, for which the bay is an important breeding site.
In 2014 Bahrain announced plans to institute a nature reserve, the Northern Heyrat Nature Preserve, to cover 1350 sq km. Authorities are now looking to develop the area, albeit in a sensitive manner. The Southern Area Development Company, a subsidiary of Mumtalakat, re-opened the four-star Best Western resort on the island in 2014 after extensive renovation.
Toward the south of the island, the Tree of Life, one of Bahrain’s most famous attractions, is believed to date back around 400 years. The site, which draws some 50,000 visitors a year, consists of a single tree surrounded by desert and enclosed by a fence since 2007. A major upgrade of the site, financed by the Bahrain Petroleum Company to the tune of over $750,000, was completed in 2014, providing an amphitheatre, viewing zone, small kiosks and other tourist facilities.
The mangrove swamp at Tubli, on the eastern side of Bahrain, extends 430,000 sq metres and features mangroves up to 3.5 metres high. The mangroves are protected under the UN Convention of Wetlands of International Importance (known as the Ramsar Convention) and at high tide offer kayaking opportunities.
Bucket & Spade
Bahrain also has good potential for “sun and sand” holidays, especially for winter tourism. The island receives 3350 hours of sunshine a year, and the sun means that winters are comparatively mild – January temperatures average a maximum of 20°C and a minimum of 14°C. Water temperatures rarely drop below 20 °C, even in the winter months, due to the intense sunshine and the shallow waters. Moreover, the country continues to upgrade its public beaches; in May 2015, the local authority in Muharraq announced it intended to build a new waterfront at Galali.
All this makes for ample potential for winter getaways, especially for European and Russian tourists seeking winter sun. If combined in packages with other attractions (such as BIC), then the potential could be even greater. The Directorate of Tourism exhibited at the Moscow International Travel and Tourism Exhibition in March 2015 for the first time, and Mumtalakat announced in May 2015 that it was partnering with Swiss travel group Kuoni to set up the first destination management company in the country, known as atBahrain.
MICE
The MICE segment is an important part of the Bahrain travel and tourism industry, making up some 15% of tourist receipts in Bahrain in 2013, or $400m, according to Alpen Capital. The leading centre for MICE events is Bahrain International Exhibition and Convention Centre (BIECC), run by the Bahrain Exhibition and Convention Authority. BIECC’s total space exceeds 18,000 sq metres. Major events include the Jewellery Arabia fair, which attracts more than 50,000 people; the Bahrain International Book Fair; and the Autumn Fair, a trade fair held under the auspices of the Ministry of Commerce and Industry in Bahrain.
According to Alpen, business visitors account for a relatively small share of total tourism spending in Bahrain compared to in other GCC economies. This marks the significant potential that the segment holds. If Bahrain can capture even a small slice of the growing meetings and events market in the GCC, the effect on the sector will be marked. As demand grows for exhibition space, BECA plans to build a new MICE facility, known as expo@bahrain, near BIC with good access to the King Fahd Causeway to Saudi Arabia, which typically accounts for a quarter of all attendees at Bahraini trade fairs. expo@bahrain is planned to provide 145,000 sq metres of space, as well as hotels and leisure facilities on site. At time of press, however, no firm schedule for the project had been completed.
Connectivity
Bahrain’s good road and air connections to Saudi Arabia and the rest of the Gulf are a major factor behind its success in attracting tourists from within the region and beyond. The King Fahd Causeway links the country to Saudi Arabia’s Eastern Province, which has a population of over 4m people, many of whom come to Bahrain for short breaks or shopping trips. “[Hotels] in Bahrain see a higher number of walk-ins than those elsewhere, showing that it remains a popular impulse destination for Saudi families across the causeway,” Sheikh Mohammed bin Abdulrahman Al Khalifa, chairman of International Trading & Investment Company, told OBG.
The GCC railway, which is due for completion in 2019, will institute a rail link not just with Saudi Arabia, but if the proposals are realised, also with Qatar, which should facilitate more tourist arrivals. Ongoing expansion of Bahrain International Airport, which is due to increase capacity to accommodate some 14m passengers a year by 2018, will likely cement existing air links. Further underscoring the reach of Bahrain’s air links, Gulf Air, the national carrier, opened a direct route with Moscow in October 2014.
Bahrainisation
Bahrain is looking to develop higher standards of service, as well as increase the numbers of Bahrainis employed in the country, where expatriate labour predominates in the private sector. Tourism is no exception, and hotels and tourist companies are able to apply for training grants and subsidies under the Tamkeen system, a government agency that focuses on developing the skills of Bahrainis to enable them to compete in the labour market. Tamkeen also runs a scheme whereby it defrays training costs for employers. The Bahrain Institute of Hospitality and Retail, a private institution founded in 1999, provides training courses in hospitality management. Several large Bahraini tourism companies already boast a high rate of Bahrainisation, notably BIC (where around 85% of employees are Bahraini).
Outlook
Bahrain’s tourist industry is set for a period of expansion and consolidation. Accommodation capacity continues to rise as new developments come on-stream, and the sector is likely to continue to be dominated by higher-end establishments, although the demand for budget accommodation is unlikely to fade. Increased focus on differentiating the island’s tourist offering – with investment in new attractions, better marketing of existing ones and a move to exploit niche segments such as MICE and ecotourism – should bear fruit as visitor numbers continue to rise and the nature of tourist visits continues to diversify, with an increase in package and business tourism helping to supplement the reliable weekend traffic.
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