Jordan - Tourism sector constituted 10.5% of GDP in 2005

Published October 1st, 2006 - 11:25 GMT

The tourism sector is considered to be one of the most important sectors in Jordan's economy, constituting 10.5% of GDP in 2005, and grew at a CAGR of 7.9% during 2001 to 2005. Jordan is a destination with many iconic tourist attractions, such as Petra, Wadi Rum, and the Dead Sea.  Tourism has been also a major driver of the real estate market in Jordan as well with many projects under construction coming up shortly in the tourism sector. Total tourist arrivals in the Middle East region stood at around 38.4mn in 2005, accounting for 4.8% of the world's total tourist arrivals. Jordan accounted for 7.8% of total tourist arrivals in the Middle East region in 2005, which grew by 4.7% on a year on year basis. It is worth noting that tourist arrivals in Jordan witnessed a 21.1% growth in 2004 following the war on Iraq in 2003.

 

All the figures point out that tourism in Jordan has been growing at a steady rate. The total number of tourist arrivals in Jordan grew at a CAGR of 7.5% during the four years from 2002 to 2005. The number of nights occupied grew at CAGR of 16.7% during the same period, while the number of rooms grew at CAGR of 17.6%. Occupancy rates in Jordan's hotels stood at 48% in 2005 up from 32% in 2002. Employment in the tourism sector also grew at a CAGR of 11.3% during the same period indicating the upbeat activity in the sector.

 

Tourism income grew at a CAGR of 11.6%, and stood at JD1.02bn in 2005, and increased by 8.3% on a year on year basis. It is worth noting that the year 2004 alone witnessed a year on year increase of 25.3% in tourism income following the war on Iraq. Arab visitors accounted for the major part of the total tourism receipts in Jordan in 2005, followed by foreigners, and Jordanian residing abroad.  However, the foreign visitors' share of tourism receipts has been increasing since 2002 at the expense of the Arab visitors' share.

 

Arab visitors' share of total tourist receipts stood at 54.2% in 2002 decreasing to 52.8% in 2005, while the foreigners' share of total tourism receipts stood at 26% in 2002, increasing to 27.8% in 2005. The share of foreign visitors also witnessed the highest growth during the four year period from 2002 to 2005, growing at CAGR of 13.7% compared to a CAGR of 10.2% for Arab visitors. On a year on year basis, foreign visitors share increased by 11.5%, while the share of Arab visitors increased by 5.9%.

 

The capital city Amman accounted for 71.6% of total tourist nights in 2005, followed by Aqaba on the Red Sea (14.3%), Petra (8%), and the Dead Sea (4.8%). Aqaba hosts the Aqaba Special Economic Zone (ASEZ) established in August 2000 for the purpose of establishing industrial projects as well as turning Aqaba into a unique tourist destination.

 

Realizing the potential of the tourism sector in Jordan, and the supportive role of the government, foreign investments mainly from the Arab region has been pouring into tourist related projects in the Kingdom. Aqaba has been receiving the bulk of these investments with two major projects coming up namely the US$620mn Saraya Aqaba project, and the US$600mn Ayla Oasis project. Other projects coming up in Aqaba include Aqaba Intercontinental Hotel and Resort, Aqaba Kempinski Ishtar Hotel, and the US$500mn Tala Bay Resort. The Dead Sea is also having its share of investments with US$450mn investments including new hotels such as Kempinski and Holiday Inn, and a water park.

 

Although the industry has not realized its full potential yet, we believe that it is on the right track to achieving so. Preliminary figures released by the Ministry of Tourism and Antiquities indicate that the impact of the attacks on three five star hotels in Amman back in November 2005 was short lived and that the growth in the sector was resilient. Tourist receipts in the first quarter of 2006 increased by 3.4% compared to the corresponding period in 2005. In addition, credit to tourism, hotels, and restaurants category registered the highest growth rate increasing by 21.3% in May 2006 compared to the year end 2005 level reflecting the upbeat state of sector. With the sizeable investments in tourist projects, the sector is set for another growth stage. (Source: Global)

 

 

 

 

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