Tourism a game changer for retail sector: report

Manama : Bahrain’s retail sector has been growing steadily over the past decade and remains one of the most dynamic sectors in the Kingdom, with an annual growth rate of 13 per cent, according to a new study. 

The report “Tourism: A Game Changer for the Retail Sector in Bahrain” by KPMG also attributes 65pc of this growth to tourists arriving from Saudi Arabia. 

“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,” said Kenan Nouwailati, Head of Management Consulting at KPMG in Bahrain. 

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, the report reveals. 

According to the report, the ten largest malls in the Kingdom account for a total footfall of 51 million visitors per year and enjoy high occupancy levels ranging between 95pc and 100pc. 

The report, however, highlights that the average number of retail square meters per resident is less than half in comparison to global cities such as New York and Dubai, and is more comparable with cities like Singapore and Hong Kong. 

“With the 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 2 to 5 years,” Nouwailati added. 

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, 4 days longer than the tourists arriving through the King Fahad Causeway. Up until 2017, the latter group accounts for more than 90pc of 1-day visitors per year. As a tourist destination, Bahrain has an average length of stay of 2.6 days compared to 4.2 days in benchmark cities, such as Dubai, New York, Paris, Hong Kong, Singapore and London. 

“If Bahrain attracts an additional 1 million tourists and increases the average stay length to 3.6 days, the country could generate BHD 300 million of additional revenue from tourists’ expenditure on the retail sector only,” Nouwailati said.