Back in 2021, Bahrain embarked on an economic reform plan that set out to invest around US$30 billion in strategic projects, boost employment among its citizens and attract US$2.5 billion by way of foreign direct investment by 2023. The path to growing its economy and steering it away from a dependence on oil has begun to reap rich rewards. In 2022, for example, Bahrain’s economy grew 4.9 per cent – the highest rate since 2013. But the highlight of that performance was a notable 6.2 per cent increase in its non-oil real gross domestic product.

A significant driver of that has been the island nation’s tourism sector. “The economic recovery plan created a very clear roadmap for initiatives to entice investors to invest more in the kingdom and also to streamline all the government initiatives to aid Bahrain in reaching [the goals of] its fiscal balance programme that was launched back in 2018. Part of the economic recovery plan was to initiate the tourism strategy that spans from 2022 to 2026,” Her Excellency Fatima bint Jaafar Al Sairafi, Minister of Tourism for Bahrain, told Business Traveller Middle East in an exclusive interview.

That five-year tourism strategy which kicked off in 2022 was conceived with the goal of reaching 14.1 million visitors annually by 2026. One of the core objectives of that strategy was to increase the contribution of the tourism sector to the country’s GDP to 11.4 per cent by 2026. Those efforts are off to a healthy start with tourism revenues in Bahrain estimated to have reached US$3.98 billion for 2022 – approximately 50 per cent over the projected target figure for the year. “Tourism in Bahrain was an exceptional sector in 2022. When we set our [tourism] strategy, we set ourselves up against very ambitious key performance indicators, one of them being the tourism revenues. We set a target for tourism revenues for the year 2022 to reach about US$2.6 billion. What we actually achieved was about US$4 billion, and that just gives you an indicator that Bahrain is really moving forward when it comes to diversifying its economy. And if we go back to the KPIs of the economic recovery plan, you will notice that the contribution of the non-oil sector in Bahrain has reached over 83 per cent,” says Al Sairafi.

Bahrain participated in the Arabian Travel Market 2023 (Image: Supplied by Bahrain Tourism and Exhibitions Authority)
Bahrain participated in the Arabian Travel Market 2023 (Image: Supplied by Bahrain Tourism and Exhibitions Authority)

The backbone of growth
Key to driving tourism in the kingdom is its hospitality offerings. Nearly a decade ago, the Four Seasons Hotel Bahrain Bay opened in Manama, which also happens to have the second-largest spa in Four Seasons’ global portfolio. More recently, Four Seasons partnered with Bahrain-based real estate firm Bayside Developments to build the Four Seasons Private Residences Bahrain Bay which will feature 112 bespoke homes and will be linked by a private pedestrian bridge to the main hotel. In November last year, the Jumeirah Group opened the 196-key Jumeirah Gulf of Bahrain Resort and Spa which has a strong focus on wellness by way of its amenities and programmes.

“Historically, tourism has accounted for about 6.5-7 per cent of the GDP. But I’d want to focus on the growth rate when it comes to hotels and restaurants, which are a major investment in Bahrain. The growth rate in hotels and restaurants is the highest among all industries in the kingdom. We’re looking at the growth rates that were announced in 2022 of around 14 per cent,” notes Al Sairafi.

“Hospitality has always been one of the projects that Bahrain has worked on very closely with the private sector. As we speak, we are looking at over 130 hotels and resorts in Bahrain. For a small island, you’re looking at quite a significant number, which obviously is going to increase over the next few years. It’s one of the key initiatives of our tourism strategy.”

At present, the government is focused on developing Hawar Island which will include a wildlife sanctuary and is a 45-minute boat ride from the mainland. On the Hawar Island, is the upcoming Mantis Bahrain Hawar Island Hotel and Resort. For it, Accor has partnered with Edamah (Bahrain Real Estate Investment Company), the real estate arm of Mumtalakat Holding Company which is the sovereign wealth fund of Bahrain. “We’re working very closely with the Mantis resort which is due to open in 2023. It will create an eco-tourism industry that many people can come and enjoy as part of [the kingdom’s] leisure tourism offerings,” says Al Sairafi. The 72-key property will include overwater villas as well as five dining concepts, and will be adjacent to the wildlife sanctuary which features sand gazelles and Arabian oryx on land, besides colourful coral reefs and endangered dugongs within its marine ecosystem.

Bahrain World Trade Centre (Image: Supplied by Bahrain Tourism and Exhibitions Authority)
Bahrain World Trade Centre (Image: Supplied by Bahrain Tourism and Exhibitions Authority)

Eco-tourism is gaining a steady foothold in Bahrain, and there are already three UNESCO Heritage Sites: Dilmun Burial Mounds; Pearling, Testimony of an Island Economy; and Qal’at al-Bahrain – Ancient Harbour and Capital of Dilmun.

Parallelly, there are other avenues of tourism such as sports tourism being developed in the kingdom, with the highlight being the annual F1 race that speeds across the Bahrain International Circuit in Sakhir. Now, the country is also keen to attract business travellers. To that end, in November last year, the kingdom opened the Exhibition World Bahrain. It is the country’s largest exhibition and conference centre and features 95,000 sqm of floor exhibition space, a grand hall that can seat 4,000 participants, a total of 10 exhibition halls, 94 meeting rooms and 25 F&B and retail outlets. “Exhibition World Bahrain is the biggest exhibition centre in the Middle East. One of the main reasons why we launched the project is because we wanted to position Bahrain as a MICE hub in the region and attract more international conventions, exhibitions and events, thereby taking advantage of visiting business travellers and having them increase the length of stay so that they can enjoy Bahrain as a leisure tourism destination as well,” says the tourism minister.

