VZCZCXYZ0017
PP RUEHWEB

DE RUEHRB #0978/01 3501413
ZNR UUUUU ZZH
P 161413Z DEC 09
FM AMEMBASSY RABAT
TO RUEHC/SECSTATE WASHDC PRIORITY 0947
INFO RUCNMGH/MAGHREB COLLECTIVE
RUEHCL/AMCONSUL CASABLANCA 0009
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS RABAT 000978 
 
SIPDIS 
SENSITIVE 
 
STATE FOR EEB/CBA, NEA/MAG AND EEB/IFD/OMA 
STATE PLEASE PASS OPIC 
 
E.O. 12958: N/A 
TAGS: EINV ECON EFIN SENV MO
SUBJECT: MOROCCO'S FIRST BEACH RESORT UNDER NATIONAL 
TOURISM STRATEGY IS A GHOST TOWN 
 
REF: RABAT 0392 
 
Sensitive but Unclassified.  Please protect company 
proprietary information. 
 
¶1.  (SBU) Summary:  Three months after the fanfare 
surrounding the June 19 inauguration of Morocco's first 
seaside resort completed under the "Plan Azur" or Blue Plan 
tourism strategy, Saidia Mediterranean officially closed its 
doors to tourists.  The Saidia resort represents a USD 1.5 
billion investment by the Moroccan real estate development 
group Addoha.  Its two major hotels have shut down, and 
British buyers are reportedly backing out of villa purchases. 
 The associated marina is not fully functional. 
Environmentalists have complained about accelerated 
ecological destruction of the site, known for its 
biodiversity.  Addoha representatives state that the hotels 
are closed for the low-demand winter season and will use the 
time to prepare for the next season.  Addoha, however, 
recently announced the planned opening of a third hotel in 
Saidia in summer 2010.  While closing tourist resorts over 
the winter is not unheard of in Morocco, the adjustment of 
initially confident plans for year-round operations 
represents another setback for Morocco's beleaguered 
high-profile tourist stations.  Other Plan Azur resorts are 
proceeding, and Morocco is still hopeful that approximately 8 
million tourists will visit in 2009.  End Summary. 
 
--------------------------------- 
Rush to the Finish Line Backfires 
--------------------------------- 
 
¶2.  (SBU) King Mohammed VI inaugurated the first seaside 
resort under Vision 2010's Plan Azur or Blue Plan strategy to 
boost tourism on June 19 in Saidia on the Mediterranean 
border with Algeria.  The USD 1.5 billion project envisions 
accommodations for 30,000 tourists in 9 upscale hotels, 12 
holiday villages, 8 tourist complexes, 2,700 apartments and 
300 villas, with 3 golf courses, a 1,350-berth marina, and a 
160-store mall (the "medina").  At the inauguration, however, 
the resort was only filled to 33 percent capacity, the timing 
of the opening dictated by the Government of Morocco's 
(GOM,s) insistence that it host the country's ninth annual 
tourism convention (the "Assises du Tourisme").  High-level 
government, business and diplomatic representatives attending 
the convention stayed at one of the hotels.  (Note:  EconOff, 
who also attended, observed the resort in a substantially 
incomplete state, with most of the facilities still under 
construction.  Two hotels, one golf course, a handful of 
shops and part of the marina were operational.  End Note.) 
 
¶3.  (SBU) Despite Minister of Tourism (MOT) Mohammed 
Boussaid's admission of the "excessively ambitious timeline" 
of the Plan Azur project in May (reftel), he announced his 
commitment to maintain the "dynamism of investment in the 
sector, develop the commercialization of Moroccan tourism, 
and reinforce the quality of service provided" during the 
convention in June.  Three months later, Plan Azur's first 
resort completely shut down.  Adil Bensouda from the MOT 
General Secretariat told EconOff that it is normal for some 
hotels to close during the winter months.  However, he 
continued, "This is a 100 percent private matter handled by 
the Moroccan branch of the Spanish group Fadesa (part of 
Addoha Group) and the Ministry is not involved in its 
decisions." 
 
------------------------------------- 
Government Pressure to Develop Saidia 
------------------------------------- 
 
¶4.  (SBU) Saidia's two operational hotels, Barcelo and 
Iberostar, with 614 and 458 rooms, respectively, have been 
closed since September and are expected to reopen in March 
2010, Fadesa Maroc's Director of Communications Souhail 
Berrada informed EconOff.  The hotels are closed during the 
off season, he added, mainly because of climatic conditions 
that are not conducive to winter tourism in northern Morocco. 
 He underlined that many resorts in the region close during 
winter.  The resort is its initial period of functioning, he 
said.  He added that the company will use the winter recess 
to train staff and make other preparations for the next 
season, addressing a shortfall in qualified staff.  (Note: 
Before the inauguration, observers noted the lack of trained 
tourism personnel as an obstacle for the resort to overcome. 
End Note.)  In the future, Berrada concluded, the resort will 
be counting on 12 months' occupancy. 
 
 
¶5.  (SBU) Although ministry representatives insist the 
Government is not involved in Addoha's decisions, Addoha's 
General Director Jawad Ziyat acknowledged in a press 
interview that, "from a purely touristic point of view," 
Addoha is more interested in operating in the southern part 
of Morocco.  Because of the need for equitable development of 
different regions, he stated, the Government emphasized 
Tangier, Tetouan and Saidia in the Plan Azur.  While news 
reports claim that there is very little activity in the 
resort and that its golf course, many shops and restaurants 
are closed, Ziyat noted that about half of the shops in the 
"medina" are open, as well as several shops and restaurants 
in the marina.  Hotel management has also met MOT 
representatives, highlighted Ziyat, to discuss how to "manage 
the constraints imposed by the weather." 
 
