Full speed ahead

In spite of regional uncertainty and the prospect of war, money is pouring into the tourism sector and intra-Arab travel is booming

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By  Massoud Derhally Published  March 6, 2003

|~||~||~|The fall out from September 11 may not be entirely over, but tourism in the Middle East has fared better in 2002 and is learning to ride out uncertainty — that thing that business hates most. In 2002, the number of international tourist arrivals in the Middle East rose 10.6% to 24 million, after almost a 4% drop in 2001, according to the World Tourist Organisation (WTO).

Not only is growth in international arrivals to the Middle East outstripping the world’s average, but intra-regional travel among Arab countries is also reported to have picked up.

In order to alleviate some of the fears that consumers may have had about travelling to the Middle East, hotels in the region discounted their average room rates by 4.6% in 2002. This helped boost demand by 5.2% over 2001 levels, according to Hotel Benchmark at Deloitte & Touche, the largest independent source of hotel performance data outside of North America. The average occupancy rates at hotels across the Middle East, according to Hotel Benchmark, was 61% in 2002.

Arabs are also very much on the move. With persistently negative reports about how Arabs are being treated when travelling west, intra-regional travel has increased in the Gulf, Levant and North Africa, according to industry insiders. “Arab tourists are not travelling to the US,” says Rahul Pradhn, assistant manager for sales and marketing at Sharaf Travel in Dubai. “It [the US] has gone completely off the list. I have not heard of anybody wanting to go to the US, not even people who have studied there. People prefer to go to an Islamic country. The number one destinations regionally are Egypt and Lebanon,” adds Pradhn.

All one has to do is to turn on the television or open a newspaper to see the advertisements taken out by tourism authorities from Casablanca to Dubai. All have been working in overdrive to get a piece of the action in the regional market. Each country has in some way or another; either built on its existing tourism infrastructure or is implementing a long-term strategy that entails large-scale multi-million dollar projects.

Traditionally, countries touched by various civilisations, which have left them with remnants of history, were the ones to which tourists flocked. The situation today though, is a bit different, as countries with little or no historical relics reinvent themselves.
Lebanon once dubbed ‘the Paris of the East’ — but shattered by a 15 year civil war — is again making its mark on the map as a prime destination not only of international visitors but regional tourists as well. There is certainly evidence that the country is regaining ground lost from peak times prior to 1975.

Hotels that became vantage points for snipers during the civil war are today full of tourists. In 2002, the country received 956,464 visitors from around the world, of which 420,659 came from the Gulf, according to Tony Kayrooz at the Lebanese tourism ministry.
“The September 11 attacks affected many things, including intra-Arab tourism. It actually created growth in Lebanon, Syria, Egypt, Turkey, Cyprus and Dubai,” Pierre Ashqar, head of the syndicate of hotel owners in Lebanon, told Arabian Business. “Lebanon is once again playing its role. Lebanon doesn’t just sell air, the beach, and the mountains, but a way of life,” he adds.

The increase in arrivals to Lebanon in 2002 is consistent with year over year increases, which have averaged 100,000 more tourists each year. Kayrooz says it is widely expected that the country could well see a return to its days of glory in 1974, breaking the record of 1.4 million tourists. The majority of tourists to Lebanon came from the Gulf: 96,516 from Kuwait and 144, 569 from Saudi Arabia. In the month of February 2003, which coincided with Eid, Beirut saw the arrival of 100,000 tourists from the Gulf.

There is an important message embedded in the increase of intra-Arab tourism, says Ashqar. “Tourism in its roots is regional. Even in Europe, when they say 77 million tourists went to France, around 63% of them are European, so from the start you have to encourage the growth of regional tourism,” he says.

Taking advantage of a vacuum

The emirate of Dubai, too, has become a beacon of success for the region. With little oil, the tiny emirate wants to become a major destination for Europeans who want to soak up the sun on its white beaches, and for Arabs who want to shop and pursue recreational activities. The annual Dubai Shopping Festival, the Tennis Championship, the abundance of hotels, white beaches, and conference and exhibition facilities have all has an impact.

“There is huge demand for Dubai because of its reputation and infrastructures,” says Awadh Al Seghayer, manager of heritage sites and events at Dubai’s Department of Tourism and Commerce. A total of 16 million passengers passed through Dubai International Airport in 2002, growth of 18% over 13.5 million passengers in 2001.

Other countries have also come to realise the value of the tourism industry to economic growth and some are emulating the successes of others. Oman last December announced it would build a US $170 million resort, the largest tourist resort of its kind in the Gulf.

The project, which is to be completed by November 2005, will include three beachfront hotels with a 700 room capacity. This development is only part of a plan by the sultanate to become a tourist destination. Oman intends to capitalise on the Port of Salalah, which has a tropical climate and has started its own Muscat festival as well.

Growth in intra-Arab tourism has also encouraged Kuwait, which for many is no more than a barren desert, to do more. The small emirate has invested heavily in its sea fronts, developed lush green parks and is encouraging the expansion of the hospitality industry to tap into conference and exhibition business. Hannes Yaghi, general manager of Le Meridien in Kuwait, says the oil rich nation, which is known for having a high number of outbound travellers to Europe and the US, “is now seeing a positive variance because Saudis and other Gulf tourists are travelling to Kuwait.”

“I foresee further development as the tourism authority is taking actions to strengthen and develop the tourism industry in Kuwait. They are developing a festival in Kuwait similar to the one in Dubai. They are trying to make a resort on Failaka Island and the entertainment climate is improving and expanding. Kuwait City is foreseeing in the next six months four big shopping malls and there is a new airport, so we are expecting more flights in,” he adds.