Strategic delivery
Bringing visitors into the kingdom is the country’s national carrier – Gulf Air – which is one of the oldest GCC airlines, having commenced operations in 1950. Significantly, with the kingdom having signed onto the Abraham Accords in 2020, Gulf Air began operating flights to Tel Aviv in Israel more recently. It is aware that its fleet of around three dozen aircraft won’t allow its route destination network to grow rapidly and hence it has entered into strategic partnerships with regional airlines including Emirates (it launched a codeshare last November), Oman Air and Etihad.

Gulf Air’s base of Bahrain International Airport hosted 6.9 million passengers in 2022, a 125 per cent increase over the 3 million passengers it welcomed the previous year. Last year, the country also officially opened its new 210,000 sqm terminal which will increase the airport’s capacity to 14 million passengers.

“One of our major partners is our national carrier, Gulf Air. We work very closely with them to promote Bahrain as a tourism destination. As part of our strategy, we have identified 14 key target markets that we’re going to focus on over the next 14 years to attract more tourists,” says Al Sairafi. “We looked at countries that have a very high aptitude for business and leisure travel. We worked closely with Gulf Air to identify those markets and to attract more tourists from there. The target markets that we’re looking at include all the countries in the GCC, as well as some in Europe – mainly Italy, Spain, Germany, and the UK – as well as India and Egypt. Focusing on those target markets, we went a step further to sign with over 100 tour operators internationally, so that we can market and position Bahrain as an international tourism destination.” A country within Europe that is of particular interest as a source market for Bahrain, says the minister, is Spain.

However, GCC traffic is going to remain the biggest feeder market into Bahrain. Bahrain is the smallest among its GCC neighbours, but is positioned advantageously geographically. It shares a road border with Saudi Arabia, while a flight to Dubai from Manama is around 1.15 hours and to Doha is only 45 minutes. “Our biggest source market is the GCC. The GCC countries have realised that we’re all interdependent. And if we want to increase the footfall in our countries, the best way to do it is to co-promote our countries as one tourism destination, instead of promoting our countries independently.

“We’ve started working on that with Saudi Arabia and the UAE, where we have created packages that promote Bahrain as a unified destination along with its neighbouring countries. For example, a tourist can get a package where they can visit Bahrain for four days and continue their journey to Saudi Arabia, and stay there for another four days. And this has shown significant revenues for most of the countries in GCC when we co-promote our destinations.”

Exhibition World Bahrain (Image: Supplied by Bahrain Tourism and Exhibitions Authority)
Exhibition World Bahrain (Image: Supplied by Bahrain Tourism and Exhibitions Authority)

During Al Sairafi’s visit to the Arabian Travel Market (ATM) in Dubai this year, she met with His Excellency Abdullah bin Touq Al Marri, UAE’s Minister of Economy, to explore ways to further strengthen tourism ties between the two countries. Already, the number of Bahraini travellers to the UAE last year stood at nearly 100,000, a 33 per cent increase compared to the 75,000 visitors in 2021. At present, there are 60 flights between the two countries per week. Dubai-based carrier Emirates alone serves Bahrain with 21 weekly flights. At the ATM, Emirates signed an MoU with the Bahrain Tourism and Exhibitions Authority to broaden Bahrain’s appeal among its key target markets including Spain, Japan, Korea, Hungary, and Poland, as well as grow awareness of Bahrain as a weekend getaway for travellers from Israel and the UAE. Saudi Arabia meanwhile is also working closely with Bahrain to build tourism ties. With Saudi Arabia aiming to attract 100 million visitors annually by 2030, the prospect of an even a few percentage of those tourists crossing the King Fahd Causeway into Bahrain, if even for a day, could lead to significant advantages for Bahrain’s tourism industry.

Al Sairafi says that while the government is providing legislation and determining operating practices for the tourism industry, the private sector is also being engaged to drive forward the kingdom’s tourism development. One of the major areas where the private sector is being asked to step in is with waterfront development projects. “When you look at the F&B scene in Bahrain, a lot of private investments have happened on that front to ensure that tourists coming to Bahrain for leisure or business have offerings that they can enjoy while they’re on the island,” says Al Sairafi. She also points towards the Golden Licence scheme which was announced early this year to encourage the private sector to invest more extensively in the kingdom. Companies eligible for the licence need to create more than 500 jobs or have over US$50 million in investment during the first few years of their operations. Eligible companies stand to benefit by way of prioritised land allocation, streamlined processes for licensing and obtaining government permits, and access to institutional funding for projects.

Eventually, Al Sairafi says, the KPI of the country’s tourism machinery is to increase the number of visitors and also increase those visitors’ per capita expenditure. “Initially, the KPI that was set for the number of visitors to Bahrain for 2022 was 8.3 million. The actual number that was achieved was 9.9 million, around a 20 per cent increase,” says Al Sairafi. Similarly, the KPI for the daily tourist expenditure for 2022 was set at BHD69.1, but the actual amount that was achieved was BHD76. As the kingdom attempts to move firmly away from a dependence on oil, its tourism sector shows a promising way for it to do so effectively and sustainably.