www.bahrainthismonth.com In the past couple of years, as investors reassessed their property portfolios, an almost continuous stream of hospitality inventory, mainly in the four-star and serviced residence markets, has been added to the Kingdom. Some new hotels started life on the drawing board as high-end residential properties. VKL Tourism has recently opened the Royal Phoenicia Hotel in Umm Al Hassam and the cranes are busy at work on the Banadar Rotana Hotel in Manama. What’s really starting to exercise the minds of hoteliers is the imminent addition of new fivestar properties, such as the Wyndham and Four Seasons. The prospect of a significant increase in the number of rooms in this segment, in a market where average occupancy rates are put at 50 per cent, has led to an inevitable question. Who is going to stay in these properties? Without a major jump in arrivals, on business or leisure, some industry insiders see occupancy rates sliding towards the 35 per cent mark. While an over-supply of rooms is not in itself a reason for investors not to commit to a market, a lack of visibility as to how that any excess inventory will be absorbed has the capacity to act as a deal breaker. A two-pronged pin An old Chinese proverb talks about being wary of a pin with two pointed ends. For years people have called for the formation of a tourism board to take responsibility for the marketing of the Kingdom, leaving Tourism Affairs to focus on regulatory matters. Sh Khalid, quite rightly, has sought to alter the perception of his ministry, away from being the policeman for the industry. Instead he speaks about raising quality and introducing appropriate standards for those operating with hospitality licences. Regulation and compliance The advantages of strong regulation can be seen in the financial services sector. Almost without exception, bankers within Bahrain, such as Navneet Kampani at Citibank, laud the role of the Central Bank of Bahrain (CBB) for the robust approach its takes with regard to regulation. The CBB creates an environment where financial services companies can operate with confidence. Much of the thrust of this regulation has been to place responsibility for compliance with the regulatory framework on the banks themselves. The result is an abundance of self-regulation. Banks understand, for instance, that it is their responsibility to know the reason why money flows through the bank account over which they are custodians. Quantitative easing If there is one technical term from the financial services industry that has entered the vernacular in recent years it is quantitative easing (QE). It’s an unconventional approach, within a controlled environment, to loosen the purse strings and is aimed at boosting economic activity and, thus, growth. The hospitality industry could do with its own dose of QE; the BDF report is packed full of ideas as to how this might be implemented. “There are a wide range of initiatives that could be introduced, in the short-term, to boost the industry,” says Puneet. “Many of these can be seen in other markets around the world.” Two such measures stand out as candidates for consideration; both relate to an easing of visa regulations. The first is to leverage the assets, and work, of others. The BDF recommends offering visas on arrival for anyone, from any country, who has a current, valid visa in their passport from the USA, the United Kingdom or Europe (a Schengen visa). These countries go to great lengths to check the background of those seeking visas to enter their territories. Why reinvent the wheel, particularly given the small size of the Kingdom and limited local resources to conduct such checks? A second proposal, and perhaps a little more controversial, is to award visas for MICE (Meetings, Incentives, Conferences and Exhibitions) events on a group basis. In effect, just like bankers and the funds they manage, the responsibility would be placed on MICE organisers to know who is attending their event and to be held accountable for attendees. If you organise, for instance, a pharmaceutical conference in the Middle East, it is almost certain that there would be delegates from the likes of Iran, Lebanon and Syria. All it needs is for one person to have a visa rejected for the whole event to be shifted to another location. The team at the Bahrain Exhibition & Conference Authority estimates that a mediumsized exhibition, occupying 12,000 square metres, is capable of generating BD600,000 in revenues, primarily in the hospitality sector. One of these exhibitions held every month of the year would yield close to US$20 million for the Kingdom. The Kingdom should not just be the ‘Home of Motorsports’ in the Middle East, it is also the ‘Home of Arabian Hospitality’. The Kingdom’s welcoming warmth is a unique asset of the Land of Two Seas; it is a competitive advantage for the tourism sector. Jamil Wafa, now retired, has been a key figure in the Kingdom’s tourism industry over much of the last three decades. Bahrain This Month (BTM) asked him what he believed had worked well over the years. BTM: Tell us about the Council for Tourism? Jamil: In 1986 I convinced the late Tareq Almoayyed, then Minister of Information, to establish a Council for Tourism, included all interested parties in the hospitality industry and relevant government agencies. The idea was to ensure coordinated and collective actions were taken in a prompt manner and without delay; this council was quite active. BTM: What developed from this initiative? Jamil: By way of example, on November 13, 1989, the first Tourism Seminar was held in Bahrain to which I invited officials from Dubai and Oman. I explained how we had promoted tourism when we combined Lebanon, Syria and Jordan into a tour package. The idea appealed to all participants and this idea proved successful in the GCC as well. BTM: How do you believe the Ministry of Tourism should be positioned? Jamil: A Ministry of Tourism should be completely independent, reporting to the cabinet, with its own budget, and should have sole responsibility for the efficient promotion of tourism. The Ministry of Culture, for instance, has full responsibility for culture and heritage, and is doing a marvellous job promoting Bahrain in a very exemplary way. BTM: What do you see as a way forward? Jamil: Everyone seems to be playing their own music and the sound is very harsh and not very successful. There should be a real effort to collectively coordinate the promotion of Bahrain and its tourism attractions. Without such coordination, I am afraid the country will be left behind and the deterioration of the tourism industry will continue. I will be glad to meet anyone to express my views. A Tourism Dialogue June 2014 61 Jamil Wafa
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