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M. Karolak - Full Paper - Exeter
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1
Tourism in Bahrain: a continuous search for economic development and for
preservation of cultural heritage
Magdalena Karolak, Ph.D.
Assistant Professor
Prince Mohammad Bin Fahd University
Kingdom of Saudi Arabia
[email protected]; [email protected]
Abstract. The aim of this paper is to assess the efforts undertaken to
promote development and transformation of tourism sector in the Kingdom
of Bahrain. Thanks to a Western lifestyle, Bahrain, the smallest country of
the Gulf Cooperation Council, has long established its reputation as a
getaway destination from its conservative neighbor - Saudi Arabia.
Nonetheless, in 2009 a parliamentary debate over the negative influence of
"unclean" tourism promoting un-Islamic values opened after Manama was
marked as one of the top ten "cities of vice" worldwide on an Internet portal.
The solution aimed at curbing down the phenomenon of prostitution and
promoting family tourism called for closing of nightclubs in hotels and a
complete alcohol ban. Ultimately, economic needs prevailed and the solution
was slowly abandoned as unpractical.
The problem of transformation of tourism is part of a larger debate over how
to tackle the loss of cultural identity in rapidly modernized states as well as
how to politically direct the development of tourism bearing in mind the
needs for economic development. Yet, heritage tourism could become a
factor strengthening the local identity. The revamping of Manama souk as
well as the project to include Muharraq's houses of pearling traders on
UNESCO World Heritage list are examples of governmentally supported
initiatives that could put Bahrain in international spotlight.
This paper presents an analysis of this continuous search for a balanced
economic development and for preservation of national heritage.
2
1. Introduction: Tourism strategy in the Arabian Gulf
Bahrains economy, similarly to the economies of other Gulf Cooperation Council
(GCC) members, relies heavily on oil and oil-related revenues1. Thanks to the flow of
oil income, rentier states have been able to establish extensive welfare programs
providing their citizens with free healthcare, free education, as well as subsidies on
daily commodities without taxing their population. The discovery of oil has indeed
transformed GCC societies. On the other hand, oil dependence has created social and
economic problems of its own. Oil revenues have furthered rapid economic
development with creation of modern industries and establishment of a vast range of
services exacerbating the demand for labor. GCC societies hardly had enough labor to
warrant the need for growth. Foreigners filled various occupations, from manual labor
to highly-qualified professional jobs. The foreign population grew steadily and, in
case of some GCC members, outnumbered citizens. Furthermore, during the capitalist
era of the 1970s, oil wealth promoted consumerism and a lifestyle geared towards
acquiring imported goods (Robbins, 1994). This era however widened the gap
between rich and poor, and made more obvious the wealth of those who could afford
residence-type homes, cars and shopping at Western franchises (Moghadam, 2003).
Although oil brought prosperity in the 1970s, in the 1980s the GCC economies
suffered from falling oil prices, as well as the growing financial strain due to the Iraqi
invasion of Kuwait and rising expenditures on arms, security and defense (Luciani &
Beblawi, 1987). Subsequently high demographic growth, rising unemployment, and
inflation combined with a growing consciousness of the decline in oil supplies
brought further strain on the GCC economies.
The beginning of 21st century marked a crucial turn since governments of the
GCC countries made a commitment to sustainable development independent from oil
resources and to competitiveness as requirements for future growth of the GCC region
overall. In the past, economic reforms undertook by the GCC had usually limited
results. They lacked a comprehensive approach that would combine transformation of
"private sector participation, labor markets, financial markets and human resources"
to yield significant results (Shochat, 2008, p. 6). They also lacked political will (Sick,
1 Petroleum production and refining account for more than 60% of Bahrain's exports, 70% of government revenues and 11% of Bahrain's GDP (2011).
3
1997, p. 12). Contrary to past undertakings, the packages of through economic
reforms adopted in the 2000's by the GCC governments, branded usually as
"Visions"2, offer a holistic approach. Non-business tourism, industry and financial
services are new directions of growth for the region (BEDB, p. 8).
