North Africa, West Asia

In Bahrain, tourism goes dry

The latest ban on serving alcohol or operating nightclubs in three star hotels in Bahrain will likely deal a hefty blow to parts of the hotel industry and will certainly ‘cramp the style’ of many a Saudi and Qatari tourist.

Hasan AlHasan
17 August 2014

BYOB, or Bring Your Own Beer, is a disclaimer one is accustomed to seeing during one’s freshman year of college, but it might increasingly become a defining feature of Bahrain’s tourism sector. The latest ban on serving alcohol or operating nightclubs slapped on three star hotels by the Ministry of Culture and Tourism will likely deal a hefty blow to parts of the hotel industry and will certainly ‘cramp the style’ of many a Saudi and Qatari tourist.

The causeway linking Bahrain to Saudi Arabia, endearingly known to many as the Johnny Walker Bridge, serves as a bidirectional umbilical cord: it permits thirsty tourists from other Gulf nations to nurse at the figurative bosom of Bahrain’s bars and clubs, while bringing much needed cash into the local economy. A marriage of convenience indeed.

In a typical week, more than 100,000 passengers drive across the causeway, roughly four to five times the equivalent of the number of people that cross the border through the airport on average. This year, during peak season (such as the period leading up to the holy month of Ramadan, during which the sale of alcohol is forbidden), 70,000 people a day crossed the bridge every day throughout the month. To put these figures into perspective, Bahrain’s total population barely exceeds one million people.

The Ministry of Culture’s stated objective behind the ban is to encourage family tourism from Saudi Arabia and other Gulf states. In the GCC, middle class families, as opposed to working class and lower-middle class bachelors, are the real cash cows. They spend a significant portion of their income on entertainment, shopping and dining out. If successful, the Ministry of Culture and Tourism’s effort could substantially transform Bahrain’s tourism sector and increase its importance to the economy, which currently stands at 4.1 percent direct contribution to GDP (2014) according to the World Travel and Tourism Council.

For once, the Ministry of Culture and Tourism has found itself in bed with local Islamist MPs over the ban – a very, very rare occurrence. In fact, the Ministry of Culture and Tourism has feuded for years with Islamists of all inclinations over a number of its events, musicals and theatrical plays, some of which have admittedly been distastefully westernised. In 2013 for instance, several MPs stirred a fuss over an announcement by the Ministry of Culture for a Halloween celebration. One MP, a career exorcist, slammed the celebration as an encouragement of sorcery and witchcraft. Another did not cease to refer to the holiday as ‘heroin’, an understandable mix up given that the two words rhyme when pronounced in Arabic. This time around though, Islamists have chosen to market the move as a first step toward an absolute ban on alcohol – a very popular demand among nationals.

However, expats who form at least 54 percent of Bahrain’s population (2010) have begun to put up a fight in the local English-language press, arguing that the ban takes away from Bahrain’s “pluralism” and “openness”. Hitherto, writing in favour of nightclubs and the sale of alcohol was considered rather taboo.

Owners of three star hotels also seemed unprepared to take it lying down. In an open letter published in the press, hotel owners criticised the Ministry’s abruptness, claiming some of them had their licenses renewed and visas granted shortly before the Ministry announced its decision. They implicitly claimed to be the victims of the Minister’s dual attempt to favour owners of the larger four and five star hotels and to score points with the Islamists. They rejected the claim that the measure was anything close to being part of an attempt to develop the industry or to crack down on the sale of alcohol.

In fact, as the hotel owners rightly seem to suggest, it isn’t really the three star hotels that are cashing in on the booze. The market for alcohol in Bahrain is effectively an oligopoly, one in which a handful of big merchant oligarchs are awarded exclusive licenses to import and distribute alcohol at several times its price. The government, for its part, levies a 125 percent duty on imports, the cost of which is almost entirely transferred on to the end consumer. Some have suggested that the current ban, which resembles a similar ban imposed on one and two star hotels in 2011, seeks to favour the fat cats that own the big four and five star properties by forcing the alcohol-sipping clientele to upgrade. Four and five star hotels will continue to be able to serve alcohol and operate nightclubs and discos unabated.

In sum, even if we were to take the Ministry’s policy at face value, its success remains highly uncertain. One can begin to poke holes in the policy’s rationale: are alcolhol and nightclubs that attract bachelors truly incompatible with promoting family tourism? The pair seem to coexist just fine in neighbouring Dubai. Some have already begun to sound the alarm on the damage that the ban could inflict on the economy as the tourism industry goes dry.

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