The World Tourism Organization recently reported that tourist operations worldwide increased by 4.4 percent in 2011 and forecasts around one billion tourists will be traveling in all continents in 2012. While last year was one of the best on record for global tourism, the tourist industry in the Arab world has lost billions of dollars since the Arab Spring began in Tunisia last year.
The optimistic global forecast may help tourist industries in the Middle East and North Africa to recover from some of the catastrophic economic consequences of successive revolutions. But first perceptions of continuing instability and risk must improve. And while tourists avoid previously popular destinations in North Africa, other regional destinations, particularly in the Gulf, are benefitting.
Egypt’s tourism sector has previously demonstrated its resilience following earlier crises.Before the uprisings, tourism was the leading industry in the services sector of several national economies. In 2010 tourism contributed significantly to GDP in countries like Tunisia (6.5 percent), Egypt (8 percent), Morocco (10 percent), Palestine (12 percent in 2007), Lebanon (9.6 percent), Jordan (12.4 percent), Syria (12 percent) and United Arab Emirates (16.6 percent). In Egypt and Tunisia, tourism accounted for 11 percent and 15 percent of total employment respectively, according to a World Bank report on the Middle East and North Africa published in May 2011.
Overall, however, 2011 was a disastrous year for tourism in several Arab countries. Since the Arab Spring began, the number of tourist visitors to the MENA region has declined dramatically, by about 12 percent and 8 percent in North African and the Middle East respectively.
The decrease in tourist numbers is a major setback for economies struggling to cope with a precipitous drop in consumption accompanied by high unemployment brought on by the political turmoil.
In Egypt, unemployment has risen to 11.8 percent from 8.9 percent in the third quarter of 2011. Over 337,000 workers have lost their job, according to the Egyptian state agency for Public Mobilization and Statistics in that period. Rashad Abdou, an economics professor at Cairo University, says the biggest job losses have been in the tourism industry, where “workers have either lost their jobs or had to accept a halving of their salaries.”
The collapse of tourism has been disastrous for countries like Egypt, Tunisia and Morocco, but for Gulf states like Saudi Arabia, United Arab Emirates, Oman, Kuwait, and Qatar, tourism has maintained steady growth. Analysts argue Gulf Arab states are benefiting from perceptions of peace and stability compared with their regional neighbors.
Samir Hamadeh, director of sales and marketing at Alpha Tours Dubai told a local newspaper: “Being one of the safest destinations in the world, Dubai is always the first option for tourists to divert to and seek as an alternative.” The 2011 Travel & Tourism Competitiveness Report forecasts average growth of the sector’s contribution to the GDP in United Arab Emirates will be more than 8.1 percent annually from 2011 to 2020.
Unsurprisingly, Tunisians and Egyptians, especially those who rely on tourists for their income, want to restore their status as first-choice destination for sun-seekers vacationing abroad. Tunisia’s Minister of Tourism, Elyes Fakhfakh, recently signed a cooperation agreement with the UNWTO to host the International Conference on Mediterranean Tourism in April on the holiday island of Djerba. Egyptian representative of the Ministry of Tourism in Fitur, Hisham Zaazou, argued recently that despite the terrible year endured by Egypt’s tourism sector, there are signs that the situation is improving since “Exports rose by 18 percent in 2011 and the rate of growth is expected to be 3 percent in the fiscal year 2011 to 2012.”
There is historical reason to be confident too. Egypt’s tourism sector has previously demonstrated its resilience following earlier crises, such as the 2005 terrorist attack in the Egyptian resort town of Sharm Al-Sheikh or two separate bus accidents in 2010 in which 16 tourists were killed and 43 injured.
What is true for Egypt is also true for the MENA region more generally. The tourism sector was in good shape before the Arab Spring began and there are no reasons to think it will not recover. But the extent of recovery is contingent on the relative success of the political transitions now ongoing in several countries. In the meantime, Gulf States will continue to benefit as visitors to the region seek alternative destinations.