The road to ruin

By Karen Thomas in London

Tourism officials from across the Arab world turned out in force at this year's World Travel Market in London, plying their countries' leisure attractions with not just a little bravado under the circumstances. As the death toll mounts in the Occupied Territories and with nothing on offer that might end the clashes between Israeli forces and stone-throwing Palestinian youths any time soon, the burning question for Arab tourism officials is how this will affect their business.
It is a question that few are willing to answer - at least in public. Nevertheless, initial horror and widespread sympathy for the plight of the Palestinians during the latest flare-up is giving way to hard-nosed worries about next year's tourism results.

Tourism in the Middle East has been dogged by the region's enduring - and largely undeserved - reputation for political instability and unrest. Government officials trumpet the fact that regional tourism growth of more than 17 percent in 1999 outstripped world average tourism growth of just 3.2 percent - but Middle East growth comes from a very low base.

Arab governments, almost universally committed to developing tourism, have had to contend with the fact that political unrest in one corner of the Middle East has a domino effect on regional tourism as a whole. The 1986 US bombing of Libya, the 1990 Iraqi invasion of Kuwait, the 1990-91 Gulf War, the 1997 massacre of 58 tourists by Islamic militants in Luxor and the 1998 kidnapping of 16 tourists in Yemen, where four tourists died in a heavy-handed government rescue bid, sparked a flurry of cancellations across the entire Middle East.

Crisis point. Few exhibitors at this year's show were prepared to discuss the likely effect of the crisis in Palestine on their own bookings next year. However, many admitted frankly that they are pessimistic. "During the Gulf War, when Israel threatened to bomb Damascus, we immediately had 3,000 cancellations - and these were not Americans, they were mainly Spanish travellers," says Bashar Kabbani, the sales and marketing director of the Sheraton Damascus. "This time, we are just waiting and hoping. But it is very obvious that events in Palestine will affect us all."

For Palestinian tourism officials, things are already at crisis point. The delegation nearly didn't make it out of the Palestinian-controlled areas to the show. Gaza International Airport is all but closed and Israeli border guards forced the officials leave their cars at the border as they made their way to Tel Aviv. "We had to walk for several kilometers - even the minister - with all our cases and brochures," says Majed Ishaq, the spokesman for Palestine's ministry of tourism and antiquities.

In November, Israeli rockets blasted the Oasis Casino, near Jericho, causing more than $500,000 worth of damage. The luxury hotel complex, in which the Palestinian Authority holds a $60 million equity stake, had become one of the fledgling Palestinian nation's major revenue spinners since it opened two years ago, attracting up to 2,500 gamblers a night, most from Israel where gambling is illegal. Palestinians were barred from the casino.

Spiralling violence since October has forced the Palestinian authorities to bring the Bethlehem 2000 millennium celebrations to an untimely end, cancelling celebrations scheduled to mark the end of Ramadan, the start of Christmas and Easter 2001. Tourism officials have abandoned all hope of matching the last year's 1 million tourists in the year to come, which will almost certainly reverse the rise in Palestinian room occupancy rates from 29 percent in 1997 to 69 percent in 1999.

Palestinians have borne the brunt of the breakdown in relations with Israel, not only in terms of casualties, but also economically. According to figures from the United Nations, the conflict is costing Palestine some $8 million per lost working day, in lost wages, agricultural exports, trade and production.
Border closures have prevented Palestinians employed in Israel from reporting to work, and unemployment had risen from 11 percent to nearly 30 percent within the first month. Less than 10 percent of tourism revenue in Israel and the Occupied Territories falls into Palestinian hands, according to the ministry of tourism and antiquities. When asked about future investment in tourism, Ishaq answered with a hollow laugh.
The flare-up could not come at a worse time for Yemen - where the 1998 shoot-out halved the number of foreign visitors - which is desperate to generate new revenue from tourism, having set up the Yemen tourism promotion board (YTPB) in 1998. "Our five-year plan states that we must prepare for tourism," says Mohamed Qalfah, the deputy-general of YTPB. "The government has put tourism as a priority sector, along with oil, mining and fisheries, and has invested in the infrastructure needed for tourism growth."

However, just as the outbreak of civil war saw the number of visitors to Algeria slump from nearly 773,000 in 1991 to 572,000 by 1993, the attack on tourists in Yemen halved visitor numbers, which fell from more than 100,000 in 1998 to 50,000 in 1999. To add to Yemen's woes, the grand opening for the site billed as Yemen's answer to the Valley of the Kings took place in November 2000, just weeks after an Islamist attack on a US warship at the port of Aden killed 63 US soldiers.

Chain reaction. It has taken archaeologists years to excavate the 3,000-year-old Mahram Balqis, the Temple of the Queen of Sheba near Marib. Given the way that events in one part of the Middle East spark a chain reaction across the region, Yemen's determination to attract significant tourist numbers seems stubborn at best. Qalfah maintains that Yemen will see a 20 percent increase in tourist arrivals within five years, and that the private sector will drive this growth. Certainly, a respectable number of new hotels have opened in the last year, including the Holiday Inn, Plaza Suites, Gold Mohur and Nice Plaza.

Egyptian tourism officials have watched events unfolding in Palestine with mounting horror. It has taken Egypt three years to recover from the fall-out from the Luxor massacre - and now, as the government prepares to invest $30 billion in new tourism ventures to 2017, the current unrest comes as a major blow. Not least, the troubles meant that plans to withdraw the military convoys assigned to tourist buses in the wake of the Luxor massacres would not, as planned, be withdrawn by the end of 2000.
Officials from Sheraton's properties in Egypt were out in force at the World Travel Market, anxious to promote its destinations at a time when parent company Starwood Hotels has embarked on an unprecedented expansion drive in the country. More than 4 million tourists visited Egypt in 2000 and projections drawn up earlier in the year suggest that this will rise to 33 million by 2017. Multinational hotels, unlike most tourists, take a long-term view - and Starwood anticipates that Egypt needs nearly 500,000 new hotel rooms to avert a shortage. The group is to expand its properties in Egypt from nine to 20 by 2003, says Starwood spokeswoman Maha Saad, including Marsa Mattrouh near Alexandria and Taba Heights in the Sinai desert.

Although Egypt's Sheraton group suffered no significant cancellations at the time of writing, Saad admitted that it was watching the situation in Palestine with caution. "We had a brilliant year in 2000," she says. "We are just watching, hoping and praying that next year will be the same."