Tourism sector struggling in Jordan
Annual revenues generated by the tourism sector contribute 13 to 14 percent of Jordan's GDP, a rate that might not be achieved in 2011 as the first half of the year witnessed a 12 percent drop in the sector’s revenues
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Although the tourism sector has exhibited steady growth in recent years, this year is witnessing a downturn in the industry’s growth that has so far diminished its contribution to the Kingdom’s gross domestic product (GDP).
Experts differ in their analysis of the situation and end-of-year forecasts, but agree on the need for a feasible strategy to address any shortcomings, as a senior official says the plan is already under preparation.
Annual revenues generated by the sector contribute 13 to 14 percent of the GDP, a rate that might not be achieved in 2011 as the first half of the year witnessed a 12 percent drop in the sector’s revenues, official figures show.
The sector’s earnings in the first six months of the year amounted to JD949 million, down from JD1.089 billion in the first half of 2010, according to the statistics, released during the past week by the Ministry of Tourism and Antiquities.
Approximately 3.124 million tourists visited the country in the January-June period, a 14.2 percent drop compared to the same period last year, when the figure stood at 3.639 million, according to the ministry’s report.
The report indicated that the drop in the number of tourists in the first six months of 2011 was due to the political turmoil in the region, which led to numerous cancellations by tourists who were planning to visit the region.
Economic analyst Yusef Mansour forecasted that the sector’s share in the GDP in the entire 2011 might drop by 1 to 2 percent.
“The major decline in tourism revenues is due to drop in the number of non-Arab visitors,” Mansour told The Jordan Times over the phone, adding: “We will be able to offset the drop through the increasing revenues from Arabs who are not able to go to Syria and Egypt” due to political instability in the two countries. This will leave the country with a slight drop in tourism revenues of 1 to 2 percent by the end of the year.
But according to veteran economist Jawad Anani, although the number of Arab visitors is relatively high and is expected to further rise, the drop in the sector’s revenues might persist at its midyear level.
“The government has not adopted feasible measures to protect tourism, which is the mostly affected industry as a result of the Arab Spring,” Anani said.
Non-Arabs are not coming to Jordan simply because of its geographic location in a turbulent region, he said. But for Arabs, “it is the only safe place to visit”, because they know the facts better.
“I hope we will be able to attract those who cannot go to Syria and Egypt during the summer season. But still, there will be a drop in tourism’s contribution to the GDP,” the analyst said.
He added: “The government should come up with a strategy to sustain the sector’s competitiveness, not only this season, but in the long term.”
He explained that the sector, including medical and education tourism, is not only a major contributor to the growth of the economy but also a generator of employment opportunities as well. “That is another reason to pay more attention to the development of this industry,” he said.
“Tourism is going to face challenge, as all Gulf countries are improving their education and health services, not only to have sufficient services for their people, but also to bring people for treatment there, that’s why they will compete with Jordan,” the expert warned.
According to official figures some 200,106 overnight tourists from the Gulf countries visited Jordan in July 2010. Ministry of Tourism figures showed that more than 100,000 tourists from the Gulf came to the Kingdom in the first three weeks of this month.
“Having this number of overnight visitors from the Gulf is great,” Minister of Tourism and Antiquities Haifa Abu Ghazaleh said, explaining that figures in July last year were higher because some tourists who used to pass through Jordan to Syria used to be registered twice because some of them used to spend one night on their way to the destination country and another night on their way back.
She acknowledged that the officials in charge of promoting the country’s tourism products started their campaign in the Gulf states “late”.
“However, our target is to attract more visitors for the upcoming years,” Abu Ghazaleh told The Jordan Times.
Former minister of tourism Aqel Biltaji agrees with Anani.
Currently “we do not have new bookings, and if this tendency continues, we will have no tourists in the winter and the first quarter of 2012”, Biltaji told The Jordan Times.
Medical tourism, a major source of income, has been hit as well, he said.
The sub-sector, which annually generates $1 billion on average, is expected to witness a 25 percent drop in the number of patients and revenues by the end of this year, Awni Bashir, president of the Private Hospitals Association, told The Jordan Times in a previous statement.
Annually, some 242,000 patients from across the world receive treatment at the Kingdom’s private hospitals, with a majority of them coming from Yemen and Libya.
“There are not many patients coming from Yemen and Libya due to the turmoil there,” Biltaji said.
Jordan Tourism Board (JTB) Managing Director Nayef Fayez agrees with the experts, asserting that his agency is working to remedy the situation.
“The drop in tourism revenues will have a direct impact on the state’s treasury and other allied industries,” Fayez said.
He noted that the JTB, in cooperation with the private sector, will have to work on “saving tourism not for the rest of the year, but also for the coming years”.
“We are currently conducting a study in cooperation with the private sector to come up with a strategy to mitigate the impact of the crisis at hand,” Fayez said, adding that promotion campaigns will be tailored accordingly, and in line with the needs of each targeted country.
As for medical tourism, Fayez said: “Even if the Gulf countries are developing their services, Jordan will be a leading country and attract more patients because it has local experts, which will be reflected in a lower cost.”
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