VZCZCXRO2135
RR RUEHDE RUEHDIR
DE RUEHAM #0278/01 0271500
ZNR UUUUU ZZH
R 271500Z JAN 08
FM AMEMBASSY AMMAN
TO RUEHC/SECSTATE WASHDC 1614
INFO RUEHLB/AMEMBASSY BEIRUT 2775
RUEHEG/AMEMBASSY CAIRO 3483
RUEHDM/AMEMBASSY DAMASCUS 3779
RUEHJM/AMCONSUL JERUSALEM 4802
RUEHTV/AMEMBASSY TEL AVIV 0966
RUEHBS/USEU BRUSSELS
RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SECTION 01 OF 03 AMMAN 000278 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR NEA/ELA 
STATE PASS USAID 
 
E.O. 12958: N/A 
TAGS: ECON EIND JO
SUBJECT: TOURISM IN JORDAN IN 2007: REVENUES UP, MORE EUROPEANS, 
LESS ARABS 
 
REF:  A. 07 Amman 4074 
  ¶B. 07 Amman 3159 
  ¶C. 07 Amman 2017 
 
¶1. Summary: Revenues from Jordan's tourism industry have grown 13 
percent since 2006.  The number and duration of European visitors is 
growing but Arab tourism is declining.  Among Jordanian cities, 
Petra is experiencing the fastest growth, but low-budget hotels 
there continue to suffer from heavy debt.  Significant tourism 
investment is occurring in Aqaba and the Dead Sea region.  The GOJ 
is working to encourage investment in other locations such as 
Madaba, Kerak, Salt, Jerash, and Ajloun.  Jordan's cost of living 
and Jordanians' reluctance to work in the tourism sector are both 
impediments to growth.  End Summary. 
 
The Numbers 
----------- 
 
¶2. According to the Central Bank of Jordan, tourism revenues 
increased 12.2 percent to USD 2.31 billion in 2007.  The growth in 
annual tourism receipts has accelerated since 2002, when it was at 
USD 1 billion.  Officials are hopeful that revenues in 2008 will 
reach USD 3 billion, a 50 percent increase.  An October 2007 Oxford 
Group report expressed skepticism about Jordan's very high goals for 
tourism revenue, but said that growth in revenues and jobs is 
strong. 
 
¶3. The growth in revenues in 2007 occurred despite drops in the 
number of Arab tourists, who typically comprise 50 percent of 
tourists to Jordan (Ref A).  Historically, Iraqis and Saudis have 
represented a large percentage of overnight visitors, but their 
numbers fell 47 percent and 16 percent respectively.  This decline 
is attributed by tourism officials to rising prices in Jordan and a 
lack of regional marketing.  Although the total number of overnight 
visitors declined from 3.2 million to 3 million according to the 
Ministry of Tourism, revenues increased as the mix of tourists 
became more European - a group that typically spends more per day. 
The number of European tourists grew 37 percent during the first 11 
months of 2007.  Revenue also increased because the average stay for 
European tourists lengthened to four days, a trend that is also 
expected to continue.  161,000 American tourists visited Jordan in 
the first 11 months of 2007, an increase of 4 percent over 2006. 
 
¶4. There are 467 hotels and 21,149 hotel rooms in Jordan.  Amman, as 
the capital and business center, leads the country in number of 
hotel room nights sold at 3.5 million in 2006.  Aqaba was a distant 
second with 715,000, Petra with 400,000 was third, and the Dead Sea 
was fourth with 270,000 room nights sold.  Other cities all had less 
than 50,000 room nights sold in 2006.  Tourism employs 32,000 people 
- with about one-third in hotels, one-third in restaurants and the 
remaining third working for related businesses including travel 
agencies, car rental offices, tour guide services and in tourism 
transportation. 
 
Petra Grows but Low-Budget Hotels Still Suffer 
--------------------------------------------- - 
 
¶5. The increase in European tourism is mostly attributed to Petra's 
"World Wonder" victory last July (Ref B).  Occupancy rates at Petra 
hotels during the fall high-season were frequently over 90 percent 
and have remained high.  The number of tourists to Petra grew 61 
percent in 2007 to 580,000 and is expected to continue to grow. 
This growth will put Petra close to its UNESCO daily cap of 3,500 
visitors on its busiest days.  Director of Petra Archaeological Park 
Suleiman Farajat said that he is continuing to focus on the balance 
between preservation and tourism, and sees a need for improved 
facilities at the park. 
 
