April 2005 sees Bahrain host its second Formula One event, after delivering the Middle East's first premier league motor sports event last year. Tourism officials see the event as a way to promote Bahrain's many visitor attractions. But what does the country really offer, reports Karen Thomas
In the small ethnic gift shop at Bahrain International Airport, a small mountain of Bahrain Grand Prix 2005 T-shirts has materialised among the toy camels, crates of dates and nuts, blue glass amulets and shelves of pungent attar fragrances.
Grand Prix posters have transformed Bahrain Duty Free into a giant billboard. In the airport and in the city's shopping malls, striking red, white and black advertising banners flag an event that is already becoming Bahrain's most prominent sporting fixture and a leading tourism draw. For even the most casual visitor, there is no escaping the grand announcements that Bahrain is to stage its second Grand Prix motor race from 1-3 April 2005.
The Bahrain Grand Prix made its debut in April 2004, becoming the Middle East's first Formula One race. Defying the critics who predicted that Bahrain International Circuit (BIC) would not be ready in time and the racing pundits who felt that Bahrain's shifting sands spelled disaster for the racing cars' delicate engines, the Bahrain Grand Prix was declared a resounding success. "It was fabulous - a dream come true," enthuses one Bahraini spectator.
International events prompted other worries. The race took place just weeks after the Madrid train bombings, an atrocity that prompted several western governments to warn their citizens not to travel in the Middle East. Some went as far as to warn against travelling to Bahrain in particular.
Despite all the pre-race angst, however, the event itself went without a hitch. Up to 40,000 spectators a day flocked to the racetrack at Sakhir, in the deserts southwest of Manama, to watch the three-day event.
VIPs gracing the event included King Abdullah and Prince Ali of Jordan, King Juan Carlos of Spain, Britain's Prince Andrew and Sheikh Mohammed bin Rashid and Sheikh Hamid bin Zayed from Abu Dhabi. Up to 350 million motor racing fans across the world watched the Bahrain Grand Prix live on television.
Expansion
Formula One has set its sights on expansion in the developing world, beyond its traditional base in France, Belgium, Italy and the UK. Billed as one of the world's three most popular international sports, Formula One racing is worth more than $400 million a year, much of its revenue coming from sponsorship, advertising, merchandise and broadcasting rights.
Bahrain won the contract to host Formula One racing in the Middle East in 2002. It managed to build BIC in just 17 months, more than two thousand workers labouring round the clock to complete the project on time. Designed by German company Tilke, the 5.5 km circuit is particularly challenging, with 15 turns. Spring is prime sandstorm season, and part of the battle was to keep the track clear.
In the event, the circuit was ready on time, and Bahrain's Grand Prix made a thrilling debut. Ferrari's Michael Schumacher blazed to victory, beating his Brazilian rival Rubens Barrichello by 1.367 seconds. There was added drama, when McLaren driver Kimi Raikkonen's car went up in flames just off the starting blocks.
International Formula One officials voted Bahrain the best organised Grand Prix of the 2004 season, BIC beating competition from both established host countries and from its fellow 2004 newcomer, China.
More importantly for Bahrain, officials maintained that the event had achieved significant financial success. BIC claimed to have sold three-quarters of its 40,000 tickets, priced at up to $500 per head, ahead of the event - even though, on paper at least, the circuit has space for up to 70,000 spectators (the country itself has a population of just 700,000).
Bahrain invested an estimated $150 million in building BIC, and matched this amount in upgrading the country's road and airport infrastructure to host the event. This included a $150 million revamp for passenger handling at Bahrain International Airport and $21 million worth of new runways and aprons to double the terminal's capacity.
Civil Aviation Authority figures suggest that the number of people flying into Bahrain increased by 5,000 visitors a day during the three-day event. Many others drove into the country across King Fahd Causeway, linking Bahrain to Saudi Arabia's Eastern Province - it takes just 20 minutes to drive off the causeway to Sakhir.
Bahrain Chamber of Commerce and Industry reported a 50 percent increase in visitor numbers browsing Manama's sprawling souqs, while the country's five-star hotels claimed that the Grand Prix boosted occupancy levels to an astonishing 113 percent. Altogether, the event is estimated to have earned $74 million, based on an average visitor spend of $220 a day.
