Bahrain upgrades existing tourism infrastructure to meet demand

As a leading performer in Bahrain’s economy in 2017, the tourism and leisure sector has begun measuring its success and impact in billions of dollars. The kingdom expects to see annual tourism receipts of over $1bn by 2020, by which time over $1bn will have been spent on upgrading its international airport and a further $10bn on a raft of new luxury hotel developments.

By the end of 2018 the national carrier Gulf Air is set to take delivery of the first of a new $4bn fleet of Boeing 787-9 Dreamliners. In other travel, further into the 2020s up to $5bn looks set to be spent on a second causeway to Saudi Arabia to carry cars as well as trains running on the new GCC rail network.

Bahrain has long enjoyed a reputation as a favourite weekend destination for shopping, entertainment and relaxation for millions of Saudi citizens, but its efforts to boost the tourism sector are looking to more distant markets and at ways to encourage visitors to stay for longer. New regional destination malls and outlets are opening to enhance the retail offering, but Bahrain is also focusing on developing its offering for business travellers, eco-tourists and cruise liner passengers.

ECONOMIC IMPACT: In its “Economic Quarterly” report published in December 2017, Bahrain’s Economic Development Board (EDB) noted that the hotels and restaurants segment grew by 11.4% in the first three quarters of 2017 compared to the same period a year before, making it the fastest-growing sector of the economy and contributing 3.6% to overall GDP growth. Bahrain’s national accounts show the sector contributed BD81.9m ($217.2m) at current prices in the third quarter of 2017 compared to BD75m ($199m) in the third quarter of 2016.

The retail sector, which is a significant draw for many of the tourists visiting from Saudi Arabia across the 25km King Fahd Causeway, is listed under retail and wholesale trade in national accounts. Retail and wholesale trade contributed 4.2% to GDP in that period and made a contribution of BD152.5m ($404m) at current prices, up from BD132.6m ($351.6m) in the third quarter a year before. EDB data showed that collectively, hotels, restaurants and retail contributed $2bn in 2016, up from $1.9bn in 2015.

According to figures from Bahrain’s open data portal, there were 40,835 people working in the country’s hotels and restaurants in 2016, equal to 6.7% of the private sector workforce. Of this, 3496 were Bahraini, representing 8.6% of the people working in hotels and restaurants. The wholesale and retail segment employed 136,749 people, or 23% of the workforce, and there were 19,472 Bahrainis working in such activities – 14% of the sector’s employees.

BROADER SIGNIFICANCE: According to the World Travel & Tourism Council (WTTC), travel and tourism activities directly contributed BD493.6m ($1.3bn) to Bahrain’s GDP in 2016 – 4.1% of the total – and it forecasts that the contribution will rise by 5.5% from 2017 to 2027, when it anticipates the sector will contribute 4.7% to total GDP.

The WTTC estimates the sector makes an even greater indirect contribution to the economy by supporting other sectors, with its estimate of the combined total indirect contribution amounting to BD1.2bn ($3.2bn), or 9.9% of GDP in 2016. Similarly, the WTTC makes its own estimates of the direct and indirect impact on employment of travel and tourism, estimating 22,500 people were working directly in travel and tourism in Bahrain in 2016, with the total direct and impact of work generated or supported by the sector resulting in 54,000 jobs or 9.6% of total employment. The WTTC estimated visitor exports were BD657.4m ($1.7bn) in 2016, equal to 10.5% of total exports. Lastly, the council estimated travel and tourism investment in Bahrain in 2016 amounted to BD144.4m ($382.9m).

TOURISM NUMBERS: Bahrain saw strong growth in visitor numbers in 2016, a pattern that continued, albeit more modestly, in 2017. In 2016 just under 15m international visitors arrived in Bahrain, an increase of 5.7% compared to 2015, according to the EDB. In 2017 the number of visitors reached 15.3m, up 2.4% over 2016. The number of visitors crossing the King Fahd Causeway from Saudi Arabia rose by 3.9% to 12.7m in 2017, while airport arrivals decreased only slightly and totalled 2.6m for the year.