Le Meridien is upbeat on Kuwait and plans six new projects over the coming three years. This includes the first Art and Tech Hotel in the region, which has a high tech theme and will be more of a corporate hotel for businessmen.

Assessing the local market

Of all the GCC countries, Saudi Arabia has the largest exodus of travellers to Arab countries, but it is also becoming a travel destination, albeit slowly. The Saudis are number one when it comes to travellers, says a spokesperson at Kanoo Travel. “Absolutely, it’s the Saudis. If you look at the entire region in a snap shot, you find, according to a recent survey, that 70% of outbound travel comes out of Saudi Arabia.”

Saudis, explains the spokesperson, travel up to four times a year. In the past, it was traditionally destinations like the US and Europe that Saudis travelled to for tourism, business, education and medical treatment.

Since September 11, the US is no longer the top long-haul destination. Saudis are now looking inwards rather than outwards. They go to Lebanon, Egypt, Jordan, Syria, Bahrain, Oman, and the UAE.
“We call Saudi Arabia the backbone of the Middle East region in terms of inbound and outbound business, especially the outbound business,” says Yahya Kotub, director of sales for Le Meridien Saudi Arabia. But the inbound number of travelers seems to be gaining importance.
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“Saudi is the largest country of the GCC and most of the Muslims try to come to the kingdom to do Hajj or Umrah,” he adds. The Kingdom is planning to extend Umrah to ten months instead of three. This, says Kotub, will increase the number of people currently doing Umrah from around 3 million now to 10 million a year. “This is a good reason to expand our properties,” he says.

In the past, Saudi Arabia did not attract Arab tourists for leisure. But as the process of getting a visa to some European countries and the US has became more difficult, that may change, says Kotub.
“Saudi Arabia now has encouraged the local people to travel domestically to try and get a percentage of what Saudis spend abroad [US $300 million in the USA alone],” says Kotub.

Saudis, according to official figures, spend around SR17 billion each year on tourism and until recently not much more than a quarter of this was spent at home. During the past five years more than SR15 billion has been invested in Saudi tourism projects, including holiday villages, recreation centres and shopping malls. Hotel capacity has increased by 41,000 rooms.

A tourism authority has been created and is working to attract Arab travellers and other nationalities to the Kingdom. Every year, the Kingdom hosts 10,000 Japanese tourists for leisure. There is also a plan to encourage Americans and Europeans.

The Kingdom of Bahrain, connected to Saudi Arabia by a causeway, has plans of its own when it comes to tourism. The Kingdom has traditionally depended on Saudis driving across for the weekend.

According to official figures, Bahrain attracted 4.4 million visitors in 2001, of which Saudis constituted 94%. But times are changing. The Kingdom wants to do much more than position itself as a transit venue for long haul travelers and aims to leverage the presence of banks and multinationals.

The tourism industry accounts for between 10%-15% of Bahrain’s annual GDP, and the country wants to increase the size of the industry. It hopes that by investing in its leisure and recreational facilities, it should be able to initially attract more tourists from the Gulf, while in the long term developing its appeal to long haul passengers.

The Nabih Saleh project aims to turn the island into a major part of Bahrain’s tourism product by radically renovating the mosque, developing natural spring waters and introducing a general programme to enhance the island’s natural beauty and infrastructure. In February 2003, the kingdom announced plans to build a US $175 million indoor ski resort.

Changing the mindset

Countries are also slowly realising the importance of not having bureaucracy and red tape, a sure deterrent to attracting tourists. Complementing the marketing drive is an overhaul by governments of visa requirements in order to encourage tourism and business travel. Qatar’s General Tourism Authority (QGTA), which hopes to attract some 1.4 million tourists by 2010, has indicated that visitors to the small emirate will witness a relaxation in visa procedures.

Currently, thirty-three nationalities can obtain visas on arrival at Doha international airport. In Oman, which already allows 53 nationalities to obtain visas on arrival, visa procedures have been eased considerably,

In 2002, Dubai became one of three countries in the world and the only one in the Middle East, to operate a revolutionary e-gate immigration system at its international airport. This will gradually reduce the waiting time for transfer from check-in desks to departure lounges and entry from jetway to the customs hall on arrival
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Kuwait has also implemented its own version of an ‘e-visa.’ According to Yaghi of Le Meridien, the authorities have opened up with regard to the visa regulations. “All hotels are equipped with an electronic visa facility. Hotels apply for a visa and within six to eight hours the authorities can issue the visa,” says he says. There is also speculative talk in local newspapers about having one tourist visa for all GCC states.

All of the action taken so far is welcome, but there is always room for improvement and more could be done to nurture growth. “You can’t expect everything in one or two years,” says Ashqar of the Lebanese hotel syndicate. “Countries need to do two things: they need to open up the borders and have free movement without barriers — people in Europe drive 1,000 km without anyone asking a question. There also needs to be a free skies agreement; a shuttle service between all the countries.”

Sami Zoghbi, the managing director of Le Meridien for the Middle East and West Asia agrees. “This part of the world has huge growth potential for tourism in general, and if you look at the world’s statistics of international travel, we get peanuts,” he says.
“What still prevents that traffic from getting into this part of the world is that legislation for tourism in most countries is erratic, it’s not unified and that in itself is a problem. Visas are also a problem.”

Once gain, Dubai has shown the way for the rest of the region. “Dubai has overcome all this, and the rest of the region has to wake up if they want to get tourism,” says Zoghbi. “They have to say this is a big hard currency earner for us, which provides lots of jobs and we have to make it easy and accessible for tourists to come.” ||**||

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