The F1 turn
Regarding tourism in Bahrain, there is a before and after the Grand Prix inaugural race on the 4th of April 2004. At a $150 million cost, the circuit has already delivered back that investment in excess to the kingdom and not only financially but also promotionally. “The direct economic impact for 2008 alone was $200 million. Taking into account the indirect impact we have covered a total of $1 billion over the years, Sheikh Salman Bin Isa Al-Khalifa, Chief Executive of Bahrain International Circuit (BIC) told GGC. It was a worldwide screen to show that Bahrain wasn´t only a small island in a rich oil production area. It was a vibrant economy located in a strategic crossroads and a modern country with an ancient culture that dates back six thousand years to the Dilmun civilisation. The message did get through and tourism experienced a phenomenal growth over the following years. “The idea started basically on a concord trip when travelling to the US HRH the Crown Prince who had the vision of building a racetrack met racer Jackie Stewart, a three times world champion, by chance. Stewart had just started his F1 team back in 1999 and invited the Crown Prince to Monaco where he finally met Bernie”, sheikh Salman told GGC. Bernie was no other than the British magnate Bernard Ecclestone, president and CEO of F1 Management and Administration.
Bahrain, with a population of 1,3 million people, had 102 hotels registered in 2012 and 9,578 available rooms up from the 8,364 of 2011. The occupancy rate stood at over 40 percent at four and five stars hotels but averaged 33 percent with an average stay of 1.8 nights. New five stars hotels will soon increase the existing 11 5stars establishments of the country with the government of Bahrain venturing with local and regional private investors in the development of new areas for tourism that will become a destination by them. Durrat Al Bahrain, a beachfront development in the Southeast of Bahrain, and Al Areen Desert Spa and Resort near the F1 track are some of them. However tourism was affected by the Arab spring spill over to Bahrain in 2011 that lead to widespread protests and street demonstrations. The F1 Grand Prix had to be cancelled in 2012 with the sector experiencing significant revenue losses but came back to the Island in 2013 amidst a mellowed but still tense environment. Up to date the sector continues increasing its workforce and now accounts for 77 thousand people, around 12 percent of the total Bahrain´s workforce.
Connectivity of the country has been threatened lately with the closure the low cost carrier of the island Bahrain Air in 2013 and the restructuring of loss-making national carrier Gulf Air in order to become more efficient and compete with the increasing regional players that dominate the market such as Emirates or Qatar Airways. However, the expansion project of Bahrain International Airport (BIA) and the general restructuring of the sector promises to improve passenger numbers in the coming years. In 2013, the country is expected to attract 6,468,000 international tourist arrivals and by 2023, international tourist arrivals are forecast to total 9,051,000, generating expenditure of BHD1, 105.8mn according to the latest report on Bahrain of the World Travel Tourism Council.
A cultural destination
In 2008, four years after the Bahrain International Circuit was inaugurated, Sheikha Mai bint Mohammed Al Khalifa was appointed as the first Minister of Information and Culture in a GCC country. She has not only played a major role for Arab women becoming also one of the most powerful women of the Arab World according to Forbes in 2005. She has also significantly contributed to the development and preservation of tourism in Bahrain with an emphasis on culture and heritage that aims to preserve Bahrain ancient traces. Her project “investing in culture,” created a window of opportunity that linked investors to the nation´s cultural sector. Young talents and artists are benefiting for Sheikha Mai policies towards the promotion of national art locally and abroad. The culmination of her efforts was the inauguration of $50 million Bahrain National Amphitheatre in November 2012. With just over 1,000 seats the National Theatre of Bahrain is about the largest of the area and has already hosted performances of the rank of Spanish tenor Placido Domingo. In 2012 Bahrain was chosen the “Arabian Capital of Culture”.
Key Facts of the Tourism Industry in Bahrain
World Travel Tourism Council (WTTC)
2013 ANNUAL RESEARCH
GDP direct contribution
The direct contribution of Travel & Tourism to GDP was BHD538.3mn (5.0% of
total GDP) in 2012, and is forecast to rise by 6.3% in 2013, and to rise by 4.4% pa, from 2013-2023, to BHD875.8mn in 2023 (in constant 2012 prices).
GDP total contribution
The total contribution of Travel & Tourism to GDP was BHD1,351.7mn (12.5% of GDP) in 2012, and is forecast to rise by 6.9% in 2013, and to rise by 4.6% pa to BHD2,256.6mn in 2023.
Employment direct contribution
In 2012 Travel & Tourism directly supported 32,000 jobs (5.2% of total employment). This is expected to rise by 7.1% in 2013 and rise by 2.8% pa to 45,000 jobs (6.1% of total employment) in 2023.
Employment total contribution
In 2012, the total contribution of Travel & Tourism to employment, including jobs indirectly supported by the industry, was 12.5% of total employment (77,000 jobs). This is expected to rise by 7.6% in 2013 to 83,000 jobs and rise by 2.8% pa to 110,000 jobs in 2023 (14.7% of total).
Visitor exports generated BHD704.9mn (7.6% of total exports) in 2012. This is forecast to grow by 3.4% in 2013, and grow by 4.3% pa, from 2013-2023, to BHD1, 105.8mn in 2023 (9.1% of total).
