Its neighbours may be bigger and flashier, but Bahrain has big plans to ensure it remains a leader in the Gulf. Laura Collacott reports
Size isn’t everything. When the Middle Eastern bloc decided to diversify away from its dizzying oil wealth, Bahrain was the first to capitalise. The diminutive but liberal kingdom – tucked into the Arabian Gulf next to the Qatari peninsula, just a short hop across the water from Saudi Arabia – was a true regional pioneer. By embracing finance, manufacturing, telecoms and logistics in the nineties, and taking full advantage of the dollars sloshing around the region in the noughties’ boom years, it became a force to be reckoned with in the Gulf.
With economic prosperity and foreign investment has come a buzzing business destination. Visit Manama, the capital, and you’ll find a modern city that has held on firmly to its Arabic roots – sleek restaurants, bars and nightspots sit comfortably alongside traditional souks, coffee shops and shisha lounges. Get out of the city into the desert, meanwhile, and you’ll find some fascinating ancient sites that point to its rich heritage (for Four-Hour guides to Manama, see businesstraveller.com/city-guides).
Still, over the past decade, the other GCC (Gulf Co-operation Council) countries of Kuwait, Oman, Qatar, Saudi Arabia and the UAE have begun to catch up – Dubai took a slice of the Islamic finance pie, while Abu Dhabi is positioning itself as a cultural hub and has gained a Formula One Grand Prix fixture to rival Bahrain’s own. Doha has been swiftly developing its knowledge industries and tourism infrastructure, and Saudi has been liberalising its business practices to attract foreign investment.
So Bahrain has been squeezed – but not squeezed out, even amid the worldwide recession. “Bahrain’s global reputation as a liberal, business-friendly hub for the Middle East helped it to continue to attract international investment during the downturn,” says Kamal Ahmed, chief operating officer of the Bahrain Economic Development Board (BECD), a semi-private autonomous agency that works to develop business in the kingdom. “We achieved 3.1 per cent growth last year [2009], and that figure is forecast to rise to 4 per cent this year [2010].”
They are figures the West could only dream of – but that’s not to say Bahrain was immune from the downturn’s effects. Elie Younes, vice-president of business development in the Middle East and Africa for the Rezidor Hotel Group, which has the Diplomat Radisson Blu here (see panel, page 65), says: “It would be naive to say the recession did not affect any market in the GCC in one way or another.” But he believes Bahrain managed to mitigate the worst of the impact as “it had a more prudent approach to expansion plans compared with other markets”. He also points to the country’s open economy compared with some of its neighbours.
Bahrain became synonymous with Middle Eastern finance in the 1990s, when it sensibly touted its geopolitical location between East and West to the international business world, and its centrality within the GCC region to Islamic financiers. Today, financial services account for about 25 per cent of its GDP, and oil and gas just under 15 per cent.
The kingdom is also putting in place a series of ambitious projects to ensure it stays not only a regional financial leader, but a key player in areas such as tourism, meetings and the medical sector. While, inevitably, many of these developments have been delayed by the financial crisis, they are continuing in the main.
First up, it is consolidating its commercial position by building the US$1.5 billion Bahrain Financial Harbour. In the heart of Manama, this attractive new waterfront project boasts offices, a marina, a shopping mall, upmarket residences, a performance centre housing the Royal Opera House, and office space leased in 30 brand-new, purpose-built units.
At the moment, tourism represents about 12 per cent of Bahrain’s GDP, a figure it hopes to increase to 25 per cent over the next decade. Younes says: “Although it attracts a sizeable share [of visitors] from Saudi Arabia and by hosting the Grand Prix, I think there is potential to improve.”
Bringing in new events is one way of doing this. In January, Bahrain welcomes a new European Tour golf tournament to the annual calendar – the Volvo Golf Champions – which will take place at the newly redeveloped Montgomerie Course. And in June it will host the yearly World Heritage Committee session for UNESCO, which chose the kingdom as its headquarters for the Arab world.
