Gaining speed: Several major public-private partnerships will stimulate the sector

The tourism sector has grown at a steady pace in recent years, and with the Ministry of Tourism’s aim of increasing the number of arrivals to 20m by 2020 under the Vision 2020 plan, considerable investment in accommodation and associated public infrastructure is required. The 20m target will require a total bed capacity of 375,000. By way of comparison, capacity at the end of 2013 stood at more than 207,500 beds, according to the ministry. In order to achieve this, the Ministry of Tourism and the Moroccan Agency for Tourism Development (Société Marocaine d’Ingénierie Touristique, SMIT) have undertaken a campaign to bring the private sector on board and obtain the necessary public capital to carry out a host of new infrastructure projects. In line with this, a number of mid-range to luxury hotel projects have either been completed or are now in the pipeline. The authorities estimate that 41% of the Vision 2020 targets will be achieved between 2013 and 2016. According to projections from SMIT, in 2013 alone 36,000 new beds were meant to be added to the sector, along with 10,000 jobs. However, by the end of 2013 only 9400 beds had been added.

PUBLIC BACKING: SMIT is the government body responsible for developing, attracting investment for and executing tourism projects with the cooperation of the private sector. Imad Barrakad, the president of the board at SMIT, told OBG, “In Morocco as elsewhere, the state aims to provide financial support and ensure the viability of tourism projects.”

According to the ministry, SMIT invested Dh14bn (€1.3bn) in 2012, a figure that is estimated to have increased to Dh18bn (€1.6bn) as of the end of November 2013. SMIT has helped attract a total of Dh70bn (€6.2bn) for the sector in the context of the Vision 2020 plan. It estimates that the amount reached in 2013 represents some 47% of the total investment, both public and private, required to achieve the targets laid out under the Vision 2020 programme, and it is aiming to attract Dh19bn (€1.7bn) in investment to increase the country’s bed capacity by 28,000 in 2014.

FUNDING SOURCES: In 2011 the Moroccan Fund for Tourism Development (Fonds Marocain de Dé veloppement Touristique, FMDT), a public sector funding pool, was created. The Ministry of Tourism hopes to attract Dh50bn (€4.4bn) from the state, the private sector and sovereign wealth funds through the creation of the fund, of which Dh10bn-15bn (€892.42m-1.3bn) will come from foreign investors. It aims to attract and direct investment toward specific regional tourism projects in an effort to support Plan Azur, which has fallen short of initial expectations. To this end, in 2011 three Gulf Cooperation Council (GCC) countries – Qatar under Qatar Holding, Kuwait under the Al Ajial Investment Fund Holding and the UAE under Arab Investments – signed an agreement with the FMDT to invest Dh20.8bn (€1.7bn) in the tourism sector under a common investment fund known as the Wessal Fund. In 2013, the FMDT acquired 25% of the fund.

Alongside SMIT and the FMDT, the country has additionally launched the RENOVOTEL fund, which is managed by the Caisse Central de Garantie and was established with the objective of financing the renovation of hotels in Morocco and improving a total of 16,000 beds by 2015. The Dh500m (€44.4m) fund, which received Dh200m (€17.8m) from the Hassan II Fund for Economic and Social Development, contributes between 35% and 45% of the required renovation costs, while the participating hotel contributes the remainder.

LUXURY INVESTMENTS: A slew of major four- and five-star hotel chains are expanding operations in the country. Barrakad said, “Based on a qualitative analysis of tourism investment projects examined by SMIT, there was a clear, growing interest in 2013 among large-scale hospitality and tourism investors to further develop the high-end and upscale tourism supply.”

The Four Seasons will be opening two hotels, one of which will be in Agadir and will have 56 residences and 132 rooms. The property, which involves total investment of Dh1bn (€89.2m), will open its doors in 2016. In addition, the chain will launch its fourth hotel in Morocco, a 183-room property in Casablanca, in 2014. Meanwhile, the Ritz-Carlton will be opening a 120-room establishment in Rabat.

Marriott International is planning on opening a hotel in Agadir in Taghazout Bay, which will have 132 rooms and 100 villas. The project is supported by Alliances, which will inject Dh750m (€66.9m), and is set to open in 2015. Meanwhile, Hilton will open two new hotels in Tangiers in the new marina with a combined capacity of 500 rooms, while the Swiss hotel chain Mövenpick will begin operations in Marrakech in 2014, with a 380-room property. The Atalayoun Golf Resort in the port city of Nador, situated in the north-east part of the country is due to open in mid-2014, with 1020 rooms.

DESTINATION DEVELOPMENT: Major projects in Casablanca and Tangiers are currently under construction that will revitalise both cities’ business and leisure tourism offer. Casablanca is seeking to spend an estimated Dh10.3bn (€919.2m), with Dh7.3bn (€651.5m) provided by the private sector, to transform the city as a destination. The funds will be spent according to a regional contract-programme, which covers 46 projects for the greater Casablanca region, three of which are major structural projects. The developments include the city’s marina, which is set to be completed soon, as well as a tourism fishing port and a port for cruise ships. The other 43 projects will be smaller, and include renovation of the city’s historic downtown and new cultural centres, parks and museums. The goal is to address the city’s current lack of tourist attractions, such as museums, monuments hotels along its coastline.

Part of the funds will also go towards expanding the marina, which is being developed by Compagnie Générale Immobilière, a subsidiary of Caisse de Dépot et Gestion (CDG), and will be completed by 2016; developing cruise tourism by extending the current port zone; and creating a fishing port for tourists. The marina, the central aspect of the project, represents a total investment of Dh8bn (€713.1m), and when completed, it will comprise three hotels, a convention centre, a port and a 60,000-sq-metre shopping centre. This package of projects is expected to lead to the creation of 1500 jobs in the greater Casablanca area.

A second major project is Casablanca Finance City, a Dh1.5bn (€134.5m) investment that is being developed by CDG. The project will provide a total of 700,000 sq metres of office space and is aimed at transforming the city into a leading regional financial centre. It is expected to provide a significant boost to the business travel segment, and in particular high-end hotels.

The port of Tangiers is currently undergoing a major expansion, involving total investment of Dh15bn (€1.3bn), which will increase the city’s capacity to host cruise ships, thereby driving growth in this niche segment. Tangiers has also begun building a new marina featuring high-end businesses and hotel. The city’s expansion plans are likely to boost the sector, adding 1600 beds and 300,000 new tourists per year by 2016.