Focusing on niche markets to expand the sector

Whilst not endowed with the energy riches of its neighbours, Jordan can count among its blessing several natural advantages in its burgeoning tourism industry. The kingdom offers sweeping desert landscapes, natural hot springs, the rejuvenating shores of the Dead Sea and beaches along the Gulf of Aqaba. This natural landscape is further dotted with numerous religious and historical sites that offer visitors a peek into the country’s rich past. For religious tourists of all backgrounds, Jordan is an ideal location to step back in time and see some of the formative places in Islam and Christianity.

In addition to ideal year-round weather, Jordan’s tourism sector has an impressive pool of human capital that is well educated, English-speaking and welcoming. Significant investment in the health sector has helped the kingdom become an in-demand treatment destination. Indeed, UK-based International Medical Tourism Journal named Jordan medical tourism destination of the year in 2014 due to the high quality of the kingdom’s hospitals and medical facilities.

Oversight Of The Sector

Jordan’s tourism sector is administered via a network of state and non-state actors. The Ministry of Tourism and Antiquities (MoTA) oversees the sector as a whole. Throughout 2013 the ministry underlined the need to play a more unifying role in strengthening the sector through the creation of a database that would relay accurate information and figures regarding the conditions and demands of tourism projects, the numbers of tourists and other relevant statistics to the private sector.

The Jordan Tourism Board (JTB) is an independent organisation that operates on private funding with some assistance from the state. Over the years, the JTB has stepped in to fill the important role of marketing and investment promotion abroad. The JTB has divided the sector into six separate focal points: history and culture, religion, leisure and wellness, adventure, business, and ecotourism. The JTB and the MoTA are also assisted by the Investment Commission (IC), which researches and identifies investment opportunities in the sector as part of a programme of attracting and promoting foreign investment in Jordan.

National Tourism Strategy

These organisations work within the National Tourism Strategy (NTS) guidelines, which is a five-year plan published in July 2011 that articulates the government's full goals for the sector. These focus on four main points: product development, marketing, growing the labour market and improving the business environment.

According to the NTS, the government estimates that the public sector will spend $215.5m on the tourism sector with the private sector contributing $53.6m over the five-year plan to help deepen tourism offerings. Other related projects call for a greater participation of female workers in the industry, the creation of 25,000 new jobs in the sector and the training of 5000 students at vocational training centres.

Sector Performance

With updates to tourist infrastructure like the renovation of Amman’s Queen Alia International Airport, Jordan’s tourism sector continues to mature. The kingdom has been hard hit by the ongoing political crisis in Egypt, as for years Jordan featured prominently on package tours that once included Egypt. Despite increased visa fees and the loss of low-cost UK carrier EasyJet’s Gatwick-Amman service also had a negative impact on the sector, Jordan’s tourism industry has shown positive growth in 2014.

According to the MoTA, the country has seen tourism revenues rise to JD2.5bn ($3.53bn) as of July 2014, up 10% on 2013 figures. As a whole, tourism makes up some 14% of GDP. Around 5.4m tourists visited Jordan in 2013, down from 6.3m in 2012. The ministry said the rise in tourism revenue was largely due to new campaigns aimed at attracting religious tourists from East Asia who visit the region as part of the annual hajj pilgrimage to Saudi Arabia. A total of 1.66m arrived in the first three quarter of 2014, a rise of 6.6% compared with the same period of 2013.

Hospitality

Jordan’s hotel market is continuing to expand, too. The sector is typified by smaller hotels that operate to a higher standard than other popular Middle Eastern destinations. Given the high cost of energy and water in Jordan, this model works best as opposed to other models in the region that feature larger hotels but enjoy subsidised utilities.

Medical Tourism

Jordan’s medical infrastructure remains one of the country’s most valuable tourism assets. With 2.45 physicians and 1.8 hospital beds per 1000 people, Jordan continues to attract foreign medical tourists. There are roughly 20,000 physicians, 22,000 nurses and 102 hospitals in the kingdom, including 59 hospitals operated by the private sector, according to the Jordan Hospitals Association (JHA).

The World Bank ranked Jordan as a top medical tourism destination in the Middle East and fifth in the world in 2012. Since the second half of 2011, 170,000 patients from across the world have come to Jordan for medical care. The kingdom has seen a spike in regional visitors arriving for medical treatment as well. The influx of regional citizens seeking safe, quality medical care in the past three years has raised medical tourism receipts in the kingdom to more than $1bn in 2012, up from $850m in 2011 (see analysis). “Jordan provides medical services for Arab countries such as Libya, Iraq, Yemen, Sudan, Algeria, Palestine and the Gulf states, and we are looking to expand these services to Europe, America and some African countries,” Zuhair Abu Faris, president of the JHA, told Jordan Times.

New International Players Stepping Up

Jordan’s tourism industry remains attractive to foreign investors given the kingdom’s continued interest in development and industrial cities. The opportunity to invest in new tourism projects is particularly appealing in areas around the Dead Sea and Gulf of Aqaba given the natural beauty of the landscape and ideal weather conditions. Indeed, the Dead Sea has long been one of the highlights in the kingdom’s tourism portfolio thanks to its wide array of attractions, ranging from religious sites to wellness and ecotourism, and all accessible within one hour’s drive from Amman.

