On the Gulf Air flight from Bahrain to Dubai, Dennis K Nelsen, vice-president of sales and marketing at MPR Services, an oil company based in Texas, sips Arabian coffee and settles into his business class seat to read a book. A regular visitor to Bahrain from the US, Nelsen is in talks to form a joint venture with a large Bahraini firm. Taking his eyes off his book, he speaks fondly about the friendly locals, Bahrain’s growing economic muscle and the eclectic shopping experience he enjoys in the souks. “Being a history buff,” he says, “I love Bahrain – and there’s a lot of history in the making too.”
Bahrain, an island kingdom (formerly an emirate, now ruled by the Al Khalifa family) located between Saudi Arabia’s East coast and the Qatari peninsula, has indeed lately been making some historic moves. In May, Bahrain’s capital city Manama saw the opening – to a dazzling blitzkrieg of multimedia laser lights and fireworks – of the first phase of the US$1.5 billion Bahrain Financial Harbour (BFH), spread across 380,000 sqm of prime seafront property and hailed as the region’s first fully integrated financial district. The waterside development with the Harbour Towers – the tallest twin structures in Bahrain – at its centre has not only changed the profile of Manama’s otherwise placid skyline, but has also made a point about its economic growth, reiterating Bahrain’s stance as the financial hub of the Middle East. In BFH’s second phase its residential component, the US$450 million Villamar, will open and redefine waterside living in Bahrain.
Bahrain, one of the smallest countries in the Persian Gulf, is historically significant for being one of the first to benefit from oil wealth. One of the oldest banking centres in the Middle East, it has more than 350 financial institutions today. It is also one of the few countries in the Gulf to have expanded to non-oil sectors and boast a diversified economy; and with a Free Trade Agreement with the US, Bahrain is open to foreign commerce. All this has rejuvenated the real estate market and there are now a plethora of commercial and tourism projects in the pipeline.
To begin with, Bahrain is pitching itself as a boutique-style destination offering a high-value product with all the indigenous elements: welcoming people, local history and natural resources. Fawzi Tolefat, Acting Assistant Undersecretary for Tourism Affairs, says there are at least 15 new hotels coming up adhering to this philosophy. “Bahrain is a great place for boutique hotels that can blend the old with the new,” he says. “We are developing a tourism oasis.”
According to a recent Global Investment House report, land prices have gone up almost four-fold in Bahrain. Areas like Al Seef, where most modern developments such as malls and resorts are centred, have witnessed the highest price appreciation. This is also helped by the fact that Bahrain has Saudi nationals buying property – thanks to the King Fahd Causeway, which links Bahrain with Saudi Arabia. The forthcoming causeway between Qatar and Bahrain (currently under construction) may also increase Qatari investment and bring more tourism.
Bahrain may not exactly be bursting at the seams with mega construction projects like Dubai, but there is a sense of excitement. Also coming up near Bahrain’s newly fashionable harbour is the Bahrain World Trade Centre, a commercial development boasting an environmentally responsible design. Supporting the two tapering 50-storey towers (inspired by Arabian wind towers) are three giant turbines to harness the power of wind and generate energy. When it is finished at the end of this year, it will create history as one of the world’s most unique landmarks.
It will also feature Moda Mall, a boutique shopping centre, and will be linked to the Sheraton Bahrain Hotel near its premises in downtown Manama. The hotel’s deputy general manager, Mamdouh El Gohary, sees it as an impetus to refit the hotel. “We’re extending the lobby and will renovate three more floors next summer,” he says.
Primarily a business property, the lobby of the Sheraton has always been buzzing on weekdays. But now the weekend traffic is also picking up, at least partly thanks to the Bahrain International Circuit (BIC), which hosts the Formula One World Championship every year. Since it opened for business in 2004, the circuit has contributed to Bahrain’s economy and helped put it on the map. The BIC, about 30 minutes by road from Manama in the desert, features the most exotic racing machines in the world. The Bahrain Grand Prix, the country’s number one social occasion, attracted more than 90,000 people in April this year. Steven Umfreville, commercial director of the BIC, says: “The circuit has become an icon for Bahrain.”
The BIC is now building corporate lounges, and a Hummer Academy is scheduled for construction in June, which will bring more high-profile visitors. The BIC also doubles as an exhibition centre for business meetings and launches. Also on offer are corporate driving days for executives to experience off-road action.
