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Jordan to protect a bright future in a troubled environment

During a troublesome year when most hotel markets in the Middle East struggled to cope with deteriorating demand, Jordan excelled and reversed the effects of the downturn a year earlier. A polished tourism product, first-rate infrastructure and excellent campaigning by authorities made sure this regional gem continued to shine.

Economy and accessibility

According to the Jordan Tourism Board JTB, indicators for January were encouraging, which ushered a 7% increase in revenues over the same month of 2010, and a 6.1% increase in number of visitors. Although these figures are positive, JTB expects regional developments to impact the sector’s performance in the coming few months. Negative reporting and misconception have mistakenly put Jordan in the same basket of turbulent countries. JTB is now heavily engaged in an effort to correct media misconceptions created by coverage of regional unrest – correcting false impressions in the west which were driven by how the region was being reported. Indeed, Jordan has a long-standing reputation as a very safe, secure, and hospitable destination.Jordan’s economy has been performing very well over the last 10 years, with real GDP growth year-on-year. The global economic crisis did slow the situation down in 2008 and 2009, as global business demand declined and domestic purchasing power reduced while inflation rose sharply. Nevertheless conditions were a lot more resilient compared to Europe and North America and have since stabilised in line with global recovery. In terms of transport infrastructure, Jordan is perfectly set up as a tourist destination. This includes two international airports, Amman Queen Alia International Airport (20 km from Amman) and Aqaba King Hussein International Airport, as well as the Port of Aqaba with its cargo capabilities and a separate passenger terminal. Meanwhile, road infrastructure is ideal. All major tourist sites are in easy reach from each other. This means excellent road connections for tour buses, taxis and private cars, making packaged tours well set up.There is also very good access to neighbouring countries Egypt, Israel, Lebanon, Syria, as well as Palestine and Iraq. Again, this offers possibilities for day tours and joint packages, as well as individual business and MICE prospects.Tourism in Jordan, diversified and polishedTourism is very important to Jordan’s economy, contributing between 10% and 12% to Gross National Product. In general, Jordan’s tourism industry has been consistently improving over the last decade, in terms of arrivals, average length-of-stay and tourism receipts, fuelled by inter-regional travel and of course additional promotion of the country’s attractions, namely Petra, which was named one of the new 7 wonders of the world. Jordan’s other rich cultural attractions, including Amman, Jordan Valley and the Dead Sea, the River Jordan, Jerash, Mount Nebo, Wadi Rum, Aqaba and the Red Sea are also main attractions. The Dead Sea will take centre stage in 2011 as the largest natural spa and lowest point on earth when it competes for a position amongst the world’s 7 natural wonders. The Official New7Wonders of Nature campaign started in 2007 with more than 440 locations in more than 220 countries. The qualification race put the Dead Sea on the list of 28 official finalist candidates, from which the 7 wonders will be chosen by an estimated 1 billion votes. The official declaration of the New7Wonders of Nature will be on the 11th of November 2011.The Dead Sea will also be under the spotlight during 2011 with a fascinating search for the lost cities of Sodom and Gomorrah believed to be buried under the waters of the Dead Sea. The search, by a Russian television crew, is based on NASA satellite pictures, which experts say reveal a terrain uncharacteristic of sea beds. The suspected location on the Jordanian side of the Dead Sea will be subject to extensive probing with the use of sophisticated equipment. If the lost cities were found, it would be one of the most important international archaeological discoveries of all time. Finally, MICE proposes good potential, in Amman and at hotels and conference facilities near the major attractions. As well as many major events throughout the year. Jordan is also the main transit country for goods and services to Palestinian territories and Iraq, including private business and NGO missions.Tourism reboundIn 2010, there were over 8.2 million arrivals and 4.6 million room-nights, an increase of over 16% and 20% respectively over 2009. This was driven by an increase in international arrivals: 42% from South Asia, 25% from East Asia and the Pacific, and 22% from Europe. Other markets also recorded healthy increases. The year also saw a 17% growth in tourism revenues compared to 2009. “2010 was an exceptional year for tourism in Jordan. We are very pleased with the figures from 2010 and are hoping that 2011 will generate even more positive numbers,” Managing Director, Jordan Tourism Board (JTB), Nayef Fayez told HTR. Approximately 47% of overnight stays were generated from Arab countries, 26% from Jordanians residing abroad, 16% from Europe and 5% from the Americas.European travellers tend to visit Jordan outside the summer season, mainly between March and May, as well as September and October. Meanwhile, Arab countries and Jordanians prefer the summer months June to August. “Our targets