VZCZCXYZ0000
PP RUEHWEB

DE RUEHTUA #1030 2591631
ZNR UUUUU ZZH ZUI RUEWMCE5252 2591633
P 151631Z SEP 08
FM AMEMBASSY TUNIS
TO RUCPDOC/USDOC WASHDC
RUEHC/SECSTATE WASHDC0000
INFO MAGHREB COLLECTIVE

UNCLAS TUNIS 001030 
 
SIPDIS 
 
NEA/MAG (SWILLIAMS, VSTEWART, MNARDI); 
LONDON AND PARIS FOR NEA WATCHER 
 
E.O. 12958: N/A 
TAGS: ECON ETRD PGOV TS
SUBJECT: GOT SUPPORT FOR TUNISIAN TOURISM: ALL TALK NO 
ACTION 
 
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Summary 
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¶1. (SBU) Summary: Tunisia's tourism sector, which accounts 
for 11 percent of GDP, grew 8.6 percent in the first quarter 
of 2008 and in 2007 generated more than 3.05 billion TD 
(roughly $2.5 billion) in revenue.  Though overall figures 
look strong, they are consistent with the package-deal 
low-end tourists Tunisia is attracting.  The Minister of 
Tourism publicly announced his intention to shift Tunisia's 
image to that of a high-end destination, with a greater 
diversity of attractions and longer-staying foreign visitors. 
 However, industry leaders claim that GOT intentions are not 
supported by actions, and doubt any real support is 
forthcoming.  End Summary. 
 
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Knock, Knock: Who's There? 
-------------------------- 
 
¶2. (SBU) The number of tourists from Europe grew two percent 
in 2007, but the countries of origin are changing; a 
reflection of Tunisia's enduring reputation as a cheap 
vacation spot.  According to the Tunisian National Board of 
Tourism, the number of French, Russian, Polish and 
Scandinavian tourists is on the rise, while the number of 
German, Italian, English and Spanish tourists is declining. 
Visits to a popular beach town by PolOff revealed an 
increased number of signs and posters in Polish and Cyrillic, 
indicative of this changing demographic.  The number of 
tourists from neighboring countries, namely Algeria and 
Libya, also grew 4 percent in 2007.  Tunisia welcomed roughly 
6.8 million foreign tourists in 2007, up from 6.6 million the 
year before.  Roughly 80 to 90 percent of them purchased 
beach package deals to resorts located along Tunisia's almost 
one thousand miles of coastline. 
 
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If You Sell it, They will Come 
------------------------------ 
 
¶3. (SBU) The GOT aims to shift away from servicing the cheap 
package-deal market to become a high-end niche destination, 
or so it says.  The Tunisian Minister of Tourism, Khalil 
Lajimi, publicly allocated 5 million TD (approximately US 
$4.3 million) for a fall 2008 advertising campaign targeting 
German, Italian, British, and Spanish tourists.  Moncef 
Guitouni, General Manager of the Ramada Hotel, pointed out 
that despite this announcement, Tunisia has not done well 
marketing itself.  This phenomenon is aptly explained by the 
business model employed by MHomed Driss, owner of 10 three 
to five star 1,000 bed beach resorts in popular beach towns. 
He relies on European tour operators to bring him clients. 
Only a small fraction of reservations for his hotel chain are 
made online. 
 
¶4. (SBU) Michael Smith, Director of Fidelity Investments in 
Tunisia, assesses that there is no reason why Tunisia's 
tourism sector is not a shining gem in North Africa.  Experts 
explain that aside from the lack of marketing efforts, 
Tunisia is not attracting high-end tourists because of its 
sub-standard hotel infrastructure and underdeveloped services 
sector.  Tunisian hotels with GOT four and five star rankings 
are by and large comparable to three star facilities in the 
U.S. and Europe. 
 
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Targeting Niche Groups 
---------------------- 
 
¶5. (SBU) In addition to attracting wealthier tourists and 
enticing them to stay longer, the GOT wants to expand the 
diversity of tourist destinations and activities.  The GOT 
claims to be offering incentives such as lowered taxes to 
foreign investors willing to develop resorts in desert zones 
away from the coast.  Tunisia,s spa and thlassotherapy 
(seawater treatment) business is second only to that of 
Frances in the Mediterranean region.  More than 41 
healthcare spas in Tunisia generate more than 86 million USD 
in revenues.  The GOT is eager to attract more of this niche 
tourist group because they spend between 200 and 500 percent 
more during their trips than their package-deal counterparts. 
 Golf tourism is increasingly competitive in the region, and 
developers across Tunisia are building more golf courses in 
support of attracting higher-end tourists.  Tunisia had nine 
full golf courses at the end of 2006, up from three in 2001. 
 
 
 
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Sizing up the Competition 
------------------------- 
 
¶6. (SBU) Despite annual growth in revenue, Tunisia struggles 
to generate the same amount of income from tourism as that of 
its two major competitors in North Africa: Egypt and Morocco. 
 Tunisia hosted the same number of international tourists as 
Morocco in 2006, about 6.5 million.  However, Tunisia 
generated less than half of Morocco's $6.4 billion in tourist 
revenue.  In comparison, Egypt attracted more than 9 million 
tourists in 2006 and about $7.6 billion in revenue. In Egypt, 
tourism revenue accounts for 20 percent of foreign currency 
revenue; in Tunisia it accounts for roughly eight percent. 
Guitouni believes that Morocco and Egypt market to tourists 
by emphasizing the history, culture and unique attractions in 
their countries.  He said Tunisia must adopt the same 
approach to continue competing for tourists planning to 
travel in North Africa. 
 
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Run the Numbers 
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¶7. (SBU) In 2007, the Tunisian tourism sector directly 
supported approximately 95,000 jobs and more than 325,000 
indirectly.  The industry generated 3.05 billion TD (roughly 
$2.5 billion) in foreign currency receipts, a 6.2 percent 
increase over the previous year.  Tourism receipts accounted 
for 10.8 percent of all current receipts.  Investment in the 
sector declined slightly to 300 million TD (US $ 245 million) 
from 330 million TD (US $ 270 million) the year before.  As 
was the case in previous years, most of the investment 
dollars are spent on refurbishing old hotels and building new 
ones. 
 
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Comment 
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¶8. (SBU) Tunisia,s steady growth in tourism is largely 
happenstance.  Two trends appear to hinder Tunisia's move 
away from package deals toward the high-end market.  The 
first is the widely held marketing philosophy by hotel owners 
of &if I build it, they will come8.  The second is lack of 
GOT follow-through in ensuring that new developments and 
upgrades to existing infrastructure meet the expectations of 
the high-end consumer demographic. 
 
¶9. (SBU) Fundamentally, the industry needs to boost its 
service-provider delivery and credentials if it intends to 
attract the type of clients that stay for long periods of 
time, travel to various regions within the country and spend 
hard currency.  At present, tourists who have booked 
themselves into "five-star" hotels more often than not, find 
themselves in relatively modest accommodations.  End Comment. 
DESJARDINS