VZCZCXYZ0003
RR RUEHWEB

DE RUEHAM #4190/01 2891136
ZNR UUUUU ZZH
R 161136Z OCT 07
FM AMEMBASSY AMMAN
TO RUEHC/SECSTATE WASHDC 0585
INFO RUEHGB/AMEMBASSY BAGHDAD 5500
RUEHLB/AMEMBASSY BEIRUT 2720
RUEHEG/AMEMBASSY CAIRO 3393
RUEHDM/AMEMBASSY DAMASCUS 3708
RUEHJM/AMCONSUL JERUSALEM 4654
RUEHRH/AMEMBASSY RIYADH 1837
RUEHTV/AMEMBASSY TEL AVIV 0810
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHDC

UNCLAS AMMAN 004190 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
STATE FOR NEA/ELA 
STATE PASS USAID 
 
E.O. 12958: N/A 
TAGS: EAID ECON EIND JO
SUBJECT: RESTAURANT INDUSTRY GROWING IN JORDAN 
 
REF:  AMMAN 4074 
 
¶1. (SBU) Summary: Revenues from Jordan's restaurant industry have 
grown 42 percent since 2006, and the total number of restaurants has 
increased by 18 percent.  The restaurant sector currently employs 
about 11,000 people in Jordan, and government officials and 
restaurant owners believe the industry will continue to expand. 
Restaurant industry representatives are concerned with taxes, 
tourism laws, and inflation.  The sector has also recently been 
impacted by disputes over Ramadan restaurant laws, but 
opportunities, especially for American franchises, remain.  End 
Summary. 
 
Super-Sizing: 42 Percent Sales Growth 
-------------------------------------- 
 
¶2. (SBU) Amer Qub'a, CEO of the Jordan Restaurant Association (JRA), 
reported to EconOff that Jordan saw daily restaurant industry 
revenues grow from $808,000 in 2006 to $1,150,000 during the first 
eight months of 2007.  JRA projects annual revenue for 2007 will be 
$418 million, up from $295 million in 2006.  This growth reflects an 
increase in sales at each restaurant, as well as an increase in the 
total number of restaurants. 
 
¶3. (SBU) Jordan currently has 608 licensed restaurants compared to 
397 in 2002, not including sandwich shops that serve shawarma, 
falafel, hummus and other traditional low-budget Arab foods.  With 
the increase in restaurants, the frequency of dining-out has also 
tripled in the last three years according to Raed Al Zaghal, the 
Assistant General Manager at Armoush Tourist Investments (ATI) which 
owns all the local McDonald's.  A recent survey commissioned by ATI 
found that 88 percent of Jordanians had eaten out in the last four 
weeks, and 70 percent had eaten at a fast-food restaurant.  The 
study found, however, that sandwich shops are the most frequently 
visited type of restaurant in Jordan. 
 
¶4. (SBU) Zaghal opined that the restaurant industry, both in sales 
and number of restaurants, would continue growing but at a slower 
pace.  He said that while Jordan can support more fast food 
restaurants, he did not expect large growth in the number of 
restaurants in other categories.  Randy Ahmad, Marketing Manager at 
Americana Company, which holds the Jordanian franchise rights to 
KFC, Pizza Hut and other American restaurant chains, indicated that 
Americana will open an additional five restaurants in the next few 
months.  He said Americana expects to continue expanding the number 
of restaurants and franchises, including a possible Krispy Kreme 
store, and is eager to expand into mall locations.  Both Zaghal and 
Ahmad agreed that the greatest growth opportunity for fast food 
restaurants in Jordan is in lower-middle income areas, which have 
the largest number of potential customers. 
 
¶5. (SBU) Another potential growth area is catering, particularly for 
hotels.  Jan Heesbeen, Marriott's Jordan Country Director for Sales 
and Marketing, indicated that Marriott, Intercontinental, and Hyatt 
dominate the catering business throughout Jordan, inside and outside 
of hotels.  Half of Marriott's Jordanian food and beverage (F&B) 
revenues come from catering.  Yasmeen El Ajou, Grand Hyatt Amman's 
Marketing Communications Executive, predicted catering growth to 
continue as Jordan expands its convention and conference business. 
Heesbeen added that Jordan needs a certification process for event 
planners to improve the quality and professionalism of catering. 
 
