Good things in small packages: Benefitting from a diverse offering, the sector is displaying signs of recovery amidst a difficult regional backdrop

A crucial element of the economy, tourism receipts accounted for 14% of Jordan’s GDP in 2010. Despite a downturn in 2011, there are signs of recovery and initiatives are moving forward to develop the sector, which already offers a wide range of tourism products. Major projects under way include the development of the Dead Sea area and several large-scale real estate ventures in the resort town of Aqaba, one of which will add 17 km of additional coastline through the construction of man-made lagoons.

Nonetheless, the industry was affected by regional unrest in early 2011, particularly by the events in Syria, with a number of travellers from outside the Middle East wary of the region as a whole. Economic woes in parts of Europe have also contributed to the recent drop in visitors and receipts.

INDUSTRY PERFORMANCE: According to figures from the Ministry of Tourism, total arrivals stood at 6.83m in 2011, with 3.97m staying at least one night. This figure is down 17.2% on 2010 arrivals, though the fall was slightly less pronounced amongst overnight visitors, at 12.8%. Tourism receipts for 2011 were JD2.13bn ($3bn), down from approximately JD2.45bn ($3.46bn) in 2010, a 15.02% decrease.

This drop in numbers can largely be attributed to regional political tensions and economic problems in a number of source markets. According to Bassam Maayeh, the managing director of Arab International Hotels Company (AIHC), “Most package tourists to Jordan come from Europe; however, indebted consumers from this part of the world are eschewing the Levant for closer destinations.”

In addition to general wariness of Middle Eastern destinations – despite the lack of large-scale demonstrations or unrest in Jordan – more than 30% of leisure-only visitors come to Jordan as part of combination packages that include other countries in the region, such as Egypt and Syria, both of which were seriously affected by political turmoil. Many tourists planning such trips cancelled them entirely, causing Jordan to lose out. As a result, according to data from the Ministry of Tourism and Antiquities (MoTA), package tour visitors fell by 41% in 2011 to 419,571, with package tourism nights spent down 43.9% to 1.79m, as the average length of stay shortened from 4.5 days to 4.3 days.

Turmoil in neighbouring Syria appears to have particularly affected the sector; tourism receipts rose slightly in January 2011 and were steady through February, when unrest in Egypt was at its height. However, receipts fell precipitously in the second and third quarters as violence intensified in Syria.

Encouragingly, the fall in tourism receipts slowed in the fourth quarter to 12.3% year-on-year from a 25.9% dip in the third quarter, and there are signs that 2012 may witness a slight recovery. “2011 was a catastrophic year for inbound tourism, but January and February of 2012 have been going better,” said Muath Sbeih, the director of the outbound department at Travel One, a Jordanian travel agency. Air traffic data supports this, with arrivals to Amman’s Queen Alia International Airport (QAIA) up by around 20% for the first two months of 2012 (see Transport chapter).

ATTRACTIONS: One of Jordan’s key selling points is its diversity. According to Munir Nassar, the chairman of the Jordan Inbound Tour Operators Association (JITOA), “The Jordanian tourism product is quite varied compared to similar markets in the region. It offers culture, wellness, religion, leisure and adventure, meaning it appeals to more than one niche. The infrastructure and superstructure, such as hotels and tourist facilities, are also quite good, and though the country is not the cheapest in the region, it nonetheless represents good value for money.” Siham Gammoh, the research director of the JTB, agreed. “Tourists can have a wide variety of experiences in Jordan, and in a relatively short time due to its compact size.” Gammoh further stated that there are six main tourism products available in Jordan, namely history and heritage, ecotourism, leisure and wellness, fun and adventure, religion and faith, and meetings, incentives, conferences and exhibitions (MICE).

“The weather is also a significant advantage” said Yassar Al Majali, the general manager of the Jordan Hotel Association (JHA). “It does not reach the extremes of the Gulf in the summer, and there is a variety of climactic zones in the country; for example, if it is either too cool or too hot in Amman, you can travel 30 minutes to the Dead Sea where it will be substantially warmer, or to nearby Ajloun where the weather is cooler. However, given what is currently happening in the rest of the region, safety and security are Jordan’s biggest advantages.”

The country also boasts a range of historical sites, such as the Nabatean city of Petra, voted one of the “seven wonders of the modern world” in 2007. Petra remains the country’s major attraction in terms of tourism sites, with 629,864 visitors in 2011, down 35.4% on the same period in 2010, according to figures from MoTA.