Although this is not sufficient to recoup Bahrain's initial $300 million-plus outlay, analysts describe the returns as "a promising start". Bahraini economists estimate that the Grand Prix boosted Bahrain's annual earnings by 4 percent, and argue that the event will deliver incalculable returns in terms of raising the kingdom's profile for tourism and investment.
Promotion
Now, the pressure is on to make the follow-up event a raging success. Apart from global Formula One fans, BIC and event sponsor Gulf Air are actively targeting Arab visitors. In January this year, BIC officials launched a month-long, pan-Arab road show, starting in Beirut, to promote this year's event.
Formula One is particularly popular in Lebanon, where the national motoring club nurtures young motor racing hopefuls and has produced an emerging home-grown star in the shape of Lebanese rally champion, Abdo Feghali. BIC officials travelled on to promote this year's Grand Prix in Kuwait, the United Arab Emirates and Saudi Arabia.
The past year has seen a programme of continued upgrades at BIC, which has started to position itself under the slogan 'Home of Middle East motor sport'. Smaller, more specialised events staged at BIC during the year have been helping Bahrain to recoup its heavy initial outlay on the circuit.
In the last year, BIC has hosted drag racing, the Mini Cooper Challenge, Formula Three racing and Bahrain's GT Festival. It has also built closer ties with some of the biggest names in the automotive industry. BMW has opened a performance centre at BIC, only its second such site, used for driver training and as the Formula BMW racing centre.
There are plans to build an off-road driving school at BIC, with 20 Land Rovers to teach by.
BIC has learned from the experience of last year's debut, and taken measures to improve access and facilities at the circuit. These include new walkways and improved shuttle bus services between the Formula One Village and the grandstand, new washrooms and supplies of drinking water in addition to improved parking arrangements.
Eight giant screens will give spectators a better view of the action on the track and there are plans for in-house broadcasting with the launch of Fan TV, with live coverage and interviews with celebrities and spectators aired on screen and on radio.
"The Formula One Village behind the main grandstand will be transformed, with grass areas, palm trees and new seating areas," BIC official says. "Most importantly, there will be new coffee shops and outdoor eating areas. The food and beverage concessions have been improved over the past year, to ensure that people get what they want to eat and drink when they want it, without having to wait."
Promoting tourism and investment
So, it hosts an annual Grand Prix - but will this alone be sufficient to boost Bahrain's tourism numbers in future?
Bahrain's economy depends heavily on services, and this dependence is expected to intensify in future, as the kingdom's oil reserves dwindle into a mere trickle. With oil reserves expected to dry up altogether by 2015, little wonder that the kingdom is looking to sectors such as financial services, distribution, transport and tourism to drive future growth.
The country's tourism performed well in 2004. Bahrain attracted an estimated five million visitors whose collective spending in the market topped $2.65 billion. Numbers of visitors arriving during the first six months of 2004 were 19 percent higher than those visiting in the first six months of 2003.
Admittedly, 2004 was an unusual year. Apart from the Grand Prix, Bahrain also hosted the Gulf Co-operation Council (GCC) states' annual summit, which was switched there at the eleventh hour from Abu Dhabi. Both events helped to raise Bahrain's profile in the Middle East and internationally.
However, Bahrain's tourism market has traditionally been dominated by weekend visitors - by the large numbers of Saudi nationals and expatriates who pour across the King Fahd Causeway on Thursday evenings in search of a relaxed and urban setting.
Bahrain has had a mixed reaction to this weekend trade. While on the one hand, Bahrain's shopping malls, souq vendors and leisure outlets earn a significant proportion of their income from these weekend visitors, the so-called 'bachelor tourists' are also a source of some tension. It has sought to target higher spending family visitors and international tourists, to reduce dependence on the short-stay market.
Officially, lively male guests arriving for short, hedonistic visits and concentrated in two- to three-star hotels, are not Bahrain's target market. However, recent years have seen Dubai increase its share of the region's weekend break market, and many in the tourism industry fear that this could represent a long-term loss.
Bahrain's hotel market is characterised by a glut of five-star hotels, and the two international events made it possible for Bahraini properties to implement rates increases of between five and 10 per cent last year, ending a period of stagnation since the events of September 11th.