SECTOR OVERSIGHT: Although the EDB gives an overview of the contribution made by different sectors of the economy, tourism is also overseen by a number of other government agencies. The Ministry of the Interior’s Nationality, Passports and Residence Affairs (NPRA) Directorate collects data on the number of visitors arriving in the country by land, sea and air. At the Cabinet level the Ministry of Industry, Commerce and Tourism (MICT) is responsible for steering strategy in the sector. In 2015 the MICT created a new body, the Bahrain Tourism and Exhibitions Authority (BTEA), with responsibility for promoting the kingdom as a destination and overseeing hotel classification.

The government of Bahrain recognises tourism and transport’s significant potential as a growth sector of the economy and the EDB, NPRA and the BTEA are each actively pursuing strategies to help the kingdom succeed in reaching its goal of attracting 15m visitors in 2018. “The EDB works in collaboration with the BTEA,” Jerad Bachar, executive director of tourism and leisure at the EDB, told OBG. “Our focus at the EDB is on the supply side of the industry where we work with developers and investors to create tourism products and services that are unique, sustainable and diversified. The BTEA is the industry regulator and focuses on the demand side by promoting the kingdom to visitors from key source markets.”

WHITE PAPER: The EDB produced a comprehensive white paper on tourism in 2016, mapping the various direct and indirect ways in which tourism supports employment, revenues and the development of businesses in Bahrain’s economy. It concluded that sectors supported or affected by tourism included hotels and restaurants, but also retail and wholesale trade, transport and communications, social and personal services, and real estate and business activities.

Collectively, these sectors employed more than 260,000 people and helped to attract tourism spending of BD453m ($1.2bn), including for accommodation, which accounted for BD242m ($641.7m) and was expected to expand by a compound annual growth rate of 14.7% between 2013 and 2018. The report was produced to better crystallise the value proposition for investors. The EDB works with real estate developers, both locally and regionally, to identify opportunities in tourism and leisure.

VISITOR DATA: EDB analysis of the tourism sector also takes into account the fact that travellers arriving in the kingdom may be visiting for a number of reasons that may not fall under the traditional definition of tourism. Approximately 50% of the country’s residents and 75% of its workers are expatriates who may be classified as international visitors when they arrive from other countries or return from holidays abroad.

With Saudi Arabia just 25 km away across the causeway, many regional visitors arrive in Bahrain by road for weekend stays principally for leisure purposes, but also including business activities on some journeys. There are also daily commuters who either reside in Bahrain and work in Saudi Arabia or vice versa. Some Saudi residents may also maintain a second home in Bahrain for use at weekends.

Visitor numbers in 2016 reflect Bahrain’s broader economy with traveller groups including GCC neighbours, South Asian labour and military allies. Of the 12.3m total arrivals, 7.3m (60%) were Saudis and 2m (16%) were from the expatriate worker source countries of India, Pakistan, Bangladesh and the Philippines, with Indians accounting for 1.2m. The four biggest source markets beyond these countries were Kuwait (312,072), the UK (277,087), Egypt (263,681) and the US (248,707). Additionally, there were 229,878 arrivals from Jordan, 182,665 from Syria, 155,690 from Yemen and more than 137,000 Qataris.

GATEKEEPERS: The NPRA’s staff operate as the kingdom’s gatekeepers, collating data on the issuance of visas and visitor arrivals. Even at a time of downward pressure on government revenues caused by the prolonged reduction in global oil prices from mid-2014, Bahrain decided to reduce visa fees and to introduce measures that make travelling to the kingdom more straightforward for citizens of more countries.

