INVESTMENT AND INFRASTRUCTURE
There is an ongoing investment growth taking place in the country, which is about $10 billion of active investment within the tourism sector, and this is part of the greater $32 billion in commercial and infrastructure investment, according to the Bahrain Economic Development Board.
Bachar says: “That investment is coming from a couple of main sources — the GCC fund, the private sector fund, and later on this year we will see the opening of the One&Only Al Seef. Also scheduled to open is The Avenues — a joint venture between Al Shaya and some Bahraini developers.”
He adds: “Hotels such as the Wyndham Grand and another property that’s scheduled for Amwaj Island are family- and halal-focused. So, we see a really good variety of products that are coming in that are demand generators within themselves. They are being built to serve a particular market and not necessarily take away from other properties that are in the market. We want new developments to complement what’s already existing in the country, and do not want to replicate what’s in Dubai, Abu Dhabi, or Saudi Arabia.”
Aboobacker points out that major infrastructure projects such the expansion of King Fahd Causeway to Saudi Arabia and the expansion of Bahrain International Airport are expected to boost economic growth, investments and tourism arrivals to Bahrain, thus creating long-term opportunities for hospitality projects in the country.
He also argues that “the market is facing several challenges including slow economic growth which is forecasted to continue over the next few years”.
He says: “The hospitality market is currently under significant pressure from the strong growth in supply and the subdued growth in demand, which has created a short-term supply demand imbalance in the market.”
Hoteliers in the country believe that events and conferences are the need of the hour as this sector will help boost demand tremendously.
Le Méridien Bahrain City Centre complex director of sales Zee Bassila notes: “Bahrain requires more conferences and exhibitions in order to be able to fill the current hotel inventories in the city. Driving more events to the city with its current supply creates high occupancy and healthier ADR, fewer events in a big supply market creates price cuts and lower ADR. The oil and gas sector is a major contributor to the hotel industry and the economy. At the moment we are not securing our fair share due to the declining barrel price.”
Sofitel Bahrain Zallaq Thalassa Sea & Spa director of revenue Nicolas Vucher-Bondet shares a similar belief. “Our market strongly relies on events to gain exposure. Bahrain has begun emerging as a strong alternative destination to the Dubai and Abu Dhabi markets. We have managed to maintain strong figures on several segments, such as business groups and corporate individuals.”
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