The path of economic diversification through development of tourism has
proven successful in the UAE, especially in Dubai. Statistics indicate that in 2010
tourism accounted for 16.6% of UAE GDP (2010) and 31% of Dubai GDP alone
(2011). As a result, UAE have become a global leader in the higher-end leisure
market (WTTC, 2011, p.19). UAE are ranked 30th among 139 countries covered by
the 'Travel & Tourism Competitiveness Report 2011', issued by the World Economic
Forum. The progress in development of tourism is noteworthy as UAE came "ahead
of many of the ancient tourism destinations, despite the moderate natural resources of
tourism sector." (Emirates News Agency, 2011). Over the years 2010-2020, tourism
contribution is expected to have a steady share of 8.1% growth in GDP contribution
(Baumgarten & Kent, 2010, p. 3). Given that using international leisure tourism as a
vehicle for economic development proved to be successful in UAE; other countries in
the region, with the exception of Saudi Arabia that focuses on religious tourism,
embarked on similar ventures. Nonetheless, the plans for development of tourism
have to be carefully crafted to fit the needs of tourists and the economy, which poses
also several challenges (Sharpley, 2002). GCC countries share similar climate and
similar natural resources, hence attracting tourists may require some degree of
specialization to offer unique services and activities.
Tourism was recognized as an important factor for future economic growth of
post-rentier GCC economies. This paper focuses on the strategy for tourism market
development adopted by the Kingdom of Bahrain. Indeed, Bahrain presents a
distinctive case among other GCC countries. Despite its small territory, Bahrain has
been serving since the construction of King Fahd Causeway in 1986 as a getaway for
visitors flocking from strict Saudi Arab shores. Catering, to begin with, to Gulf Arab
visitors in search of a socially relaxed lifestyle, Bahrain extended its tourist appeal
through the establishment of Formula 1 races in 2004. Yet, due to F1 competition
from its neighbors, Bahrain may need to focus on rediscovery or re-creation of its
cultural heritage as additional sources of international tourist income. This paper
2 See Bahrain 2030 Vision, Saudi Arabia Vision 2020, The Abu Dhabi Economic Vision 2030, Vision 2020 Qatar etc.
4
provides an assessment of successes and challenges to the tourism development
undertakings in the Kingdom of Bahrain. The importance of this paper is twofold. To
begin with, it fills a gap in literature on the subject of Bahrain and it also illustrates
dilemmas of development faced by the Arabian Gulf region. Secondly, it
demonstrates that despite the fact that initially the region was "not normally
associated with leisure/holiday tourism market" (Sharpley, 2002, p. 221), GCC
countries can successfully establish an international tourist base.
2. Bahrain: ancient heritage and modern lifestyle
Although two decades ago, for most countries in the Middle East international leisure
tourism has been "either culturally undesirable or economically unnecessary"
(Sharpley, 2002, p. 221), Bahrain developed its tourism market early alongside UAE.
Indeed, UAE "emerged as the forerunner in efforts to build tourism and market its
attractions" already in the early 1990's (EIU, 1993). Bahrain became the second most
popular leisure tourism destination in the GCC after UAE3 and, according to
projections, this trend will continue in the future (Table 1 below).
Figure 1 Number of international arrivals to Bahrain.
Source: BEDB, 2009
Table 1 Prognosis for tourist development in GCC
3 KSA, although coming first in the ranking, owes it to religious tourism
5
Source: Alpen Capital, 2011, p. 4
This second place in the GCC is a remarkable score given Bahrain's small area
of roughly 700 km2. Thanks to a combination of a liberal lifestyle and a wide range of
services, Bahrain has been attracting visitors from neighboring countries in search of
entertainment as well as business visitors. Among non-GCC arrivals, 16% of visitors
came for leisure, while the other 84% for business and journalism (BEDB, 2009).