LEISURE: Despite Jordan’s diversity, the market cannot be everything to everyone or compete equally on all fronts. “Leisure is something of a weakness for the Jordanian tourism market, particularly given the shortage of beaches,” said Travel One’s Sbeih. Jordan has just 27 km of sea coastline, all of which is in Aqaba, though the Ayla Oasis project is set to add 17 km of waterfront along man-made lagoons. However, the Egyptian Red Sea resort of Sharm El Sheikh is significantly cheaper, due in part to lower labour costs. “It can even be cheaper for Jordanians themselves to go to Sharm than Aqaba” added Sbeih.

However, recent survey data from the Jordan Tourism Board (JTB) suggests that visitors who come to Jordan for leisure purposes strongly enjoy themselves, increasing the potential for return visits and positive word-of-mouth marketing. Some 95.6% of respondents to the JTB’s 2010-11 arrivals and departures survey who came to Jordan for the purposes of vacation and leisure rated their trip as being “thoroughly enjoyable”. The other survey options were: enjoyable but not outstanding (3.5%); somewhat disappointing (0.7%); and very disappointing (0.2%).

ACCOMMODATION: As of 2011, there were approximately 490 hotels and other tourism accommodation venues in Jordan, up from 487 in 2010, with a combined total of 24,401 rooms and 46,860 beds, according to MoTA data.

Hotel room occupancy rates stood at 48% in 2010 as a whole, peaking at 42% in 2011. Occupancy rates in Amman were significantly higher in four- and five-star hotels than in lower-end properties (55% in the five-star segment compared to 17.4% in the one star), according to data from JHA, suggesting that there are greater opportunities for growth at the more expensive end of the market. While occupancy rates do not vary greatly across the country, they are particularly high at hotels around the Dead Sea (see analysis).

“Land in Jordan is relatively expensive and room prices are generally low by regional standards, and consequently, the return on investment for hotels is comparatively low,” said Al Majali of the JHA. “Combined with regional events, this makes firms reluctant to invest.” As a result, the number of hotels has increased slowly in recent years; between 2002 and 2011, the industry only added 29 hotels, representing less than 6% growth, according to MoTA figures.

Another challenge facing the hotel segment and potentially slowing down expansion is recent increases in the price of power. In late May 2012, Al Majali told The Jordan Times that hotels would likely have to cut staff due to electricity tariff increases of 19-40%, pointing out that hotels would not be able to incorporate the hikes in the prices of rooms and that they would have to seek to reduce costs as a result.

MAJOR PROJECTS: However, the segment appears set to expand more rapidly in the coming years, partly due to recent developments at the Dead Sea and Aqaba, where a number of real estate mega-projects are under way (see Aqaba chapter).

In another sign of renewed confidence, Jordan’s Rubicon Holding and US-based Callison, an architecture and design firm, in May 2011 announced plans to build the Red Sea Astrarium, a $1.5bn themed resort located in Aqaba. The resort will include four hotels and a Star Trek-themed entertainment centre, which is being developed with Paramount Recreation and CBS Consumer Products. In October 2011, it was reported that the project had secured funding from a mix of US and Gulf investors.

In an example of high-end development in Amman, Al Maabar, the developer behind Aqaba’s Marsa Zayed project, is also developing the Amman St Regis and the Residence St Regis in the Abdoun area of West Amman. The project, which will be developed on an 18,000-sq-metre plot of land, will include the 276-room St Regis hotel, as well as two residential towers with a total of 79 private residences.

SOURCE MARKETS: Syrians currently account for the largest number of visitors to Jordan by country. A survey carried out by the JTB suggests the bulk of Syrian visitors are either transport drivers or people visiting family and friends. Of European countries, Israel (which the authorities classify as a European country for the purpose of tourism statistics) accounted for the largest number of visitors at approximately 212,191, followed by Turkey at 156,425, the UK with 89,119, and then France and Germany with 63,856 and 59,632 visitors, respectively.

The country is increasingly looking at new and nontraditional source markets to boost arrival numbers. “South America is a key growth market for us,” said Sbeih, with wealthy seniors interested in biblical tourism driving this recent growth. The market is a potentially lucrative one; according to a survey carried out by the JTB in 2010 and 2011, visitors from the Americas were the highest spenders in Jordan, spending an average of JD111 ($156) per day excluding international travel costs, compared to an overall average of JD54 ($76). By nationality, Chileans were the highest spenders in 2011, averaging daily expenses of approximately JD221 ($311), followed by Mexicans on JD209 ($294) and Argentinians on JD172 ($242). Nassar also considers Indonesia and other Asian countries as growth source markets.

