Evolving consumer expectations require innovative real estate strategies to drive performance in hospitality and retail.

In the wake of the Covid-19 pandemic, shopping habits and hotel preferences are evolving. Tourism figures in Bahrain have near recovered but consumer expectations have progressed. 

Tourists are looking for trendy and accessible places to stay. Affordable hotels that also provide a quality experience, particularly those with connections to shopping malls, are becoming popular accommodation choices. 

Similarly, Bahrain’s residents are looking for variety in the way they spend their free time, with shopping malls required to adapt to keep up with expectations and provide enriching experiences.

Diversification is key for mall developers and operators

Shopping habits are changing. The rise of e-commerce, as well as the sheer volume of retail options in Bahrain, mean that shopping malls in the Kingdom are required to diversify to attract footfall.

Consumers in Bahrain still do the majority of their shopping in-store, preferring to see and experience products in person before committing to buying. However, retail itself is no longer enough of a draw for many consumers; malls need to differentiate themselves to encourage people to not just visit the property, but to stay and spend time & money. 

The modern mall is a destination in and of itself, requiring entertainment and experiential offerings if it is to contend with its wide range of competitors- both brick & mortar properties and online retail.

How destination malls are positioned

The Avenues, with its souq-style streetscape and its extensive F&B offering along its waterfront promenade, is a favourite of families both living in and visiting the Kingdom. The property’s extension, due for completion in 2025, will double its Gross Lettable Area and is intended to increase its fashion retail and entertainment offering.

Bahrain’s largest mall in terms of lettable area, Majid Al Futtaim’s City Centre, has altered its tenant mix over the last five years. The property now offers a broader range of entertainment options, including escape rooms, virtual reality gaming, and bowling, in addition to the traditional cinema and family entertainment centre. Later in 2024, Time Out Market is due to open at the property, following its success in Dubai and other cities around the world - the first of its kind in Bahrain.

Marassi Galleria, new for 2024, is the region’s first beachfront mall, already giving it a differentiator in its location. Additionally, its range of entertainment and indoor/outdoor dining options, as well as allowing restaurants to be licensed, distinguishes the property from its competition.

In what is already a saturated retail landscape, properties require key selling propositions that are centred around the consumer experience to set themselves apart from their competitors.

Hotel preferences are shifting

CBRE’s data shows that consumers in Bahrain and the Eastern Province of Saudi Arabia are prioritising  affordability over luxury when planning a hotel stay, while generally guests in the wider GCC are increasingly choosing to stay at authentic experiential hotels over more standardised offerings. As a means to address this shift, hotel operators have been signing more ‘Lifestyle Hotels’ throughout the region, aiming to offer experiences grounded in the local market, yet backed by the benefits typically associated with recognised global brands.

This change in focus is in contrast to the existing hotel offering in Bahrain, which is dominated by more conventional properties. This is true across the market - from 5-star luxury resorts to the more limited business traveller-targeted properties - which is indicative of a market gap. 

However, the lifestyle positioning is not the only determinant of success, and the increasing placement of hotels within multi-faceted, mixed-use schemes has created notable out-performance for some assets. The 4-star Hilton Garden Inn in Bahrain Bay, for example, which is attached to the Avenues, has been proving particularly popular, owing in part to its design, which nods towards the lifestyle trend, but also to its integration onto a waterfront promenade, and link to a popular mall.

Developing Bahrain’s tourist offering

Diversification is not just required of the retail and hotel sectors – it is symptomatic of Bahrain as a whole, as we contend with big regional players to attract tourists. And attracting tourists is only part of the equation; tourists need reasons to stay for longer. Instead of just a Thursday and Friday night as is most common, the Kingdom needs to encourage tourists to stay for longer periods by offering them more attractions and activities.

This process has already begun: the openings of the Al Dana Amphitheatre and Exhibition World Bahrain in recent years are important steps in attracting a wider range of tourists. MICE tourism (meetings, incentives, conferences, and exhibitions), as well as tourists from outside of the GCC, are important demographics in enabling Bahrain to compete with other destinations in the region.