Bahrain offers both, extensive business and leisure facilities. Since the 1980's Bahrain
has positioned itself as a banking hub for the Gulf region. To mark the growing
importance of the financial sector, the construction of the Bahrain Financial Harbor
begun in 2004. This project of 380.000 m2 offers commercial office space, freehold
apartments, retail, dining and leisure areas. On the other hand, the adjacent Bahrain
Bay, is a multipurpose landmark development in Bahrain. With a planned total floor
area of 1.45 million m2, it will include commercial, residential, hotel, entertainment,
retail and educational facilities. In addition, Bahrain boasts an exhibition centre of
almost 16.000 m2. Bahrain's tourist facilities are equally noteworthy. The country
offers 5,630 hotel rooms of different standards of quality (Alpen Capital, 2011, p. 44);
an increase by over 60% since 2005. This number is projected to grow further by 65%
in the future. Room occupancy rates throughout the year 2009 stood at 60% on the
yearly average and 56% in 2010. Even though popular unrest and cancellation of F1
race made the occupancy rates drop to as low as 5%-10%, they rose to 42.5 %4 in
April 2012. In recent years hotels were established in new areas of the south of the
country with opening of Zalaq Sofitel and Banyan Tree. Besides hotels, Bahrain
promotes development of island cities. Durrat Al Bahrain and Amwaj Islands
combine hotels, shopping facilities and apartments for sale and rent. On the other
4 As reported by HotelierMiddleEast.com http://bahrain.dxbwebsite.com/bahrain-hotel-rates-rocket-in-tourism-revival/
6
hand, family-friendly activities include shopping malls, cinemas and four amusements
parks. These amenities appeal to Arab visitors who often travel with their families
(Hazbun, 2003). A wide choice of restaurants is also available. The central area of the
district of Adliya was recently revamped and turned into pedestrian zone dedicated to
upper class restaurants. Bahrain's facilities include also a growing number of spas and
beauty parlors for women and men. Bahrain's liberal policies allowing the sale of
alcohol, encouraged opening of bars and night clubs. Some restaurants have also a
license to sell alcohol. Bahrain's attractions are a magnet for Gulf Arab from
neighboring countries for whom Bahrain is an easily reachable by car weekend
destination. King Fahd Causeway is the preferred way of getting to Bahrain and
receives the highest number of arrivals to the country.
Figure 2 Arrivals to Bahrain by Port of Entry
Source: BEDB, 2009
Statistics below illustrate the growing numbers of traffic at the only land border
crossing into Bahrain.
Figure 3 Growth of passengers figures on King Fahd Causeway
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Source: King Fahd Causeway Authority, 2012
Given the facilities offered by Bahrain and its accessibility overland, it comes as no
surprise that the majority of visitors to Bahrain are Gulf Arabs.
Figure 4 GCC visitors as percentage of all arrivals to Bahrain
Source: BEDB, 2009
Nonetheless, the flow of Gulf Arabs was at one point of time denounced by the
parliament as a mixed blessing. As Manama was listed as "one of the top 10 cities to
pursue vice and debauchery in a men's portal, MPs debated the moral degeneracy
brought about by a cross-border tourism in Bahrain. Bahraini parliamentarians
recognized the risk of corrupting Muslim values, especially among the youth. In the
beginning of year 2009 MPs proposed a number of laws aimed at preservation of
Muslim identity, namely putting an end to sale of alcohol and pork. Bars, restaurants,
nightclubs and many hotels sell alcoholic beverages legally. Saudi visitors who come
to Bahrain, among others, to enjoy the prohibited items supposedly were the source of
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another detrimental phenomenon. A number of hotels operated nightclubs as cover for
open prostitution business causing disturbance in the affected districts inhabited by
Arab families (Al Aali, 2009). First proposed legislation asked to ban alcohol in
Bahrain International Airport and on flights of the kingdoms national airline Gulf Air
(January-February 2009). Further demands insisted on a complete ban of alcohol in
public places (April 2009). Under the new law, hotel guests could enjoy alcoholic
beverages in their rooms and individuals within boundaries of their homes.