From October 2014 to November 2016 a number of changes were made to fees, terms and conditions of visas. New single-entry and longer-term multiple-entry visas were introduced, and the pool of countries entitled to receive the permits increased from 38 to 114. In addition, citizens of 67 countries beyond the GCC became eligible to collect a visa on arrival.

People from key growth markets such as China and India are now able to apply online for e-visas before travel. The single-entry visa is valid for two weeks, while the longer-term visas allows tourists and business travellers to stay for a total of 90 days, up from 30 days under previous terms. Visa fees were also reduced from BD25 ($66) to BD5 ($13).

TOURIST ARRIVALS: In 2017 the BTEA signed an agreement with the Information and eGovernment Authority to implement a tourism expenditure survey to provide more granular detail for policymakers. In August 2017 the BTEA’s CEO, Shaikh Khaled bin Humood Al Khalifa, announced tourists arriving in the kingdom in the first half of 2017 had spent BD631.4m ($1.7bn), with average tourist expenditure of BD77 ($204) per day. The average length of stay (ALOS) was 2.3 nights with a total of 4.7m tourist nights. Hotels were the preferred form of accommodation for 70% of travellers entering through Bahrain International Airport and for 72% of people entering via the causeway. The BTEA revealed 57% of tourists stated holiday and leisure as the purpose of their visits, while 22% mentioned shopping, 9% were visiting friends and relatives, 7% were on business, 2% were receiving health care and 3% were coming to Bahrain for other reasons. The survey showed 63% of visitors to Bahrain in the first half of 2017 left within 24 hours.

The BTEA’s 2016-27 “Ours. Yours. Bahrain” tourism strategy is based on four pillars: attraction, awareness, access and accommodation. It aims to improve accessibility to the kingdom, attract more exhibitions and conferences, improve the quality of services in the hospitality sector and strengthen Bahrain’s position as an international destination for families.

NEW MARKETS: Since its inception in 2015 the BTEA has opened representative offices in target countries including Saudi Arabia, India, China and Germany. In spring 2017 the authority opened marketing offices in the UK and France. The UK was Bahrain’s third-largest tourism source market in 2016 with 277,087 British visitors travelling to Bahrain. The BTEA hired Hills Balfour to spearhead its UK marketing drive. In July 2017 the BTEA opened a representative office in Moscow to target the Russian market, with Bahrain’s ambassador to Russia and Zayed bin Rashid Alzayani, the minister of industry, commerce and tourism, attending alongside representatives from the BTEA and Gulf Air. “I believe the steps the BTEA has taken should yield results, because this is an ongoing marketing effort working with local marketing companies, which is a more robust approach than merely attending road shows and increasing the number of destinations Gulf Air serves,” Sarosh Aibara, COO of Elite Hospitality, a leading Bahrain-based hotel firm, told OBG.

EXTERNAL FACTORS: Although the tourism and travel sectors offer opportunities for Bahrain to develop industries that are not directly related to oil and gas, the country’s hospitality, retail and entertainment markets are not insulated from the broader impact of fluctuations in international oil prices. The hotels and restaurants sector recorded modest growth of 2% in 2016, and although its year-on-year performance expanded by 11.4% in the first three quarters of 2017, that reporting period also coincided with two significant external challenges.

From October 1, 2016 to the end of April 2017 the government of Saudi Arabia froze pay and cut bonuses for public sector workers. The austerity measures were part of the Saudi response to reduced oil revenues, but they had implications for Bahrain. “The biggest impact for us was in the food and beverage venues, where the reduction in spending by people from our biggest market was clearly visible,” Aibara told OBG. According to the Saudi investment bank Jadwa, in the first quarter of 2017 compensation of Saudi government employees fell by 5%, or BD510m ($1.4bn), with Jadwa calculating BD260m ($689.5m) was directly the result of the cut in allowances for public sector workers. “The economic situation in Saudi Arabia plays a significant role in shaping the local luxury retail market as 20% of customers are Saudi and these make up 50% of sales,” Mohammed Jaffar, chairman of Asia Jewellers, told OBG.