The country's five-star properties operate a cartel system that fixes market room rates, penalising hotels that seek to under-cut an official rate that was approaching $160 a night this winter. Hotel managers argue that the policy is essential, upholding the interests of a market gripped by five-star glut.
Business travellers enjoying generous expense accounts are well served in Bahrain; Gulf families and international leisure visitors, less so. During the peak winter season and during high-profile local events, it proves almost impossible to book four-star accommodation on the island.
Even though the hotel market is top-heavy, however, luxury brand international chains are said to be eyeing Bahrain with interest. Business travellers continue to dominate the market. According to the local rumour mill, both JW Marriott and the Shangri-La group are scouting for land on which to build new properties.
Gulf Finance House is backing the $600 million Al Areen desert spa and resort, which due for completion this year and is based on lavish, themed accommodation that resembles the design of a Bedouin tent. Durrat Al Bahrain, a huge tourism project targeting well-heeled families, is underway in southeastern Bahrain.
Winning the right to host the Middle East Grand Prix may prove to be timely. By 2004, Bahrain's oil reserves had shrunk to just 148 million barrels. However, Bahrain is benefiting indirectly from the recent record oil prices - Saudi Arabia donates oil to Bahrain from Saudi Aramco's offshore fields at Abu Saafa for refining and re-exports - which have boosted regional government confidence and consumer spending.
High oil prices boost government spending, and moves are under way to expand Bahrain International Airport, as well as to inaugurate a new port, free zone and industrial area on the northernmost tip of Muharraq Island. When the new port, Mina Khalifa opens by the end of 2006, commercial shipping will move out of Mina Salman, the old, inner-city port.
In 2002, a resolution passed in the Hague ended a simmering dispute between Bahrain and neighbouring Qatar over ownership of the disputed Hawar islands. Qatar has waived its territorial claims and the two states, both headed by new, modern-thinking rulers, have embarked on newly friendly political and business relations.
"We see Bahrain as a potential gateway to both Saudi Arabia and to Qatar, as we will have a second causeway link to Qatar," says Ebrahim Hassan Salman, Bahrain's director-general of free zones, customs, ports and free zone affairs. "The Bahraini economy is getting stronger by the day. Although everything is subject to improvement, there is greater transparency in business in Bahrain these days."
Moving port operations out of Manama will free an area of prime real estate for new development. Some local sources predict that Mina Salman will be transformed from an ugly duckling of silos and sheds into a swanlike expanse of waterfront apartments, hotels and leisure complexes.
There is even talk of converting the old port into moorings for visiting cruise ships and yachts. Bahrain has held talks with US cruise liner companies about launching Gulf holiday itineraries, a move being spearheaded by a loose coalition of regional tourism and maritime officials, who have joined forces to promote the Arabian shoreline as a cruise destination.
Historically, cruise tourists were always older, wealthier and more conservative than the average traveller - although the demographic is shifting as the sector grows and as prices fall. Cruise liners have traditionally axed whole itineraries at the simplest whiff of local trouble, including whole Mediterranean schedules after IRA bombings in the UK in the 80s.
Despite this skittishness though, Bahrain is keen to attract medium-sized cruise liners who could include calls in Manama on week-long or ten day cruises taking in ports in the UAE, Oman and the Indian Ocean.
Meanwhile, Bahrain International Airport has launched an ambitious upgrade, preparing for increased passenger demand in the run up to the 2005 Grand Prix. "This year's Formula One race is expected to attract approximately 50,000 visitors to Bahrain for the weekend," says David Ryan, director of marketing and promotion at Bahrain's department of Civil Aviation Affairs. "Spending during that weekend is expected to reach approximately $26.5 million."
In fact, Bahrain's Grand Prix is a showcase for wider changes taking place in Bahrain. Bahrain International Airport has launched a $200 million upgrade to double its capacity within four years.
The airport is expanding its cargo hub to handle up to a million tonnes of cargo a year by 2009, with plans for a cargo oasis and parking space for up to ten freighter aircraft at a time. Bahrain sees its future role as a financial, trading and cargo gateway between east and west.