Parliamentarians were criticized in the media and by the public opinion for ignorance,
restraining freedom and possibly causing damage to Bahrains economy. In order to
satisfy the economic and the cultural needs, the Culture and Information Ministry
banned ultimately only one-star and two-star hotels from distributing alcohol and
ordered them to stop all live entertainment. However some establishments manage to
re-open bars in form of a separate business already in July 2009.
All in all, the parliamentary involvement into tourism is an indication of a
growing dilemma of the path of tourist development Bahrain should take. MPs
proposed a plan to turn Bahrain into a family destination offering other attractions
than just a more liberal approach to alcohol and a vivid nightlife. While, the
eradication of "vice" was unsuccessful due to economic interests vested in the
business; Bahraini authorities decided to promote Bahrain as a luxury, 4- and 5-star
hotel destination for families, which would naturally reduce the number of unwanted
visitors. Low budget hotels were blamed for bringing a bad reputation to Bahrain as
their sole source of income was believed to be alcohol and prostitution (BNA, 2007).
This policy allowed for an increase in numbers of luxury hotels, in 2011 five star
hotels accounted for around 27% of the rooms in the market whereas four star hotels
accounted for 35% of the market (Alpen Capital, 2011, p. 44). Secondly, a greater
variety of attractions was sought, thanks to which Bahrain could attract visitors also
from outside of the Arabian Gulf. The overview of the development of new initiatives
is presented below.
3. Evolution of tourism industry strategies: niche tourism
In the Arabian Gulf, Bahrain is not the only country looking for a sound strategy to
attract a steady flow of international leisure tourists in the coming years. The search
for a right balance and a variety of activities is essential to keep up with the
competition of Bahrain's neighbors. As a matter of fact, due to this stark competition,
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the GCC countries may need to specialize in unique types of activities to outdo their
neighbors. The case of Bahrain provides an illustration of this need. Having an early
start in tourist industry, along the UAE, Bahrain has attempted to keep up with the
demands of the tourist market and broaden the array of activities to please different
tastes. Yet, similar initiatives have been attempted by its neighbors. Ultimately,
Bahrain may need to emphasize the appeal of its historical heritage and promote it
more effectively on the international scale.
3.1. Sport events
Bahrain has been the pioneer of Formula 1 racing in the Arabian Gulf and in the
Middle East. Since 2004 Sakhir race course has hosted, among other motor sport
events, the renowned Formula 1 Grand Prix races. The event put Bahrain in
international spotlight and has generated a large revenue. It has been noted that F1
contributed US$600 million or 2.9 percent of GDP to Bahrains economy in 2008
(OSullivan et al., 2011, p. 20) Formula 1 has been branded as the Gulf Air Grand
Prix promoting the national airline of Bahrain. The popularity of the race has a
positive effect on the hotel occupancy during the event, which often reaches 100% of
hotel rooms offered. Moreover, studies suggest that F1 fans "spend twice as much as
regular tourists and stay three nights longer on average than their counterparts." (Gulf
Business, 2010, p. 40). In 2010, when the Grand Prix in Bahrain was the season-
opener of F1 races, the race weekend attracted over 100,000 visitors (Reuters, 2012).
Statistics estimate that additionally 350 million people follow the race on TV, which
provides Bahrain with an opportunity to market its touristic appeal abroad and beyond
its traditional Arabian Gulf tourist market (The Report, 2010, p. 180). Nonetheless,
Bahrain's monopoly on Formula 1 races in the Middle East was broken in 2005 when
Turkey opened a race course in Istanbul. Moreover, Abu Dhabi became the closest
competitor of Bahrain. Its Abu Dhabi Formula One Grand Prix was first held in 2009.
The commitment to attracting car enthusiasts of all ages to UAE was also highlighted
by the opening of a family-friendly Ferrari World theme park in Abu Dhabi. The
competition is all the more threatening as due to the unrest, Bahrain's 2011 GP was
cancelled.
