Competitive Advantages of Nations Case of Bahrain Tourism Sector



There have been many discussions about national competitiveness with most researchers and economists using the concept to explain why companies in some countries continue to be more productive than their competitors in other countries. The concept of national competitiveness can be defined as the ability of the economy of a nation to grow (Porter, 1990). It is important to define the term “competitiveness” before understanding the term national competitiveness. The term competitiveness can be defined as the ability to grow. Therefore, national competitiveness is the ability of a nation to grow regarding productivity and economy. National competitiveness can be measured by the institutions, factors, and policies that determine the productivity level of a country (Porter, 1990). Every country should strive to improve its quality of life by creating an environment that supports and promotes economic growth. The diamond model explains the main determinants of a country’s competitive advantage. The paper herein looks at the tourism sector in the Kingdom of Bahrain concerning the four attributes of competitive advantage in the diamond model.

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Explanation of the Diamond Competitive Advantage Model

The diamond model of competitive advantage argues that the competitiveness of a nation lies on four main attributes which include the factor conditions, demand conditions, related and supporting industries, firm strategy, structure and rivalry (Porter, 1990). The factor conditions refer to the position of the nation regarding the factors of production such as skilled labour and the infrastructure required to compete in a given sector. The demand condition refers to the home-market demand for the products of that particular industry (Porter, 1990). The related and the supporting industries, in this case, refers to the availability of other industries such as the supply industry, information industry and the manufacturing industries that support the sector under consideration. Firm strategy, structure and rivalry attribute covers, the conditions in the nation that govern how companies are formed, organised and managed and the nature of domestic competition or rivalry. 

Application of the Diamond Model to the Bahrain Tourism Industry

According to Aldebert, Dang and Longhi (2011), the term tourism has no single meaning which is universally accepted as its definition goes beyond the traditional definition of travel for pleasure. Tourism has evolved over the years leading to the coming of other types of tourism activities such as educational, medical, business tourism among other things (Connell, 2006). The overall economic impact of tourism is what makes it an important sector in every nation. Tourism is an important sector of the economy as several sectors of the economy are involved in the production and delivering of goods and services as a result of tourism. Some of the important sectors in as far as tourism are concerned to include transportation, accommodation and the hotel industries (Connell, 2006). 

Just like other countries, tourism is considered as an important part of the Bahrain economy. Bahrain has one the oldest and biggest airlines in the world, the Gulf Air which has been acting as the main link between Bahrain and other regions across the world. Bahrain’s geography and open culture make the country a landing point for many external visitors from different parts of the world. Tourists visiting the country can be grouped under international visitors, regional visitors, hospital and schools and domestic tourists (Bahrain Economic Development Board, 2017). The tourism industry in the country has been growing over the years, though at a slow pace compared to the rate of other countries in the region.

Current State of Tourism Industry in Bahrain

Factor Conditions

Bahrain is the centre of trade for all the countries in the Gulf region making it a perfect place for tourist destinations. The country also has an impressive story that traces back from the time of the movement of Trade caravans through it in their voyages from the Gulf of the Mediterranean Sea (Mansoor and Jalal, 2010). The Kingdom of Bahrain also has a long commercial story which can be seen in the economically open culture in its citizens in the recent years. The economically open culture of the Kingdom of Bahrain is an important boost to the growth of the tourism industry in the country as it allows free trade (Mansoor and Jalal, 2010). Therefore, tourists visit the country in the form of traders, investors and others inform of buyers. The free and open economic policy in which the country operates also acts as a significant factor in the growth of the tourism industry as it encourages many investors to invest in the tourism sector (Mansoor and Jalal, 2010). The 2011 issue of the Index of Economic Freedom listed Bahrain as the freest economy in the Middle East the North African region (Kreishan, 2015). 

The country has also invested in various sectors such education to support its labour industry with skilled personnel. The country’s labour market has been growing over the years due to the number of graduates entering the job market and also its open policies that allow skilled workers from foreign countries (Kreishan, 2015). The tourism industry has hugely benefitted from the growth of the labour industry as more skilled personnel are joining the hospitality industry to support its sustainable growth (Al-Alawi, 2005). 

Bahrain has one of the most modern infrastructures in the Middle East region with various projects still going on to supplement the existing infrastructure (Mansoor and Jalal, 2010). Bahrain government has also been spending heavily on tourism infrastructures such as roads, leisure projects, and the accommodation facilities. The Gulf air offers significant support to the entire tourism industry since it started its operations in 1950 (Tourism, 2007). The airline has soon grown to be the major international carrier serving at least twenty-two countries and thirty-seven cities on three continents. The airline has modern planes that do not only make travelling comfortable but enjoyable for its clients who are mainly tourists from the region and out of the region (Tourism, 2007. The airline operates daily double flights making movements easy between ten regional cities from its main headquarters the Bahrain International Airport. Apart from the transport and labour market sectors, the Bahrain kingdom also enacted policies to preserve its main tourist attraction sites and points. 

