Country’s retail sector has been growing steadily over the past decade at an annual rate of 13%
MANAMA: Bahrain’s retail market is valued at more than BD2.2 billion ($5.8bln) per year and the sector outlook is positive for 2018 and beyond, finds a new study by KPMG.
Another key finding of the study highlighted in a report titled “Tourism: A Game Changer for the Retail Sector in Bahrain”, is that the country’s retail sector has been growing steadily over the past decade at an annual rate of 13 per cent.
During the 2007-17 period, the increasing population coupled with household income growth, as well as the inflow of tourists from Saudi Arabia, have led to the tripling of retail capacity between 2007 and 2017.
Elaborating on the findings, KPMG in Bahrain head of management consulting Kenan Nouwailati told the GDN that tourism plays a significant role in the performance of retail in Bahrain.
“At least 65pc of tourists in Bahrain arrive from Saudi Arabia, accounting for the dominant revenue share for retail businesses. Cinemas, food courts and family entertainment centres in Bahrain’s shopping malls are the main attractions for the Saudi visitors coming from the Eastern Province and Riyadh.”
According to the report, the 10 largest malls in Bahrain are located in prime areas and account for a total footfall of 51 million visitors per year and enjoy high occupancy levels ranging between 95pc and 100pc.
However, the average number of retail square metres per resident is less than half in comparison with global cities such as New York and Dubai, and is more comparable with cities like Singapore and Hong Kong.
This means the local retail market has still not reached full maturity, which indicates positive signs for growth potential.
“With increasing investment in infrastructure and malls, especially in the Northern part of the island, we expect the sector to continue to grow at the same rate in the next two to five years,” added Mr Nouwailati.
The report also highlighted how tourists’ spending patterns differ, according to the number of days they spend in the country.
On average, tourists arriving via Bahrain International Airport tend to stay four days longer than those arriving through King Fahad Causeway.
Up until 2017, the latter group accounted for more than 90pc of one-day visitors per year.
As a tourist destination, Bahrain has an average length of stay of 2.6 days compared with 4.2 days in benchmark cities, such as Dubai, New York, Paris, Hong Kong, Singapore and London.
Hence, there is a huge opportunity to increase revenues for public and private stakeholders in the retail sector, if tourism, including the number of tourists and the length of stays, are improved.
According to him, if Bahrain can attract an additional 1m tourists and increase the average stay length to 3.6 days, the country could generate BD300m of additional revenue from tourists’ expenditure on the retail sector only.
Looking forward, it reflects on six breakthrough ideas to help grow the retail market through tourism.
They are: Redefining the pillars of the tourism strategy; Enhancing the hospitality offering; Developing new events and festivals; Investing in revenue generating assets; Developing partnerships with travel agencies based in the GCC and Promoting Bahrain online.
By Staff Writer, Gulf Daily News, 06 FEBRUARY, 2018
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