To streamline development in the Dead Sea region, the government created the Dead Sea Development Zone, one of six special development zones established by King Abdullah II in 2008. The Development and Free Zones Commission (DFZC) oversees creation and management of these zones. The DFZC has attracted a slew of international hotel chains, in part thanks to incentives like a flat 5% corporate income tax rate, 100% foreign ownership and exemptions from Customs duties, sales tax, and social services payments. US-based Holiday Inn and Marriott, Germany’s Kempinski and Switzerland’s Movenpick operate hotels in the zone, along with the InterContinental Hotels Group’s Crowne Plaza Jordan Dead Sea Resort and Spa, which opened in 2011.

Egypt-based Amer Group is currently working on one of its biggest ventures in the region with the Porto Dead Sea project. Located on 800,000 sq metres of coastline on the Dead Sea, the project will include four luxury hotels, three malls and nearly 11,000 apartments. Prime Minister Abdullah Ensour was on hand to lay the cornerstone of the project in April 2014. The project will also include an on-site medical facility that incorporates the reported healing properties of the mineral-rich Dead Sea. It will also include special offerings for religious visitors, such as women-only swimming pools. The project will raise total hotel capacity in Jordan by nearly 25% once completed.

Industry Trends

Jordan’s tourism industry is looking to capitalise on a new national branding campaign that highlights the country’s religious sites, natural beauty and political stability as a standalone Middle Eastern holiday destination free from the troubles affecting much of the rest of the region. The private sector is looking to boost tourism products on offer in the kingdom, ranging from ecotourism to medical tourism. Public-private initiatives like the JTB are further attempting to raise the industry’s competitiveness by attracting more tourists through international branding efforts aimed at emerging markets for Jordanian tourism, like Central America, East Asia and Africa.

While business conferences and exhibitions have been a main facet of the country’s tourism projects in the past, Jordan is looking to hone its adventure and ecotourism products as a way of offering alternatives for Western tourists dissuaded from travelling to Lebanon or Egypt because of the well-documented unrest there. Jordan has long been an attractive destination for a variety of conferences and exhibitions given its central location and advanced infrastructure, as well as the presence of many multinational and international organisations within the country.

The push into adventure and ecotourism is a centrepiece in Jordan’s drive to attract younger tourists. With long-term prospects in mind, the industry is hoping that younger tourists that visit the kingdom for adventure, ecotourism and wellness retreats will cultivate a deep relationship with the country. While these tourists might not spend large amounts of money on their first trip, the country believes that they will fall in love with Jordan and return in the future with family and friends.

Spreading The Word

As part of the tourism branding overhaul, the government is partnering with the US Agency for International Development (USAID) to create a global online marketing campaign. Over the past eight years, USAID gave Jordan $362,727 for promotion in foreign markets. “Jordan has so much to offer in terms of tourism,” Stuart Jones, the former US ambassador to Jordan, said at the signing ceremony of a memorandum of understanding between USAID’s Economic Growth Through Sustainable Tourism project and JTB. “We want to help [tourists] find this experience and a great way to do it is through social media.”

Additional marketing efforts include the renovation of the online Jordan Travel Agent Academy to better assist North American travel agents when marketing Jordan in the US and Mexico. The marketing campaign will also redefine the kingdom’s social media strategy for marketing tourism. With substantial assistance from the IC, marketing campaigns highlighting Jordan’s eco-and adventure tourism will be carried on a variety of social media platforms including Facebook, Twitter, Instagram and the popular travel website Tripadvisor.

Key Markets

The events of the so-called Arab Spring led the Jordanian authorities to review their tourism strategy. Whereas the kingdom once often featured alongside Syria and Egypt on multi-destination package deals, this is no longer possible. Solutions to this loss of package tourism business have been identified in various new areas, including religious tourism. The kingdom is using recent visits by Pope Francis to establish itself as a premier location for Christian tourists from Europe and the US. Mount Nebo and the Mosaic Map in Madaba are popular with Christian tourists. The kingdom has also shifted focus to Muslim religious tourists, seeking to capitalise on Saudi Arabia’s high number of religious visitors. The returns are evident, especially with East Asian visitors. Tourists from Malaysia increased 42.2% in 2013 and there was a recorded rise of Pakistani (64.2%), Bangladeshi (48.8%) and Indian (13.5%) tourists visiting the kingdom in the beginning of 2014.

Given its many Muslim religious sites and proximity to Saudi Arabia, Jordan is ideally located to attract more Muslim religious tourists. Today the kingdom ranks eighth in the world in terms of Islamic-oriented tourism, according to a study produced by Singapore-based Crescentrating. From halal menu options to gender-segregated times for gymnasia and swimming pools, Jordan ranked competitively in the region.

