Global Investment House - Egypt - Algeria Economic & Strategic Outlook - December 2008-
Though the tourism sector in Algeria is progressing, the sector is still underperforming. This is due to the lack of superior accommodation in addition to security problems, which have been somehow improved over the last few years. According to the World Tourism Organization (UNWTO) report on tourism highlights 2008, Algeria ranked 4th on Africa (excluding Egypt and Libya) in terms of number of tourist arrivals in 2007, as they reached 1,743 thousand tourists, representing 3.9% of the continent’s total. This implies a y-o-y growth of 6.4%, as this number amounted to 1,638 thousand tourists in 2006. In the mean time, it implies a CAGR of 10.5% over the 7-year period, from 2000 to 2007. On the other hand, tourist receipts reached US$215mn in 2006, compared to US$184mn in 2005, a y-o-y growth of 16.8%.
As for the North African Countries -excluding Libya, Algeria’s number of tourists was the least in the last three years, ending 2007. As mentioned earlier, it captured only 3.9% of total tourists visiting Africa in 2007, a relatively small share compared to its peers.
Algeria Tourists Arrivals compared to other North African Countries
*Provisional
Source: UNWTO (Tourism Highlights-2008 Edition)
Realizing the importance of the sector, the government aims at enhancing the tourism performance in the near future. To achieve this goal, it made several steps beginning with developing infrastructure, mainly roads and transportation. It is worthy to note that US$8.2bn have been allocated for public works related projects. The government also employed a plan called “Horizon 2025”, which is mainly concerned with ameliorating infrastructure. In addition, a new Algiers international airport was established in 2006.
Meanwhile, the Ministry of National Planning, Environment and Tourism signed 80 contracts with various Algerian investors in 2008, with the aim of establishing touristic projects starting from 2008. These projects, which have an estimated cost of AD20bn, include the establishment of a marina and hotels.
The government adopted a plan for the development of the tourism sector, which is to be completed by 2013. The number of tourists is targeted to reach 3mn tourists by the end of the plan’s period. The plan includes ameliorating touristic hotels and accommodation aspects, along with the quality of services provided. This plan has an estimated cost of AD232bn and is targeting to expand hotels capacity to reach 187 thousand beds, up from 92 thousand beds at the beginning of 2007. This would result from the expansion plan that covers 174 different touristic zones.
As an attempt to further ameliorate the tourism sector, the government encouraged investments and a new legislation has been announced, which includes a tax exemption for a 10-year period for tourism-related projects. In addition, it announced its plan to privatize various public hotels. It also pays a great attention to the amelioration of the Algerian bay.
Many international investors announced their intention to develop touristic projects in Algeria. These include the UAE’s Al Hamed Group, Starwood Hotels and Resorts, Accor and the Mehri Group, the US Tourist Group Panorama, the Saudi Eddar Sidar Group, Emaar and the Emirati-based real estate developer, Al Qudra Holding.
The numerous announced tourism projects indicate that the sector is to show better performance in the future, especially with the government’s aim to expand its economy through other sources than hydrocarbons.