------------------------------------- 
Investors Back out of Villa Purchases 
------------------------------------- 
 
¶6.  (SBU) Moroccan daily L'Economiste reported on November 30 
that about 20 United Kingdom citizens have backed out of 
villa purchases in Saidia and demanded a refund of their 
deposits (approximately USD 120,000 each).  These 
individuals, the report continued, complained that the villas 
were not ready during the timeframe agreed upon with the 
developer.  Ziyat attributed the UK buyers' withdrawal to the 
international economic crisis (a factor the buyers' lawyer 
admitted was important in the decision) and added that this 
is not unique to the Fadesa project, since British clients 
have also backed out of purchases in Portugal and Spain.  At 
the same time, he added, some 150 UK citizens have made 
deposits for the group's other tourism project in Tangier. 
 
¶7.  (SBU) The UK Trade and Investment (UKTI) Center in 
Morocco reports that almost 70 percent of the investors in 
the Saidia project are British.  Unmet deadlines, lack of 
accountability and the developer's lack of professionalism 
were the main reasons British investors decided to pull out 
of the project, UKTI's Najat Benyahia informed EconOff.  Some 
wanted their money back, she continued, and asked for British 
government's help.  When the British Government was unable to 
satisfy the investors, they wrote to the King, she told us. 
To date, none has received a refund. 
 
----------------- 
Incomplete Marina 
----------------- 
 
¶8.  (SBU) The marina has been criticized for the lack of a 
fuel and service station for boats.  According to news 
reports, fuel for yachts is smuggled from Algeria in 
five-liter jugs.  Ziyat disputed these claims, saying that a 
petroleum company is supplying fuel on-site to large boats 
pending construction of a fuel station (slated to open in 
early 2010), while smaller boats use fuel jugs which enter 
the port after having passed through customs. 
 
--------------------------------------------- 
Job Creation Overrides Environmental Concerns 
--------------------------------------------- 
 
¶9.  (SBU) Environmental activists have sharply criticized the 
resort's impact on Saidia beach and the broader ecosystem 
around the estuary of the river Moulouya, which the MOT has 
classified as particularly biodiverse.  Moroccan NGOs such as 
"Ecoplateforme du Nord" and "Espace de Solidarite de 
Cooperation de l'Oriental (the Movement or Space for 
Solidarity and Cooperation in the Oriental -- SSCO), have 
posted videos on YouTube denouncing the Saidia project from 
its inception.  The resort significantly contributes to the 
erosion of Saidia beach, deforestation of the area and water 
pollution, stressed ecologist and SSCO President Mohammed 
Benanate.  "Ecoplateforme du Nord" also denounced the 
"irreversible ecological damage" that the resort has wrought 
on Saidia's ecosystem. 
 
¶10.  (SBU) When asked about the project's impact on the 
environment, local authorities in the Oujda region (of which 
Saidia is a part) acknowledged that the benefits of 
development outweighed the possibility of environmental 
degradation in making the decision to proceed with the 
project.  "One has to choose," said Oujda Region Governor 
Mohamed Brahimi in a press interview, "between the 
preservation of a turtle and the creation of economic 
 
dynamism in the region, with at least 50,000 new jobs and 
income of 5 million dirhams (approximately USD 700,000)." 
The choice was easy, he concluded, as "this used to be a 
marshland which brought zero dirhams to the state."  (Note: 
The Mission is unaware of particular projected impacts on 
turtle populations and believes Brahimi was speaking 
off-the-cuff.  End Note.) 
 
------------------------------ 
More Plan Azur Resorts to Come 
------------------------------ 
 
¶11.  (SBU) Located one hour south of Casablanca, the second 
seaside project under Plan Azur, the Mazagan Beach Resort, 
opened in October 2009 near the Atlantic coast city of El 
Jadida.  American-owned Colony Capital, through its 
subsidiary Kerzner Development, oversaw the development of 
the five-star, 500-room hotel, golf course, spa and casino 
resort, which remains open during the winter season.  This 
week MOT Minister Boussaid officially announced the 
commencement of construction in 2010 of an additional 
long-stalled Plan Azur project, Plage Blanche, managed by 
Addoha through Fadesa Maroc.  Addoha also recently announced 
plans to open in July 2010 a third hotel costing USD 52 
million within the Saidia resort, again managed by Fadesa 
Maroc. 
 
¶12.  (SBU) COMMENT:  Although it is not uncommon in Morocco 
for a beach resort to close its doors during the winter 
months, this forced change of plans is an embarrassment for 
the Saidia resort, which validates Boussaid's belated 
assessment that the original plan was too ambitious. 
Circumstances outside of the developer's control (including 
weather and the global economic climate) contributed to the 
adjustments in earlier projections.  The MOT and Moroccan 
developers will need to carefully review their ongoing 
tourism development plans -- equally sensitive to external 
conditions -- to avoid a renewed plunge into construction 
without adequate assurances of foreign demand.  Despite the 
setbacks, however, the GOM still identifies tourism as a key 
base for the country's economic development and future 
current account balance, and will likely continue developing 
new offerings to attract foreign tourists.  The GOM estimates 
that approximately 8 million tourists will visit Morocco in 
2009, and while Colony Capital substantially reduced its 
planned investments in 2009, the MOT, Addoha and its Spanish 
partners continue to move ahead.  END COMMENT. 
 
 
***************************************** 
Visit Embassy Rabat's Classified Website; 
http://www.intelink.sgov.gov/wiki/Portal:Moro cco 
***************************************** 
 
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