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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

mkarolak@pmu.edu.sa; karolak.magdalena@gmail.com

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.

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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).

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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.

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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

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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/

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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.

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(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

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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

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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

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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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