Besides motor sports, Bahrain has organized yearly Bahrain Boat Show
International since 2009 and Bahrain International Air Show since 2010. These events
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have mostly a regional importance. Yet, they also face competition from neighboring
countries that focus on similar initiatives.
3.2. Culture
Apart from hosting sporting events, Bahrain has been actively promoting itself as a
cultural venue in the Arabian Gulf. The Cultural Spring Festival has been hosted on a
yearly basis since 2006 and the Bahrain Summer Festival since 2008. Both events
gather Arab and international artists. The focus is on music, theatre, poetry, art
exhibitions and dance as well as academic lectures. The festivals include
performances addressed to adult as well as to young audiences and feature also free of
charge events. Throughout the years, the Cultural Spring Festival has attracted
prominent performers such as Fairuz, Julio Iglesias, Andrea Bocelli, Diana Krall and
others. Bahrain has also upheld a long-standing tradition of its Bahrain International
Music Festival, which run for the twentieth time in 2011. Due to the growing attention
given to arts and cultural industry, Bahraini authorities begun the construction of the
first national theater in 2011. The venue will accommodate theatre and opera
performances as well as symphonic concerts. The importance of Bahrain's
commitment to culture was stressed when Manama was nominated Arab Capital of
Culture 2012. This UNESCO initiative will run in Bahrain throughout the whole year.
It will feature events dedicated to arts, architecture, design, poetry, literature,
translation, music, environment, theatre and homeland. Each month of the year is
dedicated to a different type of activities.
Promoting cultural industry is one of the economic development goals of the
GCC countries.5 It comes as no surprise that recent years have witnessed increased
investments in culture in the region. These developments are massive and may make
it difficult for Bahrain to compete with its neighbors. UAE's calendar includes on
average at least ten different festivals every year. While Muscat boasts already a
Royal Opera House and Qatar has Qatar Opera House, Dubai announced its plans to
open an opera house near Burj Khalifa, the tallest building in the world. The region
also experiences investments in museums. A total of five museums are being built in
just one development of Saadiyat Island in Abu Dhabi. They include branches of
world class art collections of the Guggenheim and the Louvre museums. Apart from
5 Excluding KSA
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UAE that aspire to become "the worlds art and cultural hub" (Njeri, 2009) this
ambition is equally shared by Qatar. Qatar's royal family has been heavily investing in
contemporary art through Qatar Museum Authority. Qatar's new museums: Museum
of Islamic Art, Arab Museum of Modern Art and National Museum of Qatar
(development in progress) as well as contemporary art galleries in the Souk Waqif
are not only exhibition spaces but also feature unique architectural design. With
competition from its neighbors, backed by heavy oil money investments, Bahrain has
only limited resources to invest in art. Thus, it may be more and more difficult for
Bahrain to keep the pace in the cultural development race in the Gulf region and to
maintain its aspirations as a cultural hub.
3.3. Historical heritage and (re-)creation of cultural heritage
Bahrain has a very rich history. It has been a crossroad of trading routes between
Asia, Europe and Africa since ancient times. Dilmun, an advanced civilization,
thrived here already 3000 BC and played a role of a trading link between Indus Valley
civilizations and Mesopotamia. Throughout centuries foreign powers fought over the
control of this area. Assyrians, Babylonians, Persians, Arabs, Portuguese and British
occupied the islands in order to secure their domination in the Gulf. Given the early
development of civilization in the area, historic sites from different periods abound in
Bahrain. The first UNESCO World Heritage site is Qal'at al Bahrain (Bahrain Fort),
the site of the capital of Dilmun, subsequently populated and built on by the coming
civilizations. Other ancient sites include Babar village temple complex, burial sites in
Saar, burial mounds sites in A'ali and Hamad Town and Diraz temple. The oldest
mosque of Bahrain dating back to year 629 is a fine example of early Islamic
architecture. Apart from Bahrain Fort, two defense forts, Arad fort and Riffa fort,
were built respectively in 15th and 17th century. National museum of Bahrain displays
historical artifacts excavated from different locations. The longstanding pearling
tradition in the Arabian Gulf is displayed in the pearl traders' houses of Muharraq
island, which were recently recognized by UNESCO as the second World Heritage
site in Bahrain.