for the upcoming years are to maintain and develop our current mature markets, such as the GCC, North America, UK, Austria, Italy, France, Ukraine, Germany, Spain, Russia, and Benelux – and to develop our most recent market, India, as well as to break into current potential markets like China, South America and Scandinavian countries,” added Fayez. The year’s figures also indicated that the historical sites across the Kingdom witnessed a 31% increase in direct revenues compared to the year before. Wadi Rum recorded the highest growth in visitors, with a 60.7% rise. Some 274,837 tourists visited the site in 2010 compared with 171,047 in 2009. The mosaic city of Madaba came in second with a 44.8% growth, registering 399,057 visitors in 2010, compared with 275,567 in 2009. Petra witnessed the highest number of overall visitors with 962,784 followed by Jerash with 412,649.According to Fayez, credit for the increase in revenues and tourist number goes to the promotions and campaigns organised last year. “JTB worked proactively to enhance Jordan’s tourism image worldwide with traditional and alternative forms of media. Whatever the time of year, it is always a perfect time to visit Jordan. JTB is currently expanding our eMarketing efforts across several platforms including social networking sites like Facebook, Twitter, Trip Advisor, Flickr, and our VisitJordan blog. We are actively involved in receiving and responding to feedback on these sites, as well as interacting with current and future visitors to Jordan,” continued Fayez. “We also recently launched the Visit Jordan Academy, an eLearning programme for Travel Agents to get certified as Jordan Experts, and have completely redesigned our Jordan calendar of events, so travellers to Jordan can plan their trips around events and easily see what is going on in whatever part of the country they are visiting.” “Another important sector we are focusing on is MICE. Business Tourism is rapidly growing worldwide as an important sector and we in Jordan understand this and are working to attract more business travellers to our kingdom. JTB founded a unit recently dedicated to understanding the needs of MICE and work to alleviate the services offered by incentive houses and MICE suppliers here in Jordan.” Tourism is now poised to grow, as a new open skies policy with Europe sees the introduction of more full fledged and low cost carriers – the aviation industry was previously monopolised by national carrier Royal Jordanian. This will have a tremendous affect on tourism, creating new demand and introducing new tourism markets, i.e. budget travellers, short break holidays, Central and Eastern Europe. “The new service provided by easyJet will enable a wider range of tourists to come to Jordan on the low cost carrier, as well as increase spending in the country on fun activities and souvenirs as opposed to spending more money on air tickets. We also hope that easyJet will attract more low cost carriers to Jordan from other destination is Europe and the region,” stated Fayez. Hotel market conditions and supplyCurrently there is over 200 classified hotels and 17,000 rooms. In addition, there are 7,600 aparthotel rooms and 1,700 unclassified rooms. Over the next five years, hotel supply in Jordan is expected to increase by 30% and reach over 30,000 rooms. This development drive is certainly testament to the country’s growth potential, as interest from leading hotel groups continues to remain strong. With this comes a new hotel classification system, implemented in early 2010 by the ministry of tourism in order to harmonise stock according to international standards. With almost 6,500 rooms and 40% share of total supply, the upscale segment is easily the largest in Jordan. These properties are mainly made up of international chains and larger properties, i.e. average room number per property is higher. The economy segment is next largest with almost 3,200 rooms and 20% share.Most of these are unbranded independent properties. The midscale segment has almost 5,000 and 17% share. Upscale hotels in Jordan also have the largest share of bednights at around 37%, followed by midscale with around 19% and then economy at 15%. No doubt the large share of international tourist paying expensive air tickets are also opting for better quality accommodation. Most are also on ready-made tour packages – large and small groups/FITs. However, this share is expected to change somewhat over the next few years with the introduction of low cost European carriers. This will change the type of visitor, with more budget conscious travellers – individual travellers (business and leisure) purchasing lower priced tickets and opting for lower priced accommodation, such as in midscale and economy categories. Indeed, leading hotel groups are already preparing for this new tourism rush.Accor recently introduced their economy brand Ibis (which is actually closer to being a midscale property in terms of quality), and InterContinental Hotel Group (IHG) is preparing to launch Holiday Inn Express. Hotel groups already present in the market include Four Seasons, Kempinski, Accor, IHG, Moevenpick, Hyatt, Starwood, Marriott, Radisson, Wyndham and Golden Tulip. “Jordan has a lot of room for expansion, especially in the 5-star hotel sector and general tourism projects,” says Fayez, pointing to the many developments already taking place in Aqaba, the Dead Sea, Amman and Petra as examples. Since Jordan appeals to a variety of travellers, we