It might be small, but the Arabian island nation of Bahrain seeks to leverage its history, location, culture and ease of business and visitation to grow its hotel numbers, quality and offerings.
REPORT FROM BAHRAIN—The Kingdom of Bahrain, an island-nation of 1.1 million in the Arabian (Persian) Gulf, has enacted initiatives to increase its hotel room count, international airport passenger numbers and the percentage of gross domestic product deriving from tourism and hospitality, according to sources.
Ali Ghulam Murtaza, director of real estate, tourism and leisure for the Bahrain Economic Development Board, said the country—which is connected to Saudi Arabia by a 16-mile-long road causeway—is well-situated and well-prepared to reach these goals.
“Bahrain is a hidden story with 5,000 years of history and has been in the hospitality business for years,” he said.
That pedigree is being rapidly updated.
Murtaza said currently $13 billion of hotel investment is in play in 14 projects—including assets from Emaar Hospitality Group and Dusit International, a 215-room Fairmont and the world’s largest Wyndham Garden hotel, with 441 rooms.
On 27 February, Jumeirah Hotels & Resorts opened its first property in Bahrain, the 167-room Jumeirah Royal Saray Bahrain, owned by Bahrain real esate investment company Sevens Holding SPC.
Approximately $32 billion has been earmarked for infrastructure projects, which include a second causeway to Saudi Arabia, Murtaza said. He added that in 2017, tourism accounted for 6.3% of Bahrain’s gross domestic product.
Murtaza also said 66% of visitors—including those from the U.S., United Kingdom, China and Russia—can receive visas on arrival. Visas can also be administered via the Bahraini government’s website.
“Oil has been historically 20% of GDP, but we always had far greater diversification than the (United Arab Emirates),” Murtaza added.
Cranes in Bahrain
Such numbers, ambition and growth has not been lost on hoteliers.
Andrew Shaw, assistant VP of development for Europe, the Middle East and Africa at Thai hotel firm Dusit International, is opening the company’s first Bahrain hotel, the 195-room DusitD2 City Centre, later this year.
Shaw is bullish on Bahrain.
“Bahrain remains a strategic focus, and we will continue to explore opportunities to grow our portfolio across the kingdom,” he said.
Shaw also noted that the DusitD2 City Centre will incorporate the company’s Thai style and service.
As with other Middle Eastern markets, there will be a substantial push for midscale hotel development in Bahrain, Murtaza said. Most of Bahrain’s hotels are owned by family interests, he added.
“Our main focuses will be developing gateway cities and attracting families,” Murtaza said.
As for the current state of Bahrain’s hotel industry, he said, average daily rate “is good; occupancy not so. Weekends produce the highest ADRs, and overall the market is stable.”
Nisrine Karazi, senior director of development for the Middle East and North Africa at Hilton, said she is also excited about the hotel opportunities in Bahrain. While the market is small and historically has offered little opportunities for conversions, that’s changing, buoyed by the recent discovery of huge shale resources.
Hilton has big plans for the country, she said.
“We are planning to enter with upscale, upper-upscale, luxury and focused-service brands,” Karazi said. “Bahrain has positioned itself well to guests, and not only those from Saudi Arabia.”
In 2017, Hilton and owner KFCD/Mabanee Company S.A.K. signed an agreement for the 210-room Hilton Bahrain Bay Hotel & Residences, which will open in 2020 at shopping mall The Avenues in Bahrain’s capital Manama.
Hilton also is working with Kuwait-based Mabanee on Waldorf Astoria and Hilton Garden Inn properties at the mall.
Shaw pointed to various aspects of Bahrain he sees as conducive—it being a financial hub, its fast development and cross-border and transit trade, its simple and flexible visa procedures and its favorable business environment.
“Bahrain remains a solid place to do business … (and) offers a wealth of culture with its UNESCO heritage sites contrasted against modern landmarks, including the World Trade Center,” he said.
Among other attractions, Bahrain also hosts Formula 1 races and is a significant destination for meetings, incentives, conferences and exhibitions business, he said.
“It currently attracts visitor numbers of almost 10 times its resident population, and it targets to increase this from 14 million to 20 million and increase the capacity of its international airport from 9 million to 14 million by 2020,” Shaw said. “A presence in Bahrain will certainly assist with the expansion of (Dusit’s) brands into other Gulf Cooperation Council countries.”
Traditionally, one of Bahrain’s treasures has been its pearl industry. While that has largely disappeared, Murtaza said he sees opportunities for visitors.
“We recently opened up pearl diving to visitors, who get to keep what they find if they have been lucky,” he said.
Another Bahraini plus, according to Murtaza, is its diaspora.
“Bahrain exports a lot of its talent; the bond between Bahrain and other Arabian nations is very strong, and we have a good relationship with the U.S.,” he said.
Bahrain hotel performance
According to data from STR, parent company of Hotel News Now, full-year 2017 hotel occupancy in Bahrain was 51.5%, a 3% year-over-year decline.
For all of Bahrain, ADR dropped 8.3% to 65.95 Bahraini dinars ($175.40) for full-year 2017, while RevPAR fell 11% to 33.93 dinars ($90.24).
In Manama, 2017 occupancy decreased 2.3% to 51.5%, with ADR falling 8.3% to 63.05 dinars ($167.69) and RevPAR falling 10.4% to 32.50 dinars ($86.44).