An Economic Analysis of the Evolution of the Tourism Sector in Bahrain

Abstract

This chapter examines the evolution and the effects of tourism on the main economic indicators in Bahrain. Results show that, overall, the tourism sector is growing even though with some periods of disruption. However, the sector seems to be operating beneath its potential as can be seen from its concentration on interregional arrivals. Results show that tourism receipts are still much below the level of some countries in the region. However, the contribution of tourism receipts to GDP remains clearly above international average levels, while its contribution to exports is slightly above the average. In addition, the industry relies primarily on expatriate labor for employment. Results also indicate that the levels of investment and government spending remain relatively low in comparison to some countries in the Gulf. Given the great potential of the country, better results could be attainable if the country shows firm commitment to develop this sector.