also recognise the need for building and expanding the 2- and 3- star hotel segment, especially in the northern parts of Jordan,” he added.Prominent hotel developmentsInterContinental Hotels & Resorts is to develop a 236-room €50 million luxury resort, on the shores of the Jordanian Dead Sea, set to open in late 2012. "We are delighted to be developing InterContinental Resort Dead Sea in partnership with Sun Days International for Tourism, this is a significant project for us and we are thrilled to have been able to secure such a great location on the shores of the stunning Dead Sea," said John Bamsey, Chief Operating Officer, IHG, Middle East & Africa. "We believe that this new property will continue to strengthen our position across the region and are committed to further establishing our presence in this rapidly developing market." IHG already has a strong presence across Jordan with five properties and 1,509 rooms. There are an additional three properties with 890 rooms in the development pipeline, furthering the company's growth.Starwood Hotels & Resorts Worldwide will debut its W Hotel in Amman in conjunction with Saraya Holdings, scheduled to open in 2011. "As the Middle East continues to develop as a business and leisure destination, W is proud to offer a new kind of experience for visitors and the local community while providing our global guests with access to one of the most fascinating cities in the Middle East,” commented Ross Klein, President, Starwood Luxury Brands Group. W Amman will have 280 rooms, as well as additional luxury residences. The group also plans to debut the first St Regis hotel in Jordan.Owned by Al Maabar Abdoun Real Estate Development Company, a wholly owned subsidiary of Al Maabar International Investments Abu Dhabi, The St. Regis Amman and The Residences at St. Regis Amman are scheduled to open in 2014. St. Regis Amman will feature 270 rooms, including 91 suites, four restaurants, a café, destination bar, pool and pool bar, fitness centre, signature spa and over 2,800 m² of meeting and event space. The mixed-use property will also include approximately 80 branded residences featuring two-, three-, four- and five-bedrooms, a dedicated lobby, pool, fitness centre and lounge, as well as exclusive boutiques that will feature prominent international brands. This hotel project will extend Starwood’s portfolio in Jordan, where the company currently operates Sheraton and Le Méridien hotels and has three additional properties in the pipeline, including Westin Aqaba Harbour Resort & Spa and The Luxury Collection Al Manara Al Aqaba, both scheduled to open in 2012. The international arm of Hilton Hotels Corporation signed an agreement with Aqaba Gate for Hotels and Tourism Projects LLC to manage Hilton Aqaba. The hotel is part of a landmark development in the city of Aqaba. "We are thrilled to have signed our second property in Jordan – a key development market for us in our global pipeline,” stated Koos Klein, President, Hilton Hotels Middle East and Asia Pacific.The hotel, located in the Tala Bay Resort complex on the southern beach of the City of Aqaba, has 346 guest rooms, a variety of restaurants, bars, multipurpose function, meeting and conference rooms, as well as recreational facilities. The property will complement Jordan's existing property, the 590-room Hilton Amman – Jordan Gate. This property is located on a hill west of central Amman, and occupies the highest point in the city, making it a new landmark.Hotel demand: best performing market in the Middle East Jordan proved to be one of the most resilient tourism markets in the Middle East and North African region in 2010. By year’s end, average RevPAR reached €67, representing a growth of 8.2% compared to 2009. This was mainly driven by a 6.2 point increase in demand with average Occupancy Rate (OR) reaching just over 60%. The last three months of the year posted particularly exceptional results, as the global economy recovered and increased demand. During this period, OR in Jordan grew by 6.5 points and Average Daily Rate (ADR) by 5.2%, leading to over 17% RevPAR growth. As a destination, Jordan is quite diversified and lot more focused on mass tourism, able to offer very attractive packaged deals. This proved to be a decisive factor for foreign travellers during the economic hardships in 2009 and 2010, opting to travel somewhere more affordable and reasonably close to home. Jordan is also quite successful with intraregional travel, i.e. the Arab market, for similar reasons and cultural similarities. Furthermore, hotels in Jordan have greater domestic input, particularly relevant for business segments, as well as from neighbouring countries and NGO-driven demand into Iraq and Palestine. Clientele segments differ between hotels in Amman and those at major attractions, i.e. Amman has a lot more individual and corporate business, while tourist sites are more leisure group and FIT orientated. Hotels with larger conference facilities (or near conference centres) also do quite well with MICE business. Finally, leisure trips are quite low in Jordan, however this should surely change with the introduction of new low cost flight connections to Europe. Jordan's tourism sector is looking forward to 2011 as another record year that should outperform 2010. However, expectations are cautious since the fallout of the crises in Tunisia, Egypt and Libya has left some impact on tourism in the region.

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