Although in the past, historic heritage came sometimes under pressure from
urban development, nowadays it has been recognized as a potential source of tourist
revenue. Middle Eastern culture and heritage can single out the Arabian Gulf region
from other international destinations for its unique characteristics. Indeed, "the
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regions challenge now is to drive the next wave of innovation that emphasizes,
celebrates and promotes Middle Eastern cultures, heritage and tradition" (Global
Futures and Foresight, 2007, p. 3). Greater interest in promotion of cultural heritage
came into spotlight with development of cruise holidays sector in the Arabian Gulf.
Dubai already showed interest in promoting cruise tourism in 2001, when it opened
Dubai Cruise Ship Terminal. Local cruise lines have operated in the Gulf; however
the breakthrough came with the commitment from international cruise lines in 2006.
Tourist arrivals aboard international cruise lines transformed cruise statics. In 2003,
cruise passenger arrivals were estimated at 10,000 people. In 2011, the number of
passengers increased to 375,000 and is estimated to reach 575,000 in 2015 (Dubai
Cruise Ship Terminal, 2012). As the international cruise lines promote the region as a
cruise destination, Bahrain was included as one of the port of calls in the Gulf. The
results were encouraging.
Table 2 Bahrain cruise ship statistics
Source: BEDB, 2009.
International cruise lines are an additional asset for Bahrain. The clientele is mostly
Western and so far Bahrain has been unable to market itself as a tourist destination
among this target group.
Anticipated greater tourist presence encouraged the makeover of Manama's
central commercial district. It is home to the traditional souk gated by Bab Al
Bahrain, a remnant of the British colonial past. In spite of its central location, the old
Manama was gradually populated by migrant laborers, mostly from the Indian
subcontinent. In the process, it has been observed that Bahrainis move out of the area
and rent out their old houses that have never been maintained as laborers
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accommodation (Al Aali, 2009b). Although it is not a deliberate intention of
foreigners, whole districts of the city turn that way into dilapidated neighborhoods
inhabited by manual workers. A revamp project was thus necessary to make the area
more attractive. An old commercial complex in the centre of the souk was demolished
and replaced by a more spacious one. Bahrain Souk incorporates a pedestrian zone.
The complex, housing shops, was designed to create a traditional ambiance. Souks in
other Arabian Gulf cities have been also revamped in a style reminiscent of traditional
elements. Such constructions reminiscent of historical heritage "create an illusion of
something which no longer exists but should exist"6 or rather, in this context,
something that has never existed but should exist for the purpose of tourism
development. Besides the souk complex, Bab Al Bahrain monument and the square in
front of it were also restored.
Despite efforts to promote heritage tourism, due to the unrest of 2011 cruise
lines skipped Bahrain from their port of call list and opted to include other
destinations in the Arabian Gulf.
4. Challenges
Despite attempts to revitalize tourism growth in Bahrain, there are several challenges
that may arise in the future. As Bahrain is trying to market itself as a luxury
destination and diversify the pool of tourists it attracts, it is necessary to conduct a
thorough branding analysis in order to assess the impact of initiatives undertaken in
recent years. Through successful branding, defined as "the conscious attempt of
governments to shape a specifically designed place identity and promote it to
identified markets" (Kavaratzis & Ashworth, 2010, p. 1), destinations become easily
recognizable in the world. In addition, in the context of ever-growing competition,
place marketing creates "uniqueness in order to improve the competitive position of
the place marketed" (Kavaratzis & Ashworth, 2010, p. 2). Consequently, destinations
are able to attract tourism and foreign investments. Balakrishnan (2008, p. 84)
proposed a checklist to assess destination marketing strategy. It is composed of 6P's:
(1) purpose of the destination brand design and promise;
(2) people that will be affected, influencers and target of branding;
(3) performance expected after a realistic audit;
6 This quote of Claude Lvi-Strauss from Tristes Tropiques is originally used in a different context.
14
(4) products offered under the destination portfolio and their management;
(5) positioning expected and ways to reinforce it and finally; and
(6) process of ensuring the brand promises are delivered as effectively and
efficiently as possible.