¶6. Although Petra-area hotels benefited from high occupancy rates 
throughout the fall of 2007, 14 mostly one-, two- and three-star 
non-chain hotels in Petra are facing foreclosure because of USD 2.7 
million in debts.  The debts were incurred during the regional 
tourism slump that began with the 2000 Intifada, and continued after 
September 11 and the onset of hostilities in Iraq in 2003.  The 
loans are financed by banks, but the government has at various times 
supported the hotels by cutting the interest rates, delaying 
principal payments, as well as cutting taxes and park entrance fees 
to encourage tourism to Petra in 2002.  Ramzi Habeeb, General 
Manager of the three-star Petra Panorama Hotel, said that the 
government worked to support local hotels with promotions to 
encourage Jordanian visitors during a time of almost zero occupancy, 
 
AMMAN 00000278  002 OF 003 
 
 
but that none of the actions were enough to offset their loan and 
operational expenses. 
 
Tourism Development Centered in Aqaba and Dead Sea 
--------------------------------------------- ----- 
 
¶7. The most vigorous tourism development is occurring in Aqaba where 
several mixed tourist/residential resorts including Saraya Aqaba and 
Ayla Oasis are being built (Ref C).  Ayla, at USD 1.42 billion, is 
the largest foreign direct investment project in Jordan's tourism 
sector history.  The project will take eight years to complete with 
the first phase ready in 2010.  In 2008, 1,000 hotel rooms will be 
added to Aqaba, doubling the number of hotel rooms.  Aqaba is also 
growing as a cruise ship destination with 51 cruise ships arriving 
in the first 6 months of 2007, up from 36 in the same period in 
¶2006. 
 
¶8. One real estate consultant told EconOff that an unintended 
consequence of the development boom in Aqaba will be a decline in 
tourism revenues in the nearby Bedouin-run (and largely 
Egyptian-staffed) accommodations in Wadi Rum which have often 
benefited from the limited number of hotel rooms in Petra.  The 
consultant speculated that tourists who cannot find rooms in Petra 
will increasingly stay in Aqaba which is just 45 minutes away, 
rather than in Wadi Rum. 
 
¶9. The Dead Sea is the second busiest tourism development area and 
already home to three five-star hotels situated along a short strip 
on the central shoreline.  An additional two five-star hotels 
currently under construction are scheduled to open in 2008.  Three 
resorts with up to two golf courses are also due to begin 
construction, including the USD 500 million Samarah Dead Sea Golf 
and Beach Resort. 
 
Government Support 
------------------ 
 
¶10. The GOJ and the Jordan Tourism Board (JTB) seek to extend 
visitors' time in-country, which is often a two-day visit as an 
add-on to a longer Israel or Egypt tour package.  The GOJ has 
launched a USD 70 million campaign funded by a loan from the World 
Bank to restore and beautify five of Jordan's cities with additional 
tourism potential: Madaba, Kerak, Salt, Jerash, and Ajloun.  The 
Ministry of Tourism is also working with the Jordan Investment Board 
(JIB) to develop an investment map to guide potential investors to 
opportunities in the tourism sector.  JIB Assistant CEO Issa Gammoh 
said the investment map will identify 75 potential projects, each 
with a value of at least USD 100,000.  While significant investment 
is occurring at the Dead Sea and Aqaba, the map will highlight other 
areas including Um Qais, Jerash and Ajloun in the north, and Shobak 
and Tafileh in the south. 
 
Barriers to Growth 
------------------ 
 
¶11. Tourism's growth has created many jobs, but many of the 
positions have been filled by non-Jordanians despite relative 
improvement in this area in recent years.  Recent visits by EconOff 
to hotels in Petra and the Dead Sea found significant numbers of 
employees from Syria, Egypt, and Southeast Asia.  USAID projects are 
currently focused on training Jordanians for tourism work, to 
address expected growth in Aqaba and elsewhere.  Prime Minister 
Nader al Dahabi criticized unemployed Jordanians who shun jobs due 
to a "culture of shame" at a special session of Parliament on labor 
policy on January 15.  At the same session, Labor Minister Bassem 
Salem said that while 180,000 Jordanians (about 14 percent) are 
unemployed, government initiatives have created 135,000 jobs that 
are currently held by expatriates including tourism jobs.  10 
percent, or 3,200 of tourism industry employees are women, an 
increase of 15 percent over 2006. 
 
¶12. A second barrier to tourism growth, particularly Arab tourism, 
is the rising cost of living in Jordan.  Tour guide operators 
estimate that the price for packages to Jordan will rise 10 to 20 
percent, reflecting increasing fuel prices for hotels, restaurants, 
and transportation.  Tourism industry organizations have asked to 
have Jordan's 16 percent sales tax lifted from tourism expenses. 
Ahmad El Bashiti, Executive Director of the Jordan Inbound Tour 
Operators Association, emphasized the need for some sort of relief, 
telling EconOff that Jordan is already an expensive destination 
relative to Syria and Egypt because of limited airline competition 
 
AMMAN 00000278  003 OF 003 
 
 
to Jordan, and because of excess capacity at Egypt's Red Sea 
resorts. 
 
Visit Amman's Classified Website at 
http://www.state.sgov.gov/p/nea/amman 
 
RUBINSTEIN