Tourism: a ‘win-win’ sector to promote recovery & employment in the Middle East & North Africa

Tourism: a ‘win-win’ sector to promote recovery & employment in the Middle East & North Africa

From the pyramids showcasing the world’s first great civilization, to the sandy white beaches of the southern Mediterranean, religious sites and pristine eco-reserves, the Middle East and North Africa (MENA) region is chock full of unique tourist attractions. Tourism in MENA does not only satisfy the hedonistic wishes of vacationers – it is an important sector for economic development and job creation. In 2011 the sector directly contributed an estimated $107.3 billion to regional GDP (4.5% of total) – and accounted for 4.5 million jobs (6.75% of total employment).

Tourism in MENA, however, has taken a sharp hit as a consequence of the Arab Spring and ongoing economic instability in Europe. Tourist arrivals declined by 9% to 72 million in 2011, a decrease of 6.6 million visitors. In Egypt and Tunisia, tourism revenues were down by 30 and 45% respectively, with hotel, cruises, and tours operating at mere fractions of their 2010 levels. Ongoing social protests and negative media headlines have done little to reverse this trend.

For MENA economies facing high unemployment, and sporadic civil unrest, strategic reform in the tourism sector are needed now. Why? It has the double benefit of promoting recovery and addressing competitiveness issues that have prevented the sector from reaching its full development and job creation potential.

A shift in strategy may be a good place to start. Tourism strategies in MENA must invest in the full spectrum of ecological, historical, and religious assets the region has to offer. For most MENA countries, this implies shifting from the “sun, sand, and sea” approach that has worked in the past towards experiences that weave beaches with historical sites, culinary and artistic offerings, and natural wonders (parks and reserves). Integrating diverse tourist offerings will encourage visitors to stay longer, return more often, and purchase goods and services from local communities rather than lining the pockets of big tourism operators.

Although varying widely across the region, infrastructure deficiencies continue to hamper tourism growth. Transport infrastructure, maintenance of tourist sites, hygiene levels, and security still prevent tourists from traveling to MENA. The region could benefit from improved public management of tourist sites. Targeted government investment can yield handsome dividends since many tourist facilities become self-sustainable once established – for example desert tourism sites.

In many countries in the region the government dominates tourism strategy and operations. Tour operators are often politically connected, unresponsive to what discerning travelers actually want, and marred by inefficiencies. Further opening the sector and promoting competitiveness could help improve tourist services. For example, allowing entrepreneurs to open small pensions would go a long way in spreading tourism revenues more broadly and improving accommodation options – particularly in remote areas. Involving the private sector in strategic decisions about the sector is also key. A good example of the government stepping out of the way is in Jordan, where the government has accredited the Royal Society for the Conservation of Nature – a non-profit organization – to developing a strategy for and managing the country’s ecological sights to much success — and with strong linkages to local communities.

Given the variety of jobs tourism creates across skills levels – from facilities maintenance to tourist guides, hotel personnel, architects, and city planners – and the sector’s ability to promote economic development in rural communities, the sector is well placed to employ youth and women in the MENA region. However, there remain challenges as in much of the region there is a preference for women to stay at home, and in some communities a cultural bias against working in the services sector. Governments will need to provide women and youth with the education and training required to take advantage of employment opportunities in the tourism sector, particularly in rural areas, where literacy and formal education may be low. The good news, however, is that globally, FIFTY percent of those employed in tourism are young people – offering wonderful employment opportunities for Arab youth.

While challenges facing the tourism sector are many, reforms offer a unique set of winning propositions, including job creation, community empowerment, and regional integration during challenging economic and political times.

By Peter McConaghy

Peter works as a financial sector analyst (JPA) within MENA FPD where he steers the unit’s financial inclusion work and provides analytical support for senior staff members. Prior to joining the Bank, Peter worked as a business development officer at the First MicroFinanceBank in Dushanbe Tajikistan and was the lead researcher and contributing author on the New Microfinance Handbook (World Bank Publications; Dec. 2012). Peter holds an M.A. in international economics and international development from Johns Hopkins SAIS. A native of Canada, Peter enjoys traveling, learning new languages, and fitness.