Ahmed of the BECD says: “Events and a growing tourism sector have a key role to play in achieving the ambitions of Bahrain’s Vision 2030, the blueprint for the development of the country’s economy, government and wider society over the coming decades.”
Meanwhile, the new Expo@Bahrain development, incorporating an exhibition and convention centre, aims to take a slice of the burgeoning MICE sector from competitors elsewhere in the Gulf. Set to open in 2013 after breaking ground in 2009, it will usurp the existing Bahrain International Exhibition and Convention Centre as the kingdom’s flagship meeting venue, offering ten times more exhibition space (145,000 sqm) and capacity for up to 30,000 visitors daily. Thanks to its proximity to the Formula One track, event organisers will also be able to host racing-themed events, putting it in competition with Abu Dhabi’s new offering at Yas Marina Circuit.
To accommodate these new visitors, Bahrain continues to expand its hotel offering. The K hotel, a 237-room four-star deluxe property in Manama’s Juffair district, is set to open this January. Also launching in 2011 is a 323-room Renaissance hotel by Marriott, located on Amwaj Islands – reclaimed land masses off the north coast of Muharraq Island, close to the airport; the 240-room Holiday Inn Al Seef; a 262-room beach resort from Sofitel on the Zallaq Highway, 25 minutes from Manama City; and the 407-room Rotana on Manama’s Government Avenue.
Medical tourism is another area Bahrain is keen to get involved in. Dilmunia Health Island, a 125-hectare land reclamation project of the type so beloved in the Middle East, is being built to the north-east. Estimated to be complete in 2013, the US$69 million development will provide facilities such as diabetics and sports medicine centres, a learning difficulties facility, a neonatal intensive care unit and a wellness centre. Travelling companions will be able to book into an adjacent hotel resort complete with spas, residential units and leisure facilities.
A number of mixed-use developments are in the pipeline too. Also off the north shore of Manama is the island development of Bahrain Bay, which will be connected to the mainland by two bridges. Intended as a new metropolitan hub, it will feature a mix of residential, commercial and retail spaces clustered around waterside promenades, along with a 260-room Four Seasons property. Bahrain Bay was originally due to be finished in 2010 but phased completion is now intended from 2012 onwards, with the Four Seasons due to open in 2013.
To the south, the Al Areen desert-living development continues to tick new phases off the list and anticipates completion by mid-2013. The Bay will provide expatriates and locals with sparkling new residential, commercial, health, hospitality and entertainment venues, such as the Sarab Al Areen commercial centre and Al Waha resort, a luxury property comprising guestrooms, serviced apartments and residences. The high-end 78-villa Al Areen Palace and Spa is already here, having been operated until recently by Banyan Tree, and the Lost Paradise of Dilmun water park is now up and running.
In the longer term, the 12 sq km Diyar Al Muharraq project is set to expand the area of Bahrain’s second city, Muharraq. Comprising one large island and five smaller ones, with a total waterfront area of 40km, it will host commercial space, international five-star hotels, shopping malls and up to 30,000 homes. Reclamation work for phase one was expected to be finished before the end of 2010, although the full development won’t be concluded until 2020.
The airport is conveniently located near Diyar Al Muharraq, as well as the US$2 billion Bahrain Investment Wharf, which is almost complete. Infrastructure and logistics are sectors the kingdom has been keenly developing, taking advantage of its strong strategic position geographically.
Ahmed says: “Bahrain’s location as the Gateway to the Gulf gives investors access to the trillion-dollar GCC market. The Economist Intelligence Unit forecasts that this figure will double to US$2 trillion by 2020. We believe we can act as a true Gateway to the Gulf for international businesses, as access to Saudi Arabia is particularly good and Bahrain is also an ideal business hub for the wider region due to its excellent transport network and friendly ties with neighbours.”
Transport is seeing further improvement – 20 minutes from Al Areen, the King Fahd Causeway that links Bahrain to mainland Saudi is being expanded to increase capacity from 18 million vehicles a year to 100 million – some 50,000 cars already cross it daily, bringing goods, workers and tourists to and from the kingdom. The work is due for completion in about five years’ time.
