Thomas White Global Investing
The Middle-East & Africa
The Middle-East & Africa Stamp
May 18, 2012
A Postcard from the Middle-East & Africa
The Middle-East & Africa: MENA tourism blooming again after Arab Spring

Tourists taking a boat ride on the Nile

Tourists enjoying a night boat ride on the Nile in Cairo. Despite periodic violence and unrest, the tourism sector in Egypt as well as the entire MENA region appears to be recovering.

Although the Arab Spring led to the blooming of hope and freedom in the Middle East & North Africa (MENA) region, it heralded a bleak winter for the tourism industry there. But just as the swallows return once the thaw begins, tourists appear to be slowly flocking back.

Despite periodic violence and unrest, hotel occupancy rates across MENA saw a heartening jump of 14.6% between April 2011 and March 2012, according to figures from STR Global, which tracks the global hotel industry. Specifically, STR reports that occupancy rates climbed 91% in Egypt, and 55% in Jordan, which was badly affected by the violence in neighboring Syria. Substantiating these figures, government data indicate 2.5 million tourists visited Egypt in the first quarter of 2012 — a rise of 32% from the same period last year.

Not surprisingly, this data has brought cheer to the MENA region as its international tourist arrivals had dropped 8.8% last year while the rest of the world recorded 4% growth. All through 2011, Moroccan souks (popular al fresco bazaars) yearned for their wide-eyed customers, the pyramids stood tall and still with not many to admire their beauty, and the ancient city of Thebes in Egypt seemed even more abandoned while the Nile flowed on, silently. For MENA economies, already reeling under high unemployment, wobbly governments, and sporadic violence, the drop in tourism was akin to a nomad wandering in the desert, unable to find any oasis.

Truth be told, MENA countries need their tourists because tourism has been a key driver of economic growth in the region over the past decade. Before the uprising, the sector accounted for nearly a tenth of Egypt’s GDP. What’s more, one in eight Egyptians works in the tourism sector. For Morocco, tourism is the second-biggest employer and in Tunisia, the sector accounts for nearly 8% of the economy. So, encouraged by early signs of a turnaround, the region’s tourism officials are putting the pedal to the metal in their marketing efforts.

Egypt is trying to woo tourists from the BRIC countries in order to meet its target of $25 billion in tourism revenues by 2017. For instance, the country’s tourism minister, Mounir Fakhry Abd El Nour, aggressively marketed his ancient land at the recently organized Arabian Travel Market Exhibition in the UAE. The conference was in effect a brainstorming session focused on improving the region’s image, advertising, and media campaigns to accomplish the bigger goal of attracting investors and luring back tourists. In fact, on the sidelines of the conference, Egypt and the UAE joined hands to come up with strategies to co-promote their tourist destinations in various countries, including China and Australia.

In a bid to make up for the lack of tourists from its bread and butter Euro-zone markets, Morocco is looking to Eastern Europe and the Middle-East. The country is doggedly promoting itself in Poland, The Czech Republic, Slovakia, and Russia, where purchasing power has grown and an increasing number of citizens can now afford to take luxury holidays. Morocco’s tourism minister, Lahcen Haddad, has told Reuters that the country’s tourism development would get a boost if the national carrier Royal Air Maroc succeeds in its endeavor to strike a deal with a major Gulf airline. Royal Air Maroc has already increased flights to the Middle East in the hope that convenience will overrule any hesitancy in the minds of travelers from the neighborhood.

Adding to this air of optimism, global market research company Euromonitor International has predicted a 5% compounded annual rate of growth in tourist arrivals for Egypt between 2011 and 2016, and about 5.5% for the entire region. Though Morocco’s growth is expected to be much slower at 2.3%, Moroccans can take heart that foreign visitors to their country tend to be relatively big spenders.

Nevertheless, the trends and expectations notwithstanding, these are early days and the MENA tourism sector may need several quarters of sustained positive momentum to see a significant recovery. Still, if there is anything the Arab Spring proved about the region last year, it is that just about anything is possible.

Image Credit: Vasenka on Flickr under a Creative Commons License

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