While these measures may have helped the government in Riyadh to curb expenses, they also removed a quarter of a billion dinars worth of spending power from Saudis, including the visitors who support malls, restaurants and hotels in Bahrain.

HOTEL NUMBERS: The EDB estimated there was a $10bn pipeline of new hotel development in Bahrain in 2017, representing a significant injection of new supply, particularly at the luxury end of the market.

In June 2017 the international real estate agency CBRE reported that there were more than 190 hotels and resorts in Bahrain, including 18 five-star hotels, 48 four-star properties and 35 in the three-star category, complemented by 81 serviced apartments and 11 resorts. CBRE estimates an additional 5100 rooms in the five-star category will be introduced by 2021.

The surge in supply coincides with gradually increasing demand. According to STR Global research, occupancy levels peaked at almost 80% in February 2009, falling to just over 20% the following February, but recovering partially to approximately 50% in February 2015. According to HotStats, a UK-based hospitality intelligence firm, occupancy levels in select hotels in Manama grew from 2015 to 2016, but revenues fell over the same period. It showed occupancy growing from 54% in 2015 to 55.7% in 2016, but the average room rate falling from $197.70 to $185.40 and revenue per available room declining from $166.80 to $158.60.

AIRPORT EXPANSION: A significant factor in Bahrain’s ability to attract more visitors is the capacity of its transport gateways. With billions of dollars in funding coming from its GCC neighbours, Bahrain’s international airport is being completely rebuilt, while a new causeway will create a second bridge to Saudi Arabia for rail and road travellers.

A joint venture between Dubai-listed Arabtec and Turkey’s TAV was awarded the $1.1bn contract to build the new terminal building at Bahrain International Airport by Bahrain Airport Company in January 2016. The project, which is scheduled to be completed in 2019, will see capacity at the airport increase from 10m passengers a year to 14m.

Bahrain Airport Company, a wholly owned subsidiary of the government’s holding firm Mumtalakat, has operated the facility since 2010. It has said it is the biggest transformation of the airport for 30 years and that it expects to see a three-fold increase in direct flights once the work is completed.

The Airport Modernisation Programme is being funded by Abu Dhabi Fund for Development. The 220,000-sq-metre terminal will have a 5000-sq-metre arrivals hall, five e-gates and 36 passport control booths to serve arriving passengers who will also have access to a 1000-sq-metre duty free store. The new 4600-sq-metre departure area is being equipped with 108 check-in desks and 28 security lanes. There will be 24 departure gates and a smart baggage handling system designed to increase efficiency and to handle a greater number of passengers.

ROUTES: The existing airport is used by 26 passenger airlines and nine cargo carriers. In 2016 it connected to 51 global destinations with 825 scheduled flights per week. The national carrier Gulf Air, which is also a subsidiary of Mumtalakat, has been operating since 1950 and serves 42 cities in 25 countries. From early 2018 the airline will start taking delivery of a new fleet of 39 aircraft from suppliers Boeing and Airbus.

Zayed bin Rashid Alzayani, the minister of industry, commerce and tourism, chairs the airline’s board, which appointed a number of new members in May 2017. The following month the airline’s CEO, Maher Salman Al Musallam, tendered his resignation after seven years with the airline. During his tenure at Gulf Air, the company’s debts were reduced by 88% from $520m in 2012 to $64m in June 2016. The airline has not published its financial results since June of 2016. In August 2017 Gulf Air announced the appointment of Waleed Abdul Hameed Al Alawi as deputy CEO. Gulf Air’s first Boeing 787-9 Dreamliner aircraft is due to be delivered in April 2018 to serve long-haul routes. Dreamliners will gradually replace the airline’s fleet of Airbus A330s. By the end of 2018 five of the new Boeing aircraft will have entered service with two more due to arrive in 2019.