The analysis below is based, although not exhaustively, on Balakrishnan's checklist. It
focuses on major challenges posed to Bahrain's branding strategy.
Table 3 SWOT analysis of tourism development in Bahrain
Strengths Weaknesses
Central location between Europe, Asia and Africa
Good regional and international communications
Attractive winter-sun weather
Good general infrastructure
A very liberal destination in the region
High quality hotels
Conference and exhibition facilities
Established F1 race centre in the region
Historical heritage sights
More economical compared to other countries in the region7
Low level of awareness about Bahrain as a tourist destination outside of the Gulf
Negative image due to Arab Spring
No national tourism organization (Tourism Development Board on hold)
Limited supply of attractions (compared to UAE)
Limited funding ability to sponsor tourist projects/ attractions compared with other countries
Limited shopping facilities compared with other countries in the region
Poor supply and access to beaches and coastline
Limited direct cheap flights to/from Bahrain
Low GDP and employment contribution of tourism
Attracting and retaining high skilled staff
Opportunities Threats
Exploit cultural heritage in the future
Projected increase in tourist arrivals over the coming years
Develop products to complement other options offered in the region
Establish national organization framework for tourism
Engage all stakeholders in tourism development
Target customers from outside of the Gulf
Continuous popular unrest; negative image abroad
Tourism development in neighboring countries
Recognition of UAE as the hub of tourism in the region
Lack of unique features to attract tourists
Day trippers continue to account for the majority of visitors, inhibiting the growth of tourist receipts
Delays in projects in the construction industry due to unrest, which may delay completion of tourist developments
Lack of a holistic strategy for tourism development
Further decline of Bahrain's national airline
Adapted from: Sharpley, 2002; Allen Consulting Group, 2009, p. 257.
7 As reported by BEDB on http://www.bahrainedb.com/costs-and-taxes.aspx
15
Bahrain's location, its liberal social climate as well as reasonable prices have already
become a magnet for Gulf visitors. Nonetheless, tourism currently contributes
between 12% and 15% of the countrys GDP and the objective of Bahraini authorities
is to increase its contribution to at least 30% in the next ten years. Attracting
additional pool of international tourists is possible as warm weather, good tourist
infrastructure and local attractions provide a solid base. Yet, growing competition
from neighboring countries presents Bahrain with several challenges to retain and
increase its share of tourist market in the future.
The challenges Bahrain faces in the process of re-branding itself as full-
fledged luxury tourist destination are linked to a number of factors. They can be
classified into four main categories.
(1) Competition from neighboring states.
Very dynamic developments of new tourist facilities in neighboring countries
combined with promotion campaigns abroad can overshadow Bahrain's appeal in the
future. Creation of new entertainment parks, museums, branded hotels as well as
organization of sporting championships can direct the flow of tourists to other parts of
the Gulf omitting Bahrain on the side. UAE have been already able to capture
Western tourist market. Oman is next in line attracting tourists from Western Europe.
In the future, even Gulf Arabs may prefer UAE as a weekend destination. UAE is
well served by budget airlines in the Gulf region (Air Arabia, FlyDubai). If airfares
continue to decrease, UAE may compete further with Bahrain's accessibility overland.
Dubai has also developed a liberal approach to tourism with alcohol, and a dynamic
clubbing scene; prostitution, although illegal, is widely reported. Family-oriented
Arab tourists may also prefer UAE as a destination in the future as it offers more
attractions to choose from. Competition is all the more difficult as Bahrain has limited
funding to support large projects, unlike other oil-rich GCC members, and usually
depends on private investors. Economic downturn or political instability can easily
turn investors down and lead to delays or cancellations of projects.8 In this context, it
may be difficult for Bahrain to attract tourists, especially for periods of time longer
8 See an example reported by the press http://www.gulf-daily-news.com/NewsDetails.aspx?storyid=240205
16
than just a weekend. As illustrated below, numbers of tourist arrivals do not reflect
money spent abroad.