Five minutes down the road from the BIC is the massive US$1 billion Al Areen development. Currently under construction here is a water park – in the open desert – themed hotels and malls. The 206-room, five-star Al Waha Resort near the water park will incorporate executive serviced apartments.
At the moment, though, the only property in the Al Areen area that’s up and running is the Banyan Tree Desert Spa & Resort. Sami Ayari, its general manager, says Bahrain is a small luxury destination offering a genuine Gulf experience. “You will notice all the new developments here are high-end,” says Ayari. “Unlike Dubai, this is a real city; the people open their homes and hearts to you.” The resort is introducing corporate retreat packages.
Most hoteliers and visitors agree that Bahrain also needs more four-star rooms and good mid-range hotels. Thankfully, several projects are in the pipeline to meet this demand. Due to open in 2009 are a 240-room Holiday Inn in Al Seef and a Sofitel property, the Zallaq Beach Resort, while the 190-unit Bahrain Marriott Executive Apartments is expected to come on line shortly.
A 200-room Kempinski Hotel is also coming up in the Bahrain City Centre development, and will feature a Turkish Hammam. Inspired by Dubai’s Mall of the Emirates, the 150,000 sqm project will include 350 shops and 54 restaurants, and is due to open as a complete leisure and resort destination next year.
Existing hotels like the five-star Ritz-Carlton Bahrain Hotel & Spa are very popular with both business and leisure travellers. “The year 2006 was a record one for hotels in Bahrain,” says Pascal Duchauffour, the hotel’s general manager. “We’ve been able to re-energise the international market and there is a positive vibe about Bahrain now.”
In 2005, the Ritz-Carlton closed for five months to redo its club floors. The hotel’s club lounge now features five food presentations daily and records one of the highest occupancies in the Middle East. The Crowne Plaza Bahrain also opened newly refurbished club suites for its corporate guests last year with upgraded business facilities.
“Bahrain is a small place so the selling mechanism for a hotel is based on relationships,” says Michael Barnes, director of sales and marketing at the Diplomat Radisson SAS Hotel, Residence & Spa. The hotel opened residences in January this year with 121 apartments and will open the spa with 17 treatment rooms by mid July. “Bahrain’s downside is that it does not have enough leisure facilities yet,” notes Barnes, “which is why customers in Europe may choose Doha, Muscat or Dubai over Bahrain. There is a need for beaches and watersports activities. The tourist should be able to identify Bahrain as an island just like the Seychelles or Mauritius.”
Bahrain is not without its share of offshore projects though, among them Bahrain Bay, Durrat Al Bahrain and Amwaj Islands. The Amwaj Islands off the coast near Muharraq include a mall, marina, beachfront resorts and hotel apartments. A 323-room Renaissance Bahrain Amwaj Islands Hotel is expected to open in 2008.
The US$4.5 billion Durrat Al Bahrain is a 20 sq km seaside city resort located on the south coast of Bahrain, which will eventually include 11 islands with villas, apartments, hotels, restaurants, spas, and marina. There willl be six atoll islands, five petal islands, a crescent and a stand-alone hotel island housing three five-star and three four-star hotels. When completed, by the end of 2010, Durrat is expected to accommodate over 60,000 residents.
“Part of Bahrain’s allure is that it offers more competitive property prices than Dubai or Doha,” says Yaser Al-Hammadi, marketing assistant manager of Durrat. “We have buyers from South Africa, Europe and other Arab countries.” Durrat Al Bahrain will also boast an Ernie Els-designed 18-hole golf course.
So far, the Riffa Golf Club has occupied pride of place in Bahrain as the city’s first 18-hole grass golf course. Closed in June for renovation, it is being redesigned by golfing legend Colin Montgomerie. When it reopens in April next year, the course will form the centerpiece of Riffa Views, a residential community of more than 900 luxury homes. The clubhouse will feature more restaurants, a boutique and corporate facilities, and adjoining it will be a new country club.
As in the rest of the Gulf, Bahrain International Airport is undergoing a three-phase expansion to handle 15 million passengers annually. The duty free will include more retail outlets and business lounges. Besides its own national airline Gulf Air, Bahrain has a charter operator, Bexair, which operates a fleet of 10 aircraft for executive air travel and has a VIP terminal at the airport offering business facilities like secretarial services, free wireless internet and meeting rooms.
Clearly, Bahrain is forging ahead. And for history buffs like the US-based Nelsen, Bahrain’s future is likely to be as inspiring as its past.
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