"A number of logistics and distribution companies are committed to building major facilities at Mina Khalifa to serve air, sea and trucking business," Ryan says. "Regional distribution by air will be a high priority. The new port, scheduled to open in the first quarter of 2006, will include a major free zone and investment park.
Ebrahim Hassan Salman shares Ryan's optimism. "We believe there is potential to develop a niche in sea-air transfers, as an added incentive to investors," he says.
Meanwhile, Bahrain is also upgrading its financial services infrastructure. A hub for banking, insurance and financial companies since the mid 70s, there has been a new influx of companies previously headquartered out of Saudi Arabia in the last 18 months.
Work has started on Bahrain Financial Harbour (BFH), a $1.5 billion development that will give Manama a dedicated financial district when its first phase is completed in 2007. Aiming to win Bahrain new prestige in international financial circles, its centrepiece is the Dual Towers, containing 71,000-metres-sq of office space.
Bahrain Stock Exchange will move into the new Financial Mall, which will also house brokers, trading companies and the capital markets. Additional space will be available in the nine-storey Harbour House. Foreign nationals will be able to buy property inside BFH - a first for the country - and the development is expected to create more than 6,000 jobs when it is completed in 2010.
While Dubai increasingly dominates Gulf tourism, Bahrain is taking steps to reposition itself and to differentiate its tourism offering from that of its noisier neighbour.
Bahrain is drawing on its ancient civilisation, the kingdom of Dilmun, which was immortalised in the Epic of Gilgamesh, to position itself as an Arabian destination that offers all the luxuries that today's tourists expect combined with an ancient heritage offering new insight into Arabia's history and traditions.
Despite the turbulent times that have faced Middle East tourism in recent years, Bahrain has secured the international community's trust. The Grand Prix is just a symbol for the clutch of lower-key projects that are under way in the kingdom. Bahrain is preparing to meet the challenges of a new, post-oil era of development with confidence.
A global showcase
Gulf Air is to be official carrier and leading sponsor of the 2005 Bahrain Grand Prix, reprising its role in last year's event. Gulf Air's president and chief executive James Hogan outlines why the Bahrain Grand Prix makes the perfect vehicle to deliver his airline's brand messages
"To date, the collaboration between Gulf Air and the Bahrain Grand Prix has been successful. This is demonstrated in the success of the 2004 Gulf Air Grand Prix, and the international accolades and recognition it received from the teams, drivers, race goers and media.
"Gulf Air's objective in sponsoring the Grand Prix was, in the first instance, to align itself with a high profile international event that offered brand synergies. Obviously in any new venture, learning to work in an extended team is challenging and I am sure there were minor glitches, but certainly none that compromised the success of the venture.
"In fact, the opportunities offered by the sport for exposure to a television audience of millions provided a very obvious draw card to allow us to showcase Gulf Air in the global market place. I believe this was achieved to our satisfaction.
"As the official airline, Gulf Air had the opportunity to showcase its new products and services to the many visitors to the region. Traffic peaked in the period leading up to the race with record figures at the week of the race. This was good, not only for our bottom line, but also achieved a great deal from a marketing and PR point of view.
"Now, we have the opportunity to build on the success of last year's Grand Prix. This year, the challenges are different. The infrastructure at the track is in place, the country has had more time to work on tourist facilities, and the authorities and local companies have a greater understanding of the requirements of the international market and of what it takes to attract people to the region.
"This year we need to continue educating people about the region and then, of course, to increase attendance at the event. Bahrain International Circuit (BIC) has a great team of experienced people who are already working hard to achieve this objective. I have confidence in the success of the 2005 race."
Making the most of your Grand Prix visit
With an expected 50,000 visitors scheduled to descend on a country whose population is merely 650,000, it pays to be prepared to attend this year's Grand Prix. Here are some hints and tips on how to be prepared.
Book your accommodation well in advance. Bahrain's mid-range hotels are often fully booked and five-star properties' occupancy levels are expected to soar during the Grand Prix weekend.
Agree on a price before setting off in Bahrain's notorious taxis. Few have functioning meters, and stinging nave tourists is a speciality. Alternatively, call a radio cab and agree on a formal price in advance.
Watch the weather forecasts: April in Bahrain can bring anything from balmy sunshine to torrential rain. Arm yourself accordingly with umbrellas or sunscreen.
