The Consequences of Holidays on Small Businesses: Case of the Arabian Gulf

Abstract

The question this study seeks to answer is "What is the impact of public holidays on profitability of SMEs in Bahrain?” In an attempt to better understand the impact of holidays on small businesses in Bahrain, two exploratory research studies were conducted among various selected business sectors of SMEs in Bahrain. For both studies the participants of the questionnaires were selected to best reflect the business owners of various SMEs in Bahrain. In the first study, there were 100 participants, of which 94% were Bahraini; the majority of participants come from the business service sectors. The major finding of the first study indicated the majority of business owners believe Bahrain has a high number of official holidays (65%) and believe that holidays impact their business performance. The finding highlights that the highest impact comes from religious holidays (80%), since majority of residents travel for religious reasons. The majority of the sales owners believe that their sales volume decreases during holidays. In summary, the finding of the first study encouraged us to conduct another field research study, aimed to ascertain the impact of public holidays on the profitability of SMEs in Bahrain. Another questionnaire was distributed to in which 130 SME business owners participated. Here the majority of the respondents (67%) own micro businesses, followed by 20% small business owners. A majority of the respondents believe that Bahrain has too many public holidays (70%). The most preferred to travel abroad, surprisingly, a majority picked religious and national holidays. The most affected business sectors are healthcare and especially private clinics, manufacturing, services such as computer services, and consultancy services. On the other hand, there are businesses that benefit from holidays, such as those involved in entertainment, restaurants and cinemas. The statistical analysis of hypothesis testing indicated that public holidays have an impact on the profitability of SMEs in Bahrain. In conclusion, both studies have shown, through statistical analysis, that holidays have an impact on SMEs. Businesses and business managers are encouraged to develop strategies to avoid the negative impact.