Demand Conditions 

The demand conditions, in this case, refer to the nature of the tourism market in Bahrain. The demand conditions look at the rate of demand for specific tourism products (Abou, 2014). The demand for tourism products in Bahrain is relatively high as compared to other countries in the region. For example, Bahrain enjoys a long and diversified historical culture that makes a major tourist centre in the region. The 2013 Travel and Tourism Competitiveness Report put Bahrain as the third country among all the Arab states and fifty-fifth globally regarding demand for tourism products (Abou, 2014). For many residents across the Arab states and internationally, Bahrain remains a unique tourist destination regarding offering a variety of products and events and on availability and easy access to accommodation facilities. Bahrain Kingdom’s tourism industry is still expected to continue growing in the coming years regarding the willingness of regional tourists to continue visiting for short and long periods due to the improved product offering. The domestic tourism is also strong as the locals visit various places within the country to attend events, for leisure as well as to conduct business. 

Related and the Supporting Industries 

The success of the tourism industry relies on the supporting industries such as infrastructure, accommodation and hotels, sports and culture, and transport and communication industries. Bahrain has a legacy as a centre of connective infrastructure for travel and trades both for international and regional purposes. The transport sector holds a crucial role in the tourism sector in Bahrain as it provides a modern and easier way of movement within and outside the country (Aziz, 2001). The causeways linking Bahrain and several countries in the region also acts as major players in boosting the tourism industry. The country is currently working on other projects to improve its transport infrastructure. The country also boasts of a modern hospitality sector with world-class five-star hotels beaches. Many investors have entered the hospitality business which has significantly increased the number of hotels and leisure areas in the country. Bahrain has several historical and cultural attraction sites that make it a perfect tourist destination. For example, the Qal’at al-Bahrain and Arad Fort among others have been conserved as important attraction sites. 

Firm Strategy, Structure and Rivalry

Bahrain operates in a free and open market economy that supports investments and free trade. The Kingdom of Bahrain supports the creation of business through less strict trade regulations as a way of promoting the growth of its economy (Hussain and Mallin, 2002). The free market economy gives the business owners the discretion to determine how resources are located, how goods are produced and who buys the goods without any interference from the trade authorities. The free market economy has also helped in the elimination of bureaucracies and strengthened the will of the consumers. The latter has seen a vast range of investments in the tourism and hospitality industry hence helping the industry to grow further. 

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How to Improve the Tourism Industry in Bahrain

Despite the tourism industry performing fairly well in the past years, the government of Bahrain should consider various ways to improve the tourism sector in the country. First, the country should focus on innovation as one way of improving its tourism sector. The government also has a role to play in improving the tourism sector. Therefore, the paper herein recommends the various ways in which tourism industry can be improved through innovation and participation of the government and the people of Bahrain. 

Role of Innovation in Improving the Tourism Industry

The tourism sector in the global economy has gone way to another level due to competition between countries to attract more tourists than others. Innovation is one of the main ways in which Bahrain can improve its tourism sector (Hjalager, 2010). The current consumers of tourism products are not like the traditional consumers, and they have different preferences. The current consumers are technology-oriented and also like quality services coupled with convenience and efficiency. Therefore, the Bahrain tourism industry should focus on innovation in service delivery, customer experience and product creation. Innovation is crucial in the development of tourism products which are crucial in driving sales in the industry (Hjalager, 2010). For instance, the hotel and accommodation sector should invest in digital technology to improve their efficiency in managing customers and offering quality services. The use of new digital marketing platforms should also be incorporated into the tourism industry to help market Bahrain’s potential in as far as tourism is concerned (Weiermair, 2004). Hotels, airports and other facilities should also adopt the use of mobile applications for bookings, flight management and communication with the customers. The industry should incorporate travel management application such as UBER and hotel online booking services to improve the experience of clients as well as to market the country’s tourism potential. 

Role of the Government in Improving Tourism Industry

The role of the government ranges from creating an ample environment for the operation of every stakeholder in the tourism industry to the regulation of the tourism sector. First, the government has a role to ensure that all the tourists are secure during their stay in Bahrain and free from any threats or discriminatory treatments. The government needs to beef up security at its entry points such as the airports and seaports as a way of building the confidence of tourists about the security situation in Bahrain. The government should also consider investing in communication and transport infrastructure to make movement within Bahrain easy and cheap to boost the level domestic tourism. 

Government-owned tourism sites should be well managed and have their fee subsidised for the locals to boost domestic tourism. The government should also partner with hotel owners to support the upgrading of the four-star hotels to five-star hotels so that more tourists can be wooed to visit Bahrain (Bahrain Economic Development Board, 2017). Improving the service quality in both the three-star and the four-star hotels is likely to boost the tourism industry in Bahrain by providing quality and affordable accommodation. The government of Bahrain should also focus on the establishment of schools which offers hospitality courses to improve the labour sector in the hotel industry (Bahrain Economic Development Board, 2017). Establishment of schools which provide such short causes will ensure that the country has professional drivers and tour guides to give the visitors a better experience. 

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Nation competitiveness refers to the ability of a country’s economy to grow. The diamond competitive advantage model defines the key attributes that determine the competitiveness of a nation. The four primary characteristics include the factor conditions, demand conditions, related industries and the firms’ strategy, structure and rivalry. Bahrain’s tourism industry is currently at a better place with the four attributes working in favour of the sector. However, Bahrain needs to invest more in innovative activities and other administrative areas to help propel the tourism industry in Bahrain.

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