Take half a day to tour Bahrain's huge National Museum, a treasure trove whose exhibits travel through time from the Bronze Age Dilmun civilisation to the present day, tracing the arrival of Islam, the rise and fall of pearl diving and Bahraini costumes and customs.
Go off-road and visit the Tree of Life in Bahrain's southern deserts. This ancient tree, which rises out of the arid desert scrub with no visible source of water, lies at the heart of Bahraini claims to be the original site of the Garden of Eden.
Hang with the arty crowd in fashionable Adliya, in Manama's southern suburbs. The area is teeming with cool galleries, cafs and restaurants. Riwaq Art Gallery is famous for shows featuring visiting Arab artists, while Nature's Whispers caf is a flagship for Bahraini home cooking which also houses a women's handicrafts co-operative.
Check out the deals on offer in the souq and modern air-conditioned shopping malls: many merchants and retailers are planning sales and special promotions to celebrate the Grand Prix. There will be raffles, prize draws and other special events throughout the weekend.
A beginner's guide to the Grand Prix
In terms of global sport, Formula One is ranked among the 'Big Three' - only World Cup football and the Olympic Games command larger television audiences, and these take place only once every four years. Grand Prix races take place all year round, all over the world.
Global interest in the sport has risen dramatically in the last decade. Motor racing began in the 1920s, as the world's rich bought the world's first motorcars. Both Germany and France claim to have invented the sport.
Interrupted by two world wars, interest in competitive driving re-emerged in the late 1940s and has grown steadily ever since. The first world championship took place in 1950. As the sport was taken more seriously, carmakers began to compete to produce the most competitive single-seater racing cars.
Grand Prix motor racing is governed by the International Automobile Association (FIA), which is headquartered in Switzerland. National motor racing bodies report directly to the FIA, which oversees all issues relating to Formula One competition, while the teams report to the Formula One Constructors' Association (FOCA).
Formula One has become global in the last five years. Previously, there were barely a dozen accredited Grand Prix races a year, most of which took place in established venues such as the UK, France, Italy and Belgium. Now, more than 20 are held yearly, as the sport expands into Asia in particular.
Bahrain and China hosted their first Grand Prix races in 2004. Prospective host countries include India, Turkey and South Korea. Leading Grand Prix circuits include:
A1 Ring, Spielberg - Austrian Grand Prix
Albert Park, Melbourne - Australian Grand Prix
Barcelona - Spanish Grand Prix
Circuit Gilles Villeneuve, Montreal - Canadian Grand Prix
Circuit Nevers, Magny Cours - French Grand Prix
Hockenheim - German Grand Prix
Hungaroring, Budapest - Hungarian Grand Prix
Imola - San Marino Grand Prix
Indianapolis - US Grand Prix
Interlagos, Sao Paolo - Brazilian Grand Prix
Monte Carlo - Monaco Grand Prix
Monza - Italian Grand Prix
Nurburgring - European Grand Prix
Sepang, Kuala Lumpur - Malaysian Grand Prix
Silverstone - British Grand Prix
Suzuka - Japanese Grand Prix
Formula One is dominated by British and Italian racing teams. The UK players are Lucky Strike Bar Honda, Jaguar Racing, West McLaren Mercedes and BMW Williams. Italy fields Jordan Ford and KL Minardi Ford. France is represented by Mild Seven Renault, Switzerland by Red Bull Sauber Petronas and Japan by Panasonic Toyota Racing.
Part of the sport's appeal lies in the technology it uses: top-of-the-range racing cars can accelerate from nought to 60mph in less than two seconds and from nought to 100 in less than four. Racing drivers learn to command their vehicle at speeds of more than 200mph, harnessing forces four times stronger than the pull of gravity.
Modern racing cars weigh 600kg once the driver is seated, run on a three-litre engine producing around 800 horsepower. In the background, the biggest name teams employ experts in engineering, physics and aerodynamics to refine and improve their cars' performance.
Aside from the vast sponsorship revenues, the sport puts the racing teams and brands reputations on the line. Star drivers, from the Schumacher brothers to Jenson Button, command the latest space-age technology.
© Middle East Travel 2005