Travel & Tourism investment in 2012 was BHD196.3mn, or 7.9% of total investment. It should rise by 13.2% in 2013, and rise by 4.9% pa over the next ten years to BHD358.2mn in 2023 (8.7% of total).
A diversification tool
The renowned Bahraini hospitality is a loud secret since ancient times. Foreign merchants and travellers have always been part of the daily life of the islander. Modern tourism started in Bahrain before Dubai was even there. Although forgotten during the golden years of high oil revenues, the sector became part of the government´s diversification process to reduce the country´s total reliance in a single commodity. In line with this, the Economic Vision 2030 released in 2008 also tapped into the necessity of enhancing the sector with the active participation of the private sector. As a result, tourism has become a greater contributor to the kingdom´s revenues in recent years. In 2012 it contributed with 12, 5 percent to the country´s GDP according to a report published by the World Travel and Tourism Council (WTTC) and employs 77 thousand people. Built on the shoulders of a robust legal environment, a relatively liberal society, a strategic location and a rich history and culture as a trading centre, the sector´s benefits mainly from regional tourism especially from Saudi Arabia, linked to Bahrain through a Caseway over the sea, and Kuwait. A bridge to Qatar, the Friendship Bridge, is expected to be completed before 2022 and will boost the presence of Qatari visitors in Bahrain attracted by a more liberal atmosphere and better shopping. However, international tourism figures indicate that foreigners are also increasingly interested in visiting the island. Since the inauguration of the cruise terminal of the $360 million Khalifa bin Salman Port (KBSP) in 2009, cruise lines have started to offer stopovers to around 100,000 passengers into the tiny island yearly.
Creating a health tourism destination and MICE hub
Health Tourism is already a reality in Bahrain with the upcoming development of Dilmunia Health Island representing a major push to the sector. As a major crossroad centre of trade since ancient times, the Meetings, Incentives, Convention and Exhibitions (MICE) industry is therefore, part of Bahrain´s trading heritage. Acting as a gateway to the Gulf, exhibitors not only see Bahrain as the potential client but the broader region and in particular Saudi Arabia, linked to the island through a 26 kms causeway. Although Dubai has recently taken the lead in the MICE industry of the region, certainly Bahrain follows suit. The country´s location and infrastructure connections make it easier for regional players to meet in Bahrain under a relatively more liberal and relax atmosphere. The road connection to oil rich Saudi Arabia plays in favour of Bahrain with fewer restrictions to visa issuing procedures. The future plan to connect the island to the largest LNG exporter of the word, Qatar, will only increase MICE traffic in Bahrain. In light of the increased demand of exhibition and meeting space, a new flagship state of the art government backed facility is being developed at a total cost of $1.1 billion. The estimated value of the MICE industry worldwide amounts to around $56 bn yearly and is constantly growing. In Bahrain, the estimated impact generated by MICE events hosted at the Bahrain International Exhibition and Convention Centre (BIECC) floats at around $150 million per year. The new Expo City will triple the impact of the MICE industry in Bahrain´s economy and will increase the area covered by BIECC by nearly ten-fold. With 145,000 sqm of space, or the equivalent to 21 football fields, expo@bahrain has the capacity to hold 5,000 plus delegates and up to 30,000 visitors daily, with the design allowing for potential future expansion to meet growing demand. Several Hotels ranging from five to three stars will offer a combined capacity of 1,200 rooms with different amenities designed around them. It is located adjacent to Bahrain International Circuit (BIC) in Sakhir City and only at 15 minutes drive to the country´s premier destination, Riffa Views built around Bahrain Royal Golf Course. Al Areen Spa and Resort and the Sofitel Hotel & Spa are within close distance too. The new cluster of tourism attractions located in the Southern Governorate, South West Bahrain, built around an Expo City will allow Bahrain to hold unique events at competitive prices and in a privilege location.
Our latest investment report on Kuwait was recently published in one of the leading Spanish dailies, ABC. FindMe in Kuwait explores the economic perspectives of Kuwait and the country´s future plans to compete with its fast developing neighbours. Once the leading country of the Gulf, Kuwait has remained silent for the past decade. And although many would like to see faster changes, Kuwait is moving, at its pace, to them. Inexorably. Learn about who is who in Kuwait and read what the leaders say about their own future in our upcoming release: FindMe in Kuwait Mobile app.
Stay tuned - Stay Ahead
Global Gulf Consulting has concluded its latest production on Bahrain, FindMe in Bahrain giving the country a fresh approach after a couple of difficult years of local demonstrations that matched the global recession. Bahrain is a small island in the Arabian Gulf with an incredible potential for logistics, industries and tourism. FindMe in Bahrain was supported by both the public and private sector of Bahrain. Banagas, Nass Corporation, BBK and DHL were GGC strategic partners in the development of the series among others.
FindMe in Bahrain is available at the local bookstores Jashamal and online as well as in the Apple Store. It is a full business leisure and business guide for any investor or visitor interested in traveling to Bahrain or for those that already live there.
FindMe in Saudi offers a multi-faceted overview combining business and leisure, economy and heritage. The book aims to capture the current development of Saudi Arabia in the words of the people who live and work there. It is an authoritative source of information for investors, businessmen and travellers produced to firmly position KSA as an attractive investment destination.
In contains general information about the country´ economic performance and who is who as a sectorial overview and a leisure guide.
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