NEW CAUSEWAY: While expanding the airport to service a broader spectrum of international markets may play a key role in developing Bahrain’s offering for tourists, for more than 30 years the lion’s share of visitors to the country have arrived by road over the King Fahd Causeway. In 2017 the causeway carried 12.7m inbound visitors to Bahrain, up nearly 3.9% from 2016. When it was built in 1986 the four-lane highway cost $800m, according to the EDB.

Although there are plans to boost throughput and capacity by increasing the number of passport control lanes, an ambitious scheme to build a second causeway offers the best prospect of removing the bottleneck, making the journey from major Saudi cities smoother and faster.

In June 2017 expressions of interest were invited for the construction of the King Hamad Causeway. More than 150 companies attended a meeting in Manama to hear about the proposals from representatives of the transport ministries of both Saudi Arabia and Bahrain. According to international media, attendees were told the public-private partnership (PPP) model would be used to finance the construction, which is expected to cost between $4bn and $5bn.

A document distributed at the meeting suggested traffic volumes between the two kingdoms could double by 2030. The King Hamad Causeway would carry both road and rail movement between the two kingdoms, connecting Bahrain to the GCC rail network with a new terminus being constructed in Salmabad, which is 80 km from Dammam in Saudi Arabia.

Existing passenger services for the 400-km journey from Riyadh to Dammam currently take four hours, which suggests rail travellers could reach Bahrain from the Saudi capital in less than five hours. The rail network was originally due to be completed in 2018, and although progress has been made in Saudi Arabia and the UAE, there have been delays elsewhere as well. In 2017 the deadline was pushed back to 2021.

Looking further ahead, the transport ministries of Bahrain and Saudi Arabia estimate that by 2050 the new railway between the two countries will carry 8m passengers a year, and be used to transport 600,000 containers and 13m tonnes of bulk freight from a cargo depot at Khalifa Bin Salman Port. The PPP arrangement for the construction could be on a design-build-transfer model or alternatively on a design-build-maintain-transfer basis. The contract is expected to last between 25 and 30 years. According to international press reports, advisors will be appointed at some point in early 2018 and pre-qualification requests will be issued in mid-2018.

CRUISE PASSENGERS: With plans in place to boost tourist arriving by road, rail and air, Bahrain is also striving to attract more visits by cruise liners, which are able to dock at its Khalifa Bin Salman Port. Bahrain has become a member of the Cruise Arabia Alliance in order to boost its profile in maritime tourism. For the 2017-18 cruise season Bahrain is expected to welcome 33 ships and almost 80,000 passengers.

In the first six months of 2017 the BTEA reported a 44% increase in passengers from cruise liners visiting the kingdom, with 43,191 tourists arriving by sea. In June 2017 the BTEA’ s Cruise Sector Committee met to discuss its marketing efforts. “During our participation in regional and international events, we were able to attract MSC Cruises Netherlands and Tom San Cruises to the kingdom for the first time,” Yousif Al Khan, director of Tourism Marketing and Promotions at the BTEA, told local press.

EDB data shows 92% of cruise ship visitors were European in 2016-17 and that 63% of those Europeans were German. Cruise ship visits generated an estimated BD2m ($5.3m) in revenue with average spending per tourist of BD21 ($56). “Our cruise offering is a real focus for the sector at the moment, and is growing at an encouraging rate,” EDB’s Bachar told OBG. “During the 2016-17 cruise season Bahrain welcomed a total of 43 ships and 90,000 tourists, 11 ships and 22,000 more passengers than the previous year.

PEARL TRAIL: While cruise operators look for destinations inland, Bahrain’s tourism chiefs are also turning to the coast and the country’s maritime heritage as a source of inspiration for visitors.

In October 2016 the BTEA launched the first Bahrain Sea Festival. A multimedia experience including an underwater simulator allowed visitors to explore Bahrain’s rich history of pearl diving, the mainstay of the economy for centuries until the widespread development of cultured pearls in East Asia in the early 20th century. Visitors were also treated to a display of decorated dhows and exhibitions about the traditional manufacture of fishing and diving equipment.

