JORDAN TOURISM TAKES ANOTHER SHORT-TERM HIT

UNCLAS SECTION 01 OF 02 AMMAN 002694

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: ECON EFIN JO
SUBJECT: JORDAN TOURISM TAKES ANOTHER SHORT-TERM HIT


1. (sbu) SUMMARY. The war in Iraq was a new blow to the
Jordanian tourism industry, which was already reeling from
the fallout of the Intifada and September 11. With the war's
impact reflected in cancellations that began in January, the
Jordanian tourist industry has basically written off the rest
of 2003. They are looking increasingly to developing
tourism within the region and are seeking large scale
government financial assistance. Tourism promoters and
hoteliers are full of big ideas for developing Jordan's
excellent tourism potential, but they bemoan what they see as
a lack of interest by the government. End Summary.

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Tourism Board: Cancellations Began in January
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2. (sbu) Jordan Tourism Board (JTB) Executive Director
Marwan Khoury told econoff April 20 that the effects of the
war in Iraq started being felt in Jordan's toursim sector in
January, when uncertainty over the timing of the war led to a
reduction in air travel and a cancellation in bookings. By
March, he said, virtually no foreign visitors were in the
country other than journalists and aid officials. Since
nearly all of these stayed in "five star" hotels in Amman,
these hotels have been able to hang on, but the rest have
been critically impacted by the loss of visitor traffic.
Apart from occasional weekend travel by Jordanians to the
Dead Sea and Aqaba, tourist spots throughout Jordan have seen
"zero" travelers, with Petra hit particularly hard. Several
smaller hotels in Petra have closed, at least temporarily, as
has the five star Movenpick Nabatean Castle Hotel. An
unknown number of tour guides throughout the country have
lost work, and a few shops and stalls in Petra have also
closed or gone out of business. The direct contribution of
tourism to GDP, which at one time was as high as 12%, has
dropped to 8.5% or lower, Khoury said. The indirect losses
are much higher, he thought.


3. (sbu) Khoury said the JTB is continuing efforts begun
last year to shift its focus to working aggressively on
developing tourism from within the region. (USAID has been
helping JTB redesign its strategy.) He said this focus was a
bit successful, as Jordan had drawn tourists from Lebanon and
the Gulf, and had seen an increase in tourism the last three
months of 2002 over the same period in 2001. He said this
campaign will continue, with regional efforts directed toward
developing summer camps in conjunction with the Jordanian
Hotel Association, and will have brochures promoting the
camps ready for distribution throughout the Gulf very soon.
He said he had another idea: to turn the busy commercial area
of Sweifieh in Amman into a pedestrian-only shopping area,
with cafes, outdoor music, etc. He said he had received a
positive response to this idea from the Ministry of Tourism,
but nothing from the Amman municipality.


4. (sbu) In terms of seeking new markets outside the
region, Khoury said that JTB had opened a new office in
Russia, as that country had recently been added to the list
of countries whose citizens are able to obtain entry visas at
the Amman airport. He is planning to attend a trade show in
Moscow in May. He added that the JTB is planning to do a
market research study on the Eastern European market.


5. (sbu) When asked about contacts with Israeli tourism
officials and/or entities, he said he used to have "a quite
fruitful" relationship with the GOI Ministry of Tourism, but
said that "ever since Likud came to power" there has been no
cooperation despite attempts by the JTB to initiate dialogue.
Regarding possible links with Iraq, Khoury said he was
looking forward to establishing some kind of relationship
once a formal tourism entity was established. He said that
to the best of his knowledge, Iraq had no tourist board or
ministry in recent memory, because "they never believed in
tourism."


6. (sbu) Khoury closed by saying that the lifting of the
U.S. and other travel advisories for Jordan would be key to
spurring the return of U.S. and European visitors. He noted
that the Netherlands and the UK had lifted their travel
advisories (note: they still have public notices advising
vigilance and, in the case of the UK a stiff warning on the
possibility of terrorism.)

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Hotel Association: Down in the Dumps
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7. (sbu) Michael Nazzal, President of the Jordan Hotel
Association, echoed Khoury's view regarding the travel
warning. He said the removal of the warning would have a
great effect, because people would see it "crawling across
their tv screens as they watch CNN" and would think that it
was safe to come to Jordan. Nazzal said hotels have more or
less "written off" European tourists for the year. He said
instead they'll focus on the summer camp program in which
children from the region will stay at a camp, similar to Boy
Scout camps, he said, but with an Islamic twist. The kids'
families, of course, will stay in the hotels at a reduced
rate. Brochures advertising the camps will be ready by May 1.


8. (sbu) Nazzal expressed consternation at Jordan's
inability, as a country, to sell itself internationally as a
tourist destination. He said that if one looks at Lebanon,
for example, even regionally, on LBC and other Arab satellite
networks, one "sees a beautiful country, with a vibrant,
exciting capital." Nazzal said that one wouldn't see that
sort of thing on Jordanian TV, because it's "too weak" and
not interested in promoting Jordan. He added that the
Ministry of Tourism did not have "a quality staff that was up
to the job" of helping the JHA and others.


10. (sbu) As to the compensation arrangement the JHA has
worked out with the government, Nazzal said it's based on a
formula that projects average revenue based on room occupancy
rates. Actual revenue is subtracted from this figure, and
the government makes up the difference. Nazzal was not sure
how the government was applying this approach to non-hotel
tourism providers who are suffering as well.


12. (sbu) Nazzal came back to the idea he previosly shared
regarding his proposal to turn Petra into a Davos-type resort
focused on fashion and the arts. He has drawn up a proposal
for this "Petra Club," and has forwarded it to the MOT, where
he's sure it will languish. Nonetheless, it is an
interesting proposal, one that would bring artists from all
over the country to live and work in Petra. For the fashion
piece, it includes the construction of a convention center
with goal to hosting annual fashion shows, seminars, and the
like.
BERRY