On November 10, the Mein Schiff 2, an ocean liner owned and operated by Germany-based TUI Cruises, docked at Bahrain’s Khalifa Bin Salman Port (KBSP), marking the opening of the new cruise tourism season. Government officials and companies in the tourism sector are hoping for a much-improved year, following the difficulties experienced through the 2011/12 season.
The arrival of the Mein Schiff 2 at KBSP represents a return to normal services, following the cancellations and low arrival numbers of the previous year, when the international cruise numbers in Bahrain were affected by the demonstrations. The Kingdom is expecting to host 70,000 cruise tourists in the 2012/13 season, with five liners scheduled to use Bahrain as one of their ports of call, local media has reported.
During the 2011/12 cruise season, which ran from November 2011 to February 2012, Bahrain saw 23 ship visits, less than half the 67 visits of the previous season, as many liners chose to bypass the Kingdom. The impact on the sector and the economy was noticeable, with each cancellation estimated to have cost Bahrain almost $275,000 in lost revenue, according to local media attributing the figure to Seatrade, a leading industry publication.
But ensuring the return of cruise ships to KBSP has also come at a cost, with the government having to offer a series of incentives to cruise operators to offset the higher insurance coverage costs stemming from a perceived threat of renewed unrest.
These incentives include reduced port fees and a 35% discount on the $8 per-passenger fee levied by APM Terminals, the port operator at KBSP. According to Bahraini officials, the discounts and incentives would more than offset the extra $15,000 or more insurance companies are planning to charge for each cruise liner visit.
Tourism has played an increasingly important role in the Bahraini economy and is projected to contribute $1.4bn to GDP in 2012, a figure the World Travel & Tourism Council (WTTC) estimates will rise by an average of 3.7% per year over the next decade. Just as importantly, the sector provides employment for just under 6% of the national workforce, accounting for almost 30,000 jobs.
A successful and undisrupted cruise season will go a long way to restore Bahrain’s place as one of the leading tourism destinations in the Gulf region, though it may take time for some operators to be convinced of a return to normal operations. Both Costa Cruise and Royal Caribbean – two of the leading cruise tour operators – have said that, for the moment, they have no plans to reintroduce Bahrain into their upcoming Gulf itineraries.
The Kingdom will be hoping to further raise its tourism credentials and woo back hesitant cruise operators after the Arab Tourism Council named Manama the Capital of Arab Tourism for 2013. The year will be broken down into quarterly themes: culture; sport; leisure; and green tourism. A program of exhibitions, fairs, festivals and forums will support each theme and are aimed at promoting Bahrain as a destination, as well as educating and entertaining visitors.
However, while the Kingdom’s tourism operators will be hoping there can be a return to stability, protests throughout November and bomb blasts early in the month may impact progress.
Although cruise tourism is a lucrative niche in the market, it is still the influx of Saudis and, to a lesser extent, visitors from other countries in the Gulf region flowing over the King Fahd Causeway that underpin Bahrain’s tourism industry. For example, during the most recent Eid Al Adha holiday, more Saudis visited Bahrain than any other country, with some 276,300 people travelling to the Kingdom.
However, there is potential for the cruise trade to develop into a more significant contributor to the economy. Nearby, Abu Dhabi hopes to attract up to 600,000 seaborne tourists per year by 2030, with plans to host 300 ship visits annually. Meanwhile, Dubai is expecting more than 100 ship visits and around 400,000 passengers in 2012, and tourism officials believe this will rise to 125 and 450,000, respectively, in 2013.
If Bahrain is able to become part of its neighbors’ plans in the coming years, it will be able to increase both its arrival numbers and revenue from their current levels. A much-improved 2012/13 season will certainly go a long way towards helping the Kingdom achieve its goals.
Oxford Business Group
5 December