Some 20% of all visitors to Jordan in 2013 arrived from Saudi Arabia, which shares a 728-km long border with the kingdom. Given instability in the region, especially in Egypt, those numbers will likely increase as pilgrim tourists visit Jordan to extend their hajj pilgrimage to include the kingdom’s wide variety of religious sites. Additionally, many Gulf countries have issued travelling advisory notes dissuading their citizens from travelling to Lebanon due to the political situation, making Jordan, with its relaxed atmosphere and established tourism infrastructure, a good alternative for Gulf residents looking to escape soaring temperatures in the summer.

Onto Africa

Another new market for Jordan’s tourism sector lies to the west in Africa. While the country’s national flag carrier Royal Jordanian (RJ) has made progress in reducing visa-processing times for African passport holders, it has also curtailed service to and from the continent. Last year, RJ ended its service to Accra, Ghana after a year operating the route. RJ remains in Africa though, with routes to Nigeria and Kenya that look to capitalise on Jordan’s medical tourism as an incentive for African passengers. Tourists from African countries accounted for a 4% increase in visitors coming to the kingdom for overnight stays between 2012 and 2013. Jordan aims to grow this market and entice more overnight visitors to stay for tours. Jordan’s Private Hospitals Association is also marketing medical services to African countries like Chad and Nigeria.

Visa Changes

In an effort to raise short-term capital, the Jordanian government recently increased the cost of a single-entry tourist visa. In April 2014 the cost for a single entry tourist visa doubled from JD20 ($28.25) to JD40 ($56.50) per visitor. While the visa changes affect individual travellers, those arriving in groups of five or more, staying more than three nights and using a national tour operator are exempt from paying a visa fee. The decision was no doubt a difficult one for the authorities, given that they are faced with a reduction in visitor numbers as a result of the regional unrest, and simultaneously significant budget shortfalls.

The government, however, has shelved a departure tax for tourists flying in and out of the country’s second-largest airport, King Hussein International Airport (KHIA) in Aqaba. Part of a plan to attract tourists from Egypt’s Sharm El Sheikh, the government is making operating costs for Aqaba cheaper for tour operators. A new 1500-metre expansion to the airport is helping update tourism infrastructure in the Red Sea port city. National flag carrier RJ, Turkish Airlines and a host of seasonal charter flights servicing destinations in northern Europe, currently serve KHIA. With flights from Europe to Egypt’s Sharm El Sheikh costing up to six times less than flights to Amman, relaxation of departure taxes should boost tourism to Jordan’s Red Sea coast and lure new carriers into servicing the airport.

New Hotels & Infrastructure

Hotel developers continue eying opportunities in Jordan’s tourism sector. In the realm of luxury travel alone, there are plans for a St Regis Hotel and W Hotel, both run by Starwood hotels, opening in Amman in 2016.

The pace of hotel construction, however, is shifting from the capital to Aqaba and the Dead Sea due to the myriad tourism prospects ranging from ecotourism to wellness retreats, as well as the ease of doing business thanks to special economic benefits for tourism projects. Dubai-based Arabtec Construction is leading the curve with $1.55bn contract to build a resort overlooking the Gulf of Aqaba, complete with a Star Trek theme park. The project also has support from Jordan’s Rubicon Group and the King Abdullah II Fund for Development is considering to invest. The resort will be located in the Aqaba Special Economic Zone (ASEZ), home to a host of private firms and shipping outlets with direct access to the Red Sea. Construction is expected to create 4000 jobs and begin in late 2014, and the project is due for completion in 2017. Arabtec is also working on the Saraya Aqaba luxury tourism project on the Red Sea. The project is further evidence of the government’s plan to raise public-private cooperation in expanding the tourism sector.

The government is moving ahead with another large project in the Wadi Araba region. One of the poorest areas of the country that extends from the Dead Sea to the Aqaba port, the project is under the jurisdiction of the Jordan Valley Authority (JVA) after a government decision to change oversight of the area. The ambitious initiative reflects the government’s aim to develop infrastructure in the kingdom with an eye for tourism and environmental sustainability. The first phase of the project, valued at $84.7m will include development of infrastructure, streets and incorporation of more than 8000 acres of agricultural land, JVA secretary-general Saad Abu Hammour told Gulf newspaper Al Shorfa.

Addressing one of the major challenges facing the tourism sector – availability of cheap energy – the project will include dam and water harvesting schemes, as well the creation of new power plants. Additional projects include establishment of several ecotourism offerings, like hiking trails and new hotels for ecotourism markets. The second phase of the project, which will be implemented over the next 20 years, will include industrial, agricultural and tourism-specific projects.

Outlook

With ideal year-round weather, political stability, a variety of religious tourism sites and new infrastructure like the recently renovated Queen Alia International Airport, the kingdom is well placed to consolidate its position on the Middle East tourism map. Challenges like visa fee increases may adversely affect the industry’s short-term growth, but continued development in the Dead Sea and Gulf of Aqaba hold the greatest promise to solidify medium-term expansion in the industry with the many religious, wellness and ecotourism attractions in those areas.

Recent initiatives will help Jordan overcome obstacles such as energy costs with private power plants and green energy initiatives that will aid medium-term growth. Meanwhile, global branding efforts aimed at marketing the diverse tourism infrastructure will ensure that tourism remains an economic growth engine.