AMMAN, 7 June 2004 — Despite the retrenchment in the global tourism industry last year, which saw a 1.2 percent decline in the total number of tourist arrivals worldwide, the Middle East region recorded a 10.3 percent increase, raising the total number of incoming tourists to 30.4 million, compared to 27.6 million in 2002. This is higher than the average annual growth of 9.5 percent that the region recorded during the period 1999-2000. Of special importance last year was the growth in intra-regional tourism which accounted for around 42 percent of total tourist arrivals. This trend is likely to continue, as increasingly more Arab tourists choose to spend their vacations in the neighboring countries of the region.
In 1995, with a 550.4 million tourists worldwide, the Middle East region accounted for only 2.5 percent of the total, or 13.8 million tourists. In 2003, the region took 4.4 percent of the global tourism industry, or 30.5 million and the total number of international tourist arrivals reached 694 million. Europe accounted for 401.5 million, Asia for 119.1 million, and the Americas for 112.4 million.
In 2003, international tourism witnessed an exceptionally difficult year in which three main factors left their negative impact on the sector: The war on Iraq, the SARS epidemic and a persistently weak world economic growth. The Middle East recorded sizable drop in the number of tourist arrivals during January-April 2003, but conditions improved considerably through the remaining part of the year. In other regions of the world, the recovery was not sufficient to save the whole year. The number of arrivals in Asia and the Pacific was down 9.3 percent in 2003, the Americas recorded a decrease of 2.1% while Europe maintained its previous year’s level.
The same factors that dampened global tourism last year, helped in a way to encourage regional tourism. More than 75 percent of international tourist arrivals last year consisted of trips within the same region. North Americans decided to travel to destinations within their continent, Europeans stayed mostly in Europe and the Japanese in the Asia-Pacific region. Dubai , Lebanon, Jordan, Syria and Egypt where the main destinations in the Arab world that benefited from this trend, attracting some 1.5 million travelers originating from the region. Egypt hosted a record 6 million tourists in 2003, up 20 percent from 2002. Dubai was ranked as the fastest growing tourist destination in the world last year, with the total number of visitors rising by 32 percent to reach 5 million. Of this total, some 2 million came from the Arab countries including one million from the other GCC states. Tourists arrivals in Syria reached 2 million, up 17 percent on 2002, while Lebanon recorded 14.2 percent increase in visitors last tear to 956,000. Jordan saw a 10 percent increase in the number of tourists visiting the Kingdom in 2003 with total reaching 1.57 million.
There are several reasons why intra-regional tourism is picking up, some are due to “push” factors, keeping people away from the traditional destinations of US and Europe where it has become more difficult for Arabs to get tourist visas specially to the US. There are also “pull” factors attracting more Arab tourists to regional destinations. These include better tourism infrastructure such as hotels, theme parks, resort projects, shopping centers, etc, and better roads and airports which make it easier for tourists to travel to neighboring countries by car or plane. There are also better promotions and package tours for the price sensitive tourists. Rather than spend a couple of hours being interrogated at US entry airports, Arab tourists prefer to journey on shorter trips to more welcoming countries in the region with whom they share a common language and culture.
Arab counties are adopting various strategies to differentiate themselves when targeting regional tourism. Dubai has become the commercial, convention and entertainment center of the region. It boasts 272 hotels with 30,000 rooms. Dubai land, a $19 billion theme park twice the size of Disney world in Florida is being built. Jordan is promoting its natural reserves, its rich historical and archeological treasuries such as Petra and the Dead Sea and its friendly environment to attract family related tourism. Lebanon is promoting its ski resorts and beach outlets, always capitalizing on its more relaxed attitudes towards fun and entertainment. Syria is known for its low prices and laid back atmosphere. Egypt is promoting its beach resorts on the “Red Sea Riviera.” Even Saudi Arabia is introducing its “Umrah-plus” which combines the minor pilgrimage to Makkah and Madinah with leisure in the Kingdom’s other main cities. Arab tourists especially those from the Gulf are recognized to be good spenders. They are not so keen on visiting historical sites, preferring instead destinations that provide fun, relaxation, shopping and family entertainment. European and American tourists coming to Egypt or Jordan are usually one time visitors interested to see such archeological marvels as the Pyramids and Petra. Arab tourists, on the other hand, are repeat customers that tend to revisit regularly if they like the place. According to the World Tourism Organization, Gulf nationals and expatriates living in the GCC countries spent last year around $30 billion on travel and accommodation expenses abroad. This corresponds to a per capita expenditure of $1,874 per trip, compared to the European per capita expenditure of $936 per trip.
The shift in patterns of Middle East tourism over the past two years in favor of Arab travelers staying within the region looks set to continue. Once visitors discover a country and enjoy their stay, the number of repeat customers will start to swell, providing a larger tourist base for that country. Those Arab countries who realize the importance of this shift stand a good chance to benefit. Dubai’s motto “if we build it tourists will come” appears to by succeeding.
Facilitating travel between the Arab countries, especially wavering visa requirements will greatly enhance intra-regional tourism. The European Union, for example, has made it possible for millions to cross-border travel, enhancing both local and overseas tourism there. The World Tourism Organization last year indicated that pan-European tourism accounted for more than 80 percent of global tourism. Marketing the Middle East in Europe and the United States as one destination could yield similar positive returns, as visitors from such long-haul destinations can make stops at different countries while on holiday in the Arab world.
Catering for Arab visitors and especially those from the Gulf require a different setup than the one catering for Western tourists. Good infrastructure (hotels, entertainment parks, shopping centers, restaurants, sports attraction, etc), a friendly and service oriented population, and above all a relaxed attitude toward fun and entertainment are the main attraction for Arab tourists.
Tourism has forward and backward linkages with other sectors of the economy and strong growth in this sector will greatly contribute toward the region’s future prosperity. The beneficiaries will not be just the travel, hotel and tourism industry, but also retail trade, restaurants, construction, transportation, communication, finance and the economy at large. Activities in this sector will open up vast opportunities for investment (both local and foreign) and generate additional export earnings of services to support the countries’ balance of payments. Tourism is a labor intensive activity and growth here will create ample employment opportunities.
(Henry T. Azzam is chief executive officer at Jordinvest.)