HUMAN RESOURCES: In 2011, the sector employed 41,879 people, according to MoTA data, a slight increase on the same period in 2010. Restaurants accounted for 40.3%, followed by hotels with 36.1% and travel agencies with 11%.

Recruiting qualified staff can be difficult, and pressure is likely to increase given that the National Tourism Strategy (NTS) is seeking to create an additional 25,000 jobs in the sector by 2015. “Our main challenge is human resources,” said Al Majali. “Demand remains above supply, especially in areas such as the Dead Sea and Aqaba, where hotels often have to bring people in from Amman, which can be costly,” though he adds that the situation is improving.

As in other sectors, such as IT, the Jordanian tourism industry faces competition for graduates from better-paying markets in the region. “We face a problem of training up staff who then leave for the Gulf,” said JITOA’s Nassar. “As a result, there is always a shortage of qualified staff, and with the number of new projects and hotels in the pipeline in places such as Aqaba, the Dead Sea and Amman, we need to start training new people.” Some industry sources also report that many Jordanians are reluctant to work in the hotel sector, and that cultural factors limit the availability of female staff in particular. The new NTS recognises this, and is looking to address the image of the sector as a place to work; some of its elements consequently include “a comprehensive national programme to promote tourism as an attractive career option” and a tourism awareness campaign with a special focus on women. The industry has also made efforts to improve the availability of human resources. The JHA is the main shareholder in Jordan’s Applied University College of Hospitality and Tourism Education, which offers high-school and BA-level courses and has approximately 1000 students. The school runs six-month training courses in areas such as hotel management and reservation systems, housekeeping, front office work and English language skills.

Overall service in Jordan appears to be highly rated; 95% of respondents to the JTB’s 2010-11 arrivals and departures survey who had come to Jordan for the purposes of vacation and leisure said they were satisfied with the service provided at Jordanian tourism sites. Approximately 5.6% described themselves as “somewhat satisfied”, or rated the standard of service as “intermediate” or “fair”, while only 0.2% of survey respondents classified service as “poor”.

RELIGIOUS SEGMENT: One of Jordan’s most important tourism niches is the religious segment, centred on Christian pilgrimage sites, such as the location on the Jordan River where St John baptised Jesus, as well as Mount Nebo. The religious market is a high-spending one; according to the JTB’s 2010-11 arrivals and departures survey, religious tourists spent an average of JD218 ($307), four times the average visitor and well above all other categories. Religious tourists from the Americas and, to a lesser extent, Asian Pacific countries, were particularly high spenders. “Not only do religious travellers spend, but the potential for sheer numbers also makes the market particularly interesting. The religious market also tends to be less sensitive to regional unrest,” said Nassar.

In addition, Jordan is looking to boost the number of Muslim pilgrims visiting the kingdom. For example, in June Abed Al Razzaq Arabiyat, the deputy managing director of JTB, said the tourism board was marketing Jordan to Malaysians who were planning to perform the Umrah and Hajj pilgrimages to Mecca in neighbouring Saudi Arabia. Such efforts could be expanded to other Muslim countries in Asia, such as the high-spending Indonesian market and beyond.

WELLNESS & MEDICAL: Among medical tourism destinations, Jordan ranked first in the Arab world and fifth globally in a 2008 World Bank report. Figures from the Jordanian Private Hospitals Association (PHA) indicate that approximately 180,000 tourists came to Jordan for health treatment in 2011, down from 220,000 the previous year. The sector brings in around $1bn in revenues each year. “The medical tourism market is particularly promising, as visitors often come for long stays and bring their families with them,” said Sbeih. “Jordanian doctors have a good international reputation and the country is also known for high-quality and affordable dentistry.”

A survey carried out by the JTB between August 2010 and July 2011 found that just under 6% of visitors to Jordan came for medical treatment. This rose to 10.6% for the Arab tourism market, with a significant majority of Yemeni, Sudanese and Libyan visitors coming to the country for medical purposes. While the JTB’s survey suggests that medical tourists do not spend more money in the country per day than leisure visitors, the average length of stay for medical tourists is 9.7 days, nearly double that of tourists in the vacation and leisure category and ahead of all categories of visitors except for students.