In a 2012 Bahrain’s pearling trail became a UNESCO World Heritage site, the second in Bahrain. A two-mile coastal path passes through 17 heritage buildings including the former residences of wealthy pearl merchants, shops, storehouses, a mosque and the Qal’at Bu Mahir fortress in Muharraq. It was from the fortress that pearling vessels used to set off for three oyster beds that also form part of the site along with the pearl and spice boutiques of Souq Al Qaisariya, which is being sympathetically restored.

ARCHAEOLOGICAL GEM: Another attraction for visitors interested in Bahrain’s long and distinct history is Qal’at al-Bahrain, the site of an ancient trading port and the capital of the Dilmun empire, which archaeologists believe was continuously occupied from 2300 BCE to the 16th century.

A more recent Portuguese fort is the most popular tourist attraction at the 16-ha site, a quarter of which has been excavated to date. Keen to leverage its ancient heritage, the Bahrain Authority for Culture and Antiquities described 2017 as Our Year of Archaeology to highlight the importance of the UNESCO sites, as well as a number of other locations in the country.

INVESTMENTS: The government holding company Mumtalakat is investing in some key new developments with an aggregate value of BH400m ($1.1bn) through its Edamah subsidiary. Edamah’s aim is to develop tourist attractions highlighting the country’s heritage and ecology, in order to help diversify the economy and create job opportunities.

In August 2017 the company announced it had completed nearly 5% of the land reclamation aspect of its Sa’ada development in Muharraq. The development will feature a harbourside promenade, boutiques, restaurants and an amphitheatre overlooking a marina.

The modern retail strip will be connected to the city’s traditional souq, and the development will include construction of a car park. Edamah is also behind schemes for a retail development in Isa Town, a multi-storey car park in Adliyah, the Versailles Plaza, and the Institute for Pearls and Gemstones at the World Trade Centre, also known as Danat. Edamah’s most ambitious ongoing development is the BD350m ($928.1m) development of an eco-friendly destination in the North Hawar islands, a project that is expected to create 3000 jobs. The 100-ha coastal resort is being built in two phases, with construction of a 350-key resort and 150 apartments and villas expected to start in 2017, to be handed over in 2019. This will be followed by a second period during which the Hawar mosque will be renovated, a bird research centre built along with a 150-key boutique hotel, 155 residential villas and a 200-key wellness spa.

The second phase is due to be handed over in 2021. “We aim to transform Hawar into an eco-friendly offering that intertwines with nature to provide an experience of barefoot luxury that is second to none,” Mireille Babti, Edamah’s chief development officer, told local press. “In doing so, the team is conscious of developing Northern Hawar in a holistic manner, promoting sustainability and innovation, while preserving the raw wilderness of the habitat.”

FOOD & BEVERAGE: The food and beverage sector plays a key role in Bahrain’s tourism sector, with the EDB estimating there were hundreds of restaurants for visitors to choose from in 2017. A popular destination for diners is Block 338, a largely pedestrianised district in the Adliya neighbourhood of Manama, which has a selection of international eateries alongside boutiques and art galleries.

The range of Bahraini dishes and foreign foods available is constantly expanding as new franchises enter the kingdom to serve new mixed-use real estate and retail developments.

These projects include The Terminal by Edamah, which will includes a multi-storey car park with 300 spaces in the Block 338, area as well as restaurants and cafes; First Bahrain Real Estate Development Company’s El Mercado development of 42 villas and townhouses; Albilad Real Estate’s Marina Promenade, which is part of its Water Garden City development in Seef; the $150m Harbour Row development by GFH; and The Avenues, developed by King Faisal Corniche Development Company (KFCDC).