Restaurants Are an Important Employer 
------------------------------------- 
 
¶6. (U) Zaid Goussous, President of JRA and owner of several 
restaurants himself, noted that Jordanian restaurants employ around 
11,000 staff members, which he said is second only to hotels in 
terms of numbers of tourism-related jobs.  Zaghal highlighted that 
100 percent of McDonald's 700 employees in Jordan are Jordanian, 
rather than foreigners.  He said that 60 percent work part-time, 
noting that McDonald's was the first company in Jordan to offer 
part-time work in the formal economy. 
 
Relationship to Tourism 
------------------------ 
 
¶7. (U) Zaghal and Ahmad said that their restaurant sales spike 
thirty percent in the summer because of Gulf tourists (Reftel). 
Goussous thought that meals for tour groups to Jordan could be 
better planned and prepared in order to develop Jordan's tourism 
sector.  In particular, tourist restaurants need to emphasize 
cleanliness, menu variety, atmosphere, and employee appearance. 
 
Industry Concerns 
----------------- 
 
¶8. (U) In recent discussions with EconOff, restaurant owners and 
managers identified several concerns about their sector including 
taxes, tourism laws, and inflation.  JRA's Goussous said that since 
restaurants pay 16 percent sales tax, their role in Jordan's economy 
should not be marginalized.  He said restaurants are particularly 
impacted by the 300 percent duty on alcohol, which makes wine more 
expensive in Jordan than in almost any other tourist destination. 
His JRA colleague Qub'a expressed concerns about the new draft 
tourism law, which he felt discriminated against restaurants 
relative to other tourism industry players.  Minister of Tourism 
Osama al-Dabbas said that the current tourism law dates to 1988, and 
while the sector has grown every year, the law has not kept pace. 
He thought that the new law would clarify some misinterpretations 
and make licensing easier. 
 
¶9. (SBU) Zaghal spoke at length about inflation in Jordan.  He said 
the rapid growth in real estate costs are impacting McDonald's 
expansion plans.  He added that the real estate market in Jordan is 
changing as increasing amounts of land are owned by large companies. 
 He said he recently gave across-the-board salary increases to his 
employees, but they do not match increases in housing, food and 
school costs. 
 
Ramadan Restaurant Raids 
------------------------ 
 
¶10. (SBU) Earlier this month, Jordanian Arabic-language dailies 
reported that McDonald's was illegally serving daytime meals during 
Ramadan, the Muslim holy month of fasting, when most restaurants are 
legally prohibited from operating during the day.  Zaghal and JRA 
officials noted that Jordanian law permits some restaurants with 
predominantly expatriate clientele to sell food to tourists and 
others.  Zaghal clarified that McDonald's has a license to sell 
take-away food during the day in Ramadan, but that its permit had 
not been circulated properly within the Ministry of Interior.  When 
a district under-governor read the newspaper coverage, he moved his 
forces to shut down McDonald's restaurants in two neighborhoods in 
west Amman.  Zaghal went to the Minister of Interior's office, and 
the office nullified the shut-down decree.  Goussous said that raids 
have also occurred at other restaurants which are legally allowed to 
be open during the day or serve alcohol in the evenings.  According 
to industry officials, the raids are frustrating for business owners 
and are politically motivated by Islamic extremists. 
 
Comment 
------- 
 
¶11. (U) Jordan's restaurant sector is growing rapidly, reflecting 
the growing economy and the increasing number of appealing, often 
American, franchises.  There is wide agreement that the sector will 
continue growing, especially as Jordan grows its related convention, 
catering and tourism businesses.  This growth represents an 
opportunity for the establishment of other American franchises, as 
well as highly regarded American food products. 
 
Visit Amman's Classified Website at 
http://www.state.sgov.gov/p/nea/amman 
 
HALE