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North Africa: Tourism a victim of terrorism

While the call for increased vigilance due to terrorist threats torments North African hoteliers, hospitality figures collected by MKG Hospitality show a slump in the activity of the sector in Algeria, Morocco and Tunisia since the kidnapping & murder of Hervé Gourdel last month.

With the approach of the All Saints Day vacation in Europe, North African tourism professionals worry about the decrease in reservations by Western clients. The murder of Hervé Gourdel and the call for vigilance by European Foreign Offices made tourists shy away, whereas this period is traditionally propitious for travel to these destinations. Data collected by MKG Hospitality at the end of September and the beginning of October, show that concerns of hoteliers in the region are not unfounded.

Algeria was the first to be affected by the drop in tourist activity: the drop in turnover per available room reached 4% in September, due to the 1.6 point drop in occupancy rate and 1.8 point drop in average prices.

In Morocco, the impact of events on the hotel industry already resulted in a drop in performances in the first days of September. The absence of European clients could be felt from September 24, corresponding to the time of publication of the security warnings from Foreign Offices, notably in France following the announcement of the assassination of Hervé Gourdel. The drop continued since then, continuing into the first two weeks of October. On the first 13 days of the month, the revenue per available room for Moroccan hoteliers thus dropped by 10.5%, due to the 2.1% drop in average daily rates and most importantly the 5.4 point drop in occupancy rate.

Morocco's hotels nonetheless succeeded in maintaining growth in results in September, despite the strong decrease in recent days, with 7.5% growth in turnover per available room at properties. Inversely, the change in results for Algeria's hotels, which were directly affected by the terrorist attacks, is already negative on the period.

In Tunisia, recent events significantly slowed the strong recovery of tourist activity that had been observed since the beginning of the year. Hoteliers nonetheless succeeded in maintaining a positive year-on-year evolution in their results, compared with catastrophic levels of activity in 2013. After posting an increase by 11.1% in their revenue per available room in September, growth continues in the first two weeks of October. This growth was nonetheless driven more by average daily rates than by occupancy, whereas occupancy rates are struggling to regain a positive trend. It is important to observe that occupancy rates in 2013 were still very low due to the instability of the country's political situation.

Georges Panayotis, president and founder of MKG Group, stated: "It is unfortunately not surprising to see a tragic event upset the tourism business in the Maghreb. It is all the more damaging since tourism, a key sector in the economy of these countries, had been recovering in the beginning of 2014."



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