The local private health sector is also active in working to develop the segment. For example, the PHA attends regional conferences and trade fairs to promote the segment, such as the International Medicare Exhibition that took place in Erbil in Iraq’s Kurdish region in May 2012. Additionally, in March the PHA organised the International Medical Tourism, Wellness and Spa Congress, which was attended by around 350 participants from 25 different countries.

Wellness tourism primarily consists of spa and skin treatments at the Dead Sea, which is popular with nationals of some Western European countries, and Russians and Germans in particular, with some national insurance systems paying for treatments. The medical tourism segment is more focused on regional tourism markets, with clients from Gulf countries coming to Jordan for treatments during the summer months in particular. Although arrivals from Libya decreased by 52.1% in 2011, as of early 2012, anecdotal evidence suggested that large numbers of Libyans hurt during the country’s civil conflict were using their state-provided health insurance to seek treatment in Jordan, helping to bring about near 100% occupancy rates in hotels in Amman.

The industry is now also looking to break into other source markets for the medical segment. “We are looking to attract people from the EU, the US and Canada,” said Nassar. “Jordan now has a number of hospitals and labs that are accredited by international organisations, which should help.”

One area of medical tourism that has yet to take off is cosmetic and non-essential procedures, such as laser eye surgery, with many Jordanians themselves going to Lebanon for cosmetic surgery. Nassar pointed out, though, that there is potential for significant growth, as Jordan already has a number of LASIK eye treatment centres.

ECOTOURISM: Ecotourism is another burgeoning niche. “Ecotourism is an excellent product for the European market, as many Europeans like to ‘go green’, said Al Majali, citing the Feynan eco-lodge, owned by the Royal Society for the Conservation of Nature (RSCN), as a model for the sector. In January 2012, the RSCN opened the Nature Training Centre, an ecotourism training academy in Ajloun for guides, rangers and eco-lodge managers, which should help increase standards and the availability of trained human resources for the segment. The academy, which is expected to open in mid-2013, and which should help increase the availability of skilled personnel for the segment, will be part of a larger ecotourism centre for the Ajloun forest region.

SECTOR PROMOTION: The JTB is responsible for marketing Jordan abroad as an inbound tourism destination. The body, which is chaired by the minister of tourism, is a partnership between the industry and the government, with 75% of its funding coming from the state and the remainder from the industry. The JTB’s budget for 2011 was initially set at approximately JD8m ($11.25m), but the government subsequently raised it to JD11m ($15.48m) in response to the downturn affecting the sector. The budget for 2012 is currently set at JD8.7m ($12.3m).

The JTB currently has 11 representative offices outside of Jordan, including branches in the US, Russia, Germany, France, Italy and Spain; most recently, it opened an office in India in 2010 and Brazil in 2011. “Brazil is a promising market where we are targeting religious visitors in particular,” said Gammoh. The JTB is also looking at re-opening an office in GCC states. It carries out activities in countries where it does not have a permanent representation and operates a website in 14 languages. JTB activities include participating in major tourism trade fairs and bringing foreign press and tour operators to Jordan on familiarisation visits to enable them to better sell the country. “Our goal is to develop and expand the distribution channels of Jordanian tourism offerings, such as increasing the number of tour operators abroad that sell Jordan as a destination,” said Gammoh. The organisation runs a virtual academy that allows operators to take a training course that certifies them to promote Jordan as a destination. The JTB also has an office at Amman’s QAIA that provides assistance to arrivals and promotes Jordan as a destination to transit passengers.

FOCUS FOR 2012: In 2012, the JTB is concentrating on marketing the religious, wellness and medical, and MICE segments of the market, as well as building on the 200th anniversary of the rediscovery of Petra. “For the wellness and medical market, we are mainly concentrating on the GCC, Austria and Germany, focusing on Dead Sea skin treatments for the latter two,” said Gammoh. “In the MICE segment, we are concentrating on the UK.” The body is also working on extending the length of time visitors are in country by promoting cultural products, such as cookery courses and stays with local communities.