Even more significant for Bahrain’s strategic position is the forthcoming Bahrain-Qatar Friendship Bridge. Also scheduled to be ready by 2015, this US$4.5 billion project will connect the two countries via a 40km bridge, set to be the longest of its kind in the world. It is also intended to carry the local section of the forthcoming inter-GCC railway network, which, when finished in 2017, should slash transport times between the member states for both passengers and cargo. And if the US$10 billion high-speed track being debated is approved, passengers may be able to travel from Kuwait to Muscat via Bahrain in little more than six hours, without so much as skirting an airport.
Oliver Cornock, regional editor in the Gulf for publishing and consulting firm the Oxford Business Group (oxfordbusinessgroup.com), says: “The centrality of this causeway to economic development can hardly be over-estimated. When it opens, it will reduce travel time between Bahrain and the countries south of it from about five hours to less than an hour, driving up commerce and communication to the benefit of all parties. It will increase options for every Bahraini company and citizen, allowing them to access hitherto inconvenient markets.”
At the same time, the authorities are steadily expanding the airport. In 2010 it began a £3 billion endeavour to triple annual passenger capacity over the next 30 years from five million to 27 million. Under phase one, slated to be complete by 2013, the airport will increase its capacity to 12-15 million a year and increase the number of aircraft stands from 46 to 64, with two dedicated to the A380 superjumbo.
If all these plans come together, there’s no doubt Bahrain will keep its place as a powerful force in the region – whatever tricks its neighbours may have up their sleeves.
WHERE TO STAY
L’Hotel
One of Bahrain’s few boutique-style properties and also one of the newer kids on the block, L’Hotel opened in 2009 and provides travellers who don’t want the cookie-cutter approach with a plush home-from-home. It’s located on King Mohammed VI Avenue, close enough to the centre of Manama to be convenient, while being slightly removed from the crush. Rooms come with marshmallow-soft beds, as well as the standard amenities – wifi (BD10/£17 per 24 hours or free in the lobby), flatscreen TVs, satellite channels, minibars and safes. L’Avenue restaurant is a chic venue for entertaining clients.
- Al Seef, King Mohammed VI Avenue, Manama; tel +97 317 567 222; lhotelbahrain.info
- Rooms from BD144 (£239)
Ritz-Carlton Bahrain
The Ritz-Carlton has the relaxed feel of a resort, thanks to its location on Manama Bay, yet is minutes from the airport and the centre of town. The décor is classically sophisticated. Rooms are serviced twice daily and have high-speed wired/wifi internet (BD15/£25 for 24 hours or free on Club floors), and interactive LCD TVs. A printing station allows you to check in for your flight and print your boarding pass. Gentlemen may like to meet over a cigar and a nightcap at the Burlington Club, where leather sofas and winged chairs create the atmosphere of an old boy’s club (without excluding the ladies).
- Manama; tel +97 317 580 000; ritzcarlton.com
- Rooms from BD169 (£280)
Gulf Hotel Bahrain
Open since 1969, the Gulf was one of the original five-stars in Bahrain, and offers the location – in the commercial district of Adliya, five minutes from downtown – and service that business travellers need. The newly renovated interiors are elegant and there are some stunning views over the city. There are eight restaurants with a range of cuisines as well as direct access to the 4,780 sqm Gulf Convention Centre. Wifi costs BD10/£16 for 24 hours.
- Manama; tel +97 317 713 000; gulfhotelbahrain.com
- Rooms from BD72 (£118)
Diplomat Radisson Blu hotel, residences and spa
The Diplomat Radisson Blu is only five minutes from Bahrain Financial Harbour. The Standard rooms are 35 sqm but if you upgrade to a Deluxe room, you double your space and get a fully equipped kitchen with a washing machine, Nespresso coffee maker and a separate living room. Free high-speed wifi internet is provided.
- Manama; tel +97 317 531 666; radissonblu.com
- Rooms from BD102 (£168)