Table 4 Tourism receipts by country
Source: Alpen Capital, 2011, p. 14.
Further decline of national airline Gulf Air can also lower the numbers of tourists
incoming to Bahrain. National airlines in the region, such as Etihad and Emirates in
the UAE and Oman Air in Oman are a vehicle for tourism promotion of their
countries in the regions they serve.
(2) Product management: lack/underdevelopment of natural resources.
Bahrain is an archipelago, yet most of its coastline is built up. Access to public
beaches is very limited. Only some upscale hotels have an access to a beach.
Nonetheless, there is no beach strip or beach promenade to enjoy lengthy walks. This
drawback is especially visible when compared with UAE and Oman. A new project of
Diyar Al Muharraq, which is currently in construction, boasts 40 km of beaches; yet
they would be accessible only to residents of this land reclaimed development.
Furthermore, Bahrain lacks natural attractions offered in other countries in the region.
Bahrain's desert cannot serve for dunes safaris organized in the UAE. Many coral
reefs around Bahrain have been damaged in the process of land reclamation (O'Shea,
2007), which is unlike the mostly intact reefs of Fujairah and Oman. Snorkeling and
diving options exist but require venturing far in the sea. Searching for pearl oyster in
Bahrains waters may offer some alternative.
(3) Lack of tourism development master plan and single authority to oversee tourism
development.
In 2005 Bahrain Economic Development Board, a governmental body responsible for
holistic plan for economic development Vision 2030, recognized the necessity of
17
establishing the Tourism Development Board and development of the countrys
comprehensive tourism strategy and master plan. So far, such governmental body has
not been created and there have been no announcements of the comprehensive
strategy. A governmental body dedicated to tourism would have the ability to plan,
coordinate and monitor projects as well as manage its own budget, which are all
essential for an effective tourism development strategy. When this key factor is
missing, several problems may arise. In recent years, promotion of cultural heritage of
Bahrain in the UNESCO World Heritage list suffered many delays. Proposed sites are
still on a tentative schedule subject to approval. The difficulty comes, among others,
from lack of funding and conflicting interests of different stakeholders. Consequently,
Bahrain may not be able to develop a product that would make its tourism market
unique in the Arabian Gulf, hence attract tourists.
(4) Negative image due to political problems.
As the Arab Spring swept in the Middle East, Bahrain experienced a popular
upheaval. The organizers of the Bahraini "Day of Rage" scheduled on February 14,
2011 held a strong belief that a "domino effect" would spread in the Middle East and
eventually bring political reform to Bahrain. Toppling the monarchy became
ultimately a goal of the uprising and the situation became tense. Violence ensued
during the crackdown of security forces and GCC military troops were deployed.
Subsequently, a state of emergency was declared. Political instability led to the
cancellation F1 race in 2011 and brought a halt to cruise holidays. A 25-30% drop in
overall numbers of tourist arrivals was reported in 2011. Even though the upheaval
was contained, revival of tourism in 2012 still faces some obstacles. The opposition
called for F1 race boycott in 2012 claiming that the government was the main
beneficent of the profits.
5. Conclusion
GCC countries that aim at economic diversification have recognized tourism as an
important factor for future economic growth. Consequently, Bahrain faces a starker
competition from neighboring states that aim at promoting themselves on the world
tourist destination map. Direct competition with other GCC countries in terms of
niche tourism products may be difficult due to limited funds Bahrain is able to
commit to large projects. Moreover, political instability in 2011 had a negative impact
on tourism in Bahrain. The planned transition of Bahrain from a budget, local
18
weekend destination to an international luxury destination may not be easy in the
short run. Despite the challenges that persist, Bahrain has the potential to transform
itself and increase the flow of tourists. A holistic tourism strategy backed by funding
is needed to achieve it.
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