01/03/2016

New investments in the hospitality sector and efforts to raise Bahrain’s international profile should drive tourism growth in 2016, broadening the kingdom’s appeal as a destination for travellers from the region and further afield.

With Manama formally named the “Capital of Gulf Tourism 2016” in early January by the tourism ministers of the GCC, a series of projects and exhibitions are being planned to help bolster intra-regional tourism and showcase Bahrain’s cultural and tourism potential.



Growth measures

According to a report from the Ministry of Industry, Commerce and Tourism, events associated with the kingdom’s new status could increase the volume of tourism between Bahrain and the rest of the GCC by 10-15% in 2016.

This would provide a significant boost to the sector, with GCC countries – and Saudi Arabia in particular – accounting for the majority of arrivals. Saudi travellers, which account for around 70% of all visitors, enjoy direct access to the kingdom via the King Fahad Causeway.

Bahrain already posted strong growth in tourist numbers in 2015, with an 8.4% annual increase in inbound traffic in the third quarter and a peak of 1.4m arrivals during the month of August, according to a December report from the Bahrain Economic Development Board.

In an effort to maintain longer-term sector growth, Bahrain announced plans in January 2016 to revitalise and refurbish the Manama Souq, the historic bazaar district in the centre of the old city, and Bab Al Bahrain, which serves as the gateway to the market area.

Unveiling the twin projects, the crown prince, Sheikh Salman bin Hamad Al Khalifa, described the souq as an important tourist attraction, drawing on its links with the country’s history and development, with its renovation expected to further enhance the kingdom’s tourism standing.

Hotel building boom

Several international hotel chains are looking to raise their profile in Bahrain, either by entering the market or expanding their existing holdings to take advantage of the longer term potential of the country’s hospitality sector.

Early January saw the Wyndham Hotel Group announce plans to add a new Ramada hotel and two new Wyndham-brand hotels to its two existing establishments in Bahrain. The new 140-room Ramada is scheduled to open in Manama at the end of March 2016.

The hotels will have a combined eventual capacity of nearly 1200 rooms, representing a significant boost to Bahrain’s accommodation stocks.

According to Dan Ruff, Wyndham Hotel Group’s president and managing director for Europe, the Middle East and Africa, the region’s expanding middle class, along with its strong growth and development, is attracting chains to countries such as Bahrain.

“This is driving increased interest from developers for globally known brands… which are well positioned to meet the emerging travel needs of consumers in the region,” Ruff said in a statement in early January.

There were seven new four- and five-star hotels under construction in Bahrain as of January 2016, according to data from the Ministry of Industry, Commerce and Tourism.



Regulatory forecast

A key regulatory change that could have a mixed impact on sector growth in the years ahead is the possible easing of a ban on live entertainment and alcohol at three-star hotels.

Introduced in mid-2014, the ban – which followed a similar interdiction at one- and two-star establishments in 2009 – was imposed in response to violations of the country’s licensing laws.

Speaking to local media at the end of January, Zayed Al Zayani, minister of industry, commerce, and tourism, said the prospect of lifting the ban was being considered, as long as proper regulations were put in place.

“About three-star hotels, live bands and liquor licences, we are all for reviving tourism, and we want to improve their earning potential,” Al Zayani said. “However, no decision has been taken yet and everything is up for discussion – we are not saying no and not saying yes.”

In the 18 months since the ban was implemented, many three-star hotels have undergone renovations to obtain four-star status. While this has raised the average standard of accommodation in Bahrain, and narrowed the field of competition for mid-tier establishments, it has also resulted in an oversupply of four- and five-star rooms –which could be exacerbated by a loosening of restrictions.

Oxford Business Group