JITOA, which primarily represents inbound tour operators, also carries out some marketing activities in countries where the JTB does not have a permanent presence. “A lack of sufficient funds from the government for promoting Jordan is the biggest obstacle to the growth of the sector,” said JITOA’s Nassar. “The JTB does a good job promoting Jordan, but it could do with more resources. Donor agencies provide support, but they are mainly geared towards technical support, whereas what we basically need is money for marketing.” Al Majali agreed, “The JTB budget is not big enough to take out adverts on major international news channels and really boost the hotel occupancy rate.” Some industry players complain that swings in the budget make it difficult for the board to properly plan ahead and maintain a consistent strategy. To address this, the 2011-15 NTS includes plans to identify new funding requirements for the JTB and to allocate approximately 2% of total tourism receipts to fund JTB operations.

STAND-ALONE VS PACKAGES: In the wake of the Arab Spring and due to the cancellation of a number of multi-country package tours, one of the JTB’s main priorities is to promote Jordan as a stand-alone destination, particularly for short-haul markets, according to Gammoh. “Jordan needs to develop an independent identity in the tourism business, and not just rely on package visitors from Europe who intend on visiting other countries,” said Maayeh.

The private sector is also aware of the need to make more efforts in this direction. “The industry needs to be more creative in proposing itineraries, particularly in niche markets,” said Nassar. “Otherwise, it mainly comes back to the question of funding for the promotion of Jordan as a stand-alone destination.” To this end, JITOA plans to run a series of training seminars in May 2012 that will provide operators with the know-how to better promote the country.

However, some industry players caution that overemphasising Jordan as a stand-alone destination could prove counter-productive if this means failing to leverage its proximity to other tourism markets. “Our status as a hub in the Middle East is causing some problems now due to the situation in neighbouring countries, but in the long term, it is an advantage that makes it easier to convince tourists to visit Jordan, particularly people on long-haul trips” said Sbeih. “Excessively focusing on the country as a stand-alone destination could prove particularly damaging for the Biblical tourism market, for example, given the potential to attract tourists visiting nearby countries, such as Israel.” In addition to its efforts to promote Jordan as a single destination, the JTB is also trying to create links with nearby countries unaffected by unrest, such as the UAE and Turkey. “Turkey is a particularly fine match for Jordan, given the shared history and cultural similarities,” said the JTB’s Arabiyat.

NATIONAL TOURISM STRATEGY: The 2011-15 NTS aims to almost double tourism revenues on 2010 figures to JD4.2bn ($5.91bn) and bring in up to 9.4m arrivals. The strategy also aims to increase domestic tourism receipts by 30%. Projects such as the Dead Sea Master Plan should help address this. However, Gammoh said the targets will likely have to be revised in light of the downturn. The NTS envisages state investment of JD152m ($213.84m) in promoting the sector during the strategy period, with the private sector contributing a further JD38m ($53.46m). The strategy also envisages inbound air capacity rising by 20%, which the construction of a new passenger terminal at Amman’s QAIA – due to be completed later in 2012 (see Transport chapter) – will help achieve. It also aims to create a further 25,000 direct jobs in the industry, as well as increase female participation in the tourism workforce by 25%.

On the legislative and regulatory side, the strategy also foresees the passing of a new tourism law. MoTA is currently working to develop this law, as well as update existing tourism by-laws, which should be completed by the end of 2012. The strategy also aims to reduce seasonality. In 2010, 32.5% of receipts were taken during the third quarter, as opposed to 19.6% in the first. The strategy aims to ensure no quarter accounts for less than 22% or more than 28%.

One area where the industry continues to lobby the government is the removal of requirements for certain nationalities to obtain visas before departing for Jordan. The tourism industry recently succeeded in having India removed from the list and is now looking at Asian countries in particular, including the Philippines. Indian arrivals more than doubled between 2006 and 2011, from 28,640 to 67,464, following the regulatory change. India’s Christian population is a promising potential source market for biblical tourism. According to the JTB survey, nearly half of Indian visitors to Jordan are religious tourists.

OUTLOOK: Despite the recent downturn, 2012 is shaping up to be a better year for the industry and major investments in the sector warrant optimism regarding Jordan’s long-term potential. According to Oussama Massoud, the regional general manager for Jordan and Palestine for the Crowne Plaza, which is opening a new Dead Sea property in 2012, the entry of foreign brands into the market should help to support sector growth. “Growing foreign involvement in the sector will not lead to unhealthy competition; on the contrary, the arrival of internationally branded hotels will grow the tourism and hospitality market for everybody,” Massoud said. Projects such as the expansion of QAIA and the multi-purpose developments at the Dead Sea and Aqaba are set to expand capacity and the range of activities at key sites, boosting both domestic and international tourism alike.