The EDB noted new franchises opening in Bahrain included Wildside Texas BBQ, Angelina Paris and Hakkasan. In common with Dubai and Saudi Arabia, food trucks have been growing in popularity in Bahrain, with Marassi Al Bahrain, the country’s first publicly managed beach, attracting scores of food trucks to serve hungry swimmers and loungers.

In April 2017 rules were passed restricting ownership of the vehicles to Bahraini nationals, with vehicles subject to traffic regulations, food safety inspections and licensing. Bahrain is also able to service the entrepreneurs behind this Gulf food trend thanks to a Chinese manufacturing business which opened in 2016. “There is a company here that is specialising in the manufacturing of food trucks,” Bachar told OBG. “Rather than retrofitting older vehicles, China International Marine Containers (CIMC) produces vehicles designed for that specific purpose. The EDB identified CIMC, a leading Chinese supplier of logistics and energy equipment, as a potential investor following a roadshow in 2014.”

RETAIL ATTRACTIONS: With almost a quarter of visitors reporting shopping as the main purpose of their visit to the kingdom in the BTEA’s 2017 survey, the retail industry is one of the key pillars supporting the country’s tourism sector. According to data in the Middle East Council of Shopping Centres’ 2017 directory, seven of Bahrain’s malls reported annual visitors in excess of 1m people in 2016. City Centre Bahrain reportedly attracted 15m shoppers, which is more than 10 times the country’s 1.4m population. The Bahrain Mall in Manama has 5.2m visitors, followed closely by Ramli Mall with 4.7m.

Weekend visitors from Saudi Arabia account for many of these shoppers, and Bahrain felt an immediate impact in 2013 when its larger neighbour changed its weekend days from Thursday and Friday to Friday and Saturday, with 300,000 travellers from Saudi Arabia arriving over the first weekend break in July.

Families are not only drawn by the shops, but also by the family entertainment often available in Bahrain’s destination malls, including cinemas, which until recently were banned in Saudi Arabia. Tourists visiting Bahrain will have an enhanced choice of shopping experiences from 2018. The shores of Bahrain have been transformed by the KFCDC development, a 265,000-sq-metre waterfront shopping and entertainment district with 38,000 sq metres of gross leasable area (GLA) in The Avenues Mall, which opened at the end of 2017. By 2020 a new 210-key property, the Hilton Hotel and Residences, will open with direct access to the shopping centre.

The retail giant Landmark Group, which employs 55,000 people in 21 countries but started with one shop in Manama in 1973, is due to open its third Oasis Mall in Bahrain in 2018, with 26,281 sq metres of GLA and 67 outlets to serve the Juffair area. In 2018 IKEA will open its largest store in the Gulf, with the completion of a new BD48m ($127.3m) 37,000-sq-metre outlet in Salmabad. The company already has a store in Dhahran, on the other side of the causeway, but clearly sees a market for its household furnishing in Bahrain. It expects to receive 1.2m shoppers annually.

In 2019 Eagle Hills is due to open its Marassi Galleria mall, which will occupy a 183,000-sq-metre site with 115,000 sq metres of GLA serving the new waterfront Marassi Al Bahrain community being built in the north-west of the country. While the development of new retail outlets enhances Bahrain’s offering, some in the hospitality sector feel new and existing malls face more competition from around the GCC. “I welcome the opening of The Avenues, but we must remember there is already The Avenues in Kuwait, as well as other great malls in Saudi Arabia, and so we should be working harder to offer new forms of entertainment and events in the malls to ensure more people are drawn to Bahrain,” Aibara told OBG. “At the same time, Bahrain needs to do more to attract meetings, incentives, conferences and exhibitions customers back to the country.”

OUTLOOK: With significant improvements to its transport infrastructure, as well as investments in new hotels, restaurants and retail offerings set to come on-stream in the next few years, Bahrain is rapidly improving the supply of tourist attractions. At the same time, the country is also making a concerted effort to advertise itself in new markets to stimulate increased tourist demand from places further afield.