Besides the retail investments mostly slated to open by 2020, Bachar points out that there’s “huge potential for further investment” along the kingdom’s 14 km coastline which was recently revealed as a strategic government investment project.
BTEA has also launched tourism campaigns like the ‘Ours. Yours. Bahrain’ to intentionally increase the international awareness of the island kingdom. Besides key source markets, the campaign objective is designed to target tourism, foreign direct investment, media, influencers and even Bahrainis, according to the campaign website.
Vasseur also brings attention to the ‘Bahrain Representative Offices’ set to open in countries around the world such as UK, Germany, France, India, Russia and China as well as the GCC in an effort to attract more tourists. He highlights that India is turning out to be an emerging market for destination weddings.
Looking forward
By 2020, Bachar expects 15 new four- and five-star hotels and resorts to open which will add up to 3,400 rooms and will join existing hotels such as Four Seasons, Ritz-Carlton, Sofitel, Art Rotana, Marriott, Le Méridien and Westin.
With various marketing, hotel openings and investment strategies in place to boost the tourism industry, Bahrain’s hospitality sector still has quite a few challenges to hurdle across in 2018. And that, Hewett points out, is the potential problem of oversupply.
“One of the big challenges for hoteliers in 2017 was how to respond to increasing supply. A number of large hotels opened during the year and quickly adopted aggressive pricing strategies in order to carve out market share. This posed a challenge for the existing hotels to either follow the new entrants or to maintain their own revenue strategy. This will continue to be a key challenge in 2018 as the supply will increase further, strengthening the competitive market,” Hewett explains.
Colliers International predicts that Bahrain’s occupancy rates will remain the same as 2017 but the ADS is forecasted to decline by 4% in 2018 compared to the performance in 2017.
Vasseur says that one of the challenges he anticipates Frasers Suites Seef Bahrain facing is the strong competition in the region but believes the market will be “stable” for the serviced apartments in the coming year. He adds: “The flexible operating structure of a serviced apartment concept allows for a versatile business model to fit demand trends. When a market demand is strong, developments can focus on short-term transient demand, which allows for high average rates. Conversely if the market is weak, developments can target long stay demand, which allows for high occupancy levels.”
Vasseur also believes that when it comes to hotel guests, the interest seems to be shifting from five-star hotels to lifestyle hotels where the guests can be more in “control of their own experiences.”
Elallam, on the other hand, is realistic about the fact that the market will also present challenges, but he shares a positive outlook regarding The Ritz-Carlton brand, which he hopes will carry it forward in the coming years.
Looking to the future of the hospitality sector, Vasseur alludes to the fact that with leisure travel being the “new target of the future”, Bahrain’s development as a resort island will help it wean off from its reliance on oil revenues and help diversify its growth strategy.
Hewett says that despite challenges lined up ahead, Bahrain’s long-term outlook remains positive: “With the recent announcement of large oil and gas reserves, coupled with Bahrain’s strengthening financial sector, the markets corporate sector is set to expand, increasing the overall demand levels in the country.”
“Bahrain has the potential to deliver a unique tourism offering within the GCC, drawing on the strengths of its cosmopolitan capital city, natural islands, rich and accessible history with two UNESCO World Heritage Sites and authentic, open culture. With a strategic focus on building on these unique strengths, there is huge potential for future growth which is creating investment opportunities across the sector from real estate to leisure, including attractions, retail, dining and cruise ships,” Bachar concludes.
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