We watched the revolutions on television. Night after night we were shown pictures of riots in the centre of Cairo and Tunis, and we joined the revolutions in our sitting rooms, willing the demonstrators to succeed. And we reached for the telephone and cancelled our holiday plans, withdrawing our economic support for the same countries that need just that support to recover from the damage.
We looked on as it spread to Libya, with much more than demonstrations and peaceful transitions – the formerly untouchable Gadaafi challenged the rebels, and they responded with a full blown war, still continuing in October 2011. And the hotel industry in Tripoli was the centre of attention, as journalists were detained in the now-famous Rixos hotel. The Corinthia also bravely stayed open.
Unlike the JW Marriott, the Four Points by Sheraton and the Radisson Blu, which had only just opened their doors, only to have to shut again within days. It was unsafe for the staff and guests to remain, and anyway, apart from journalists, there were no guests.
Algeria and Morocco have been largely untouched by the “Arab Spring”, so far at least, and Morocco has grand plans to increase the share of national GDP contributed by tourism.
How quickly the world changes! At the beginning of the year, the international hotel chains were focusing heavily on North Africa, opening hotels throughout the region, and with considerable pipelines of new deals:
|Hotel Development in Africa 2011
Top 10 Countries by Number of Rooms
|Source: W Hospitality Group research, March 2011|
All five of the North African countries featured in the top ten destinations for branded hotel developments, and four of them in the top five – driven either by the then-booming tourism industries in the likes of Morocco, Tunisia and Egypt, or by the opening up of the oil-based economies in Algeria and Libya. Accor, the Paris-based hotel chain operating hotels under the Pullman Sofitel, Ibis and Novotel brands, amongst others, had over half of their development pipeline in Morocco and Algeria, underlining their commitment to North Africa.
Egypt topped the list, and understandably work on the majority of these 19 projects has stopped, due to the uncertainty about the future politics in the country, and the general effect of the global financial crisis. But Egypt has proved several times in the past that it is a fighter, and has rebounded many times after terrorist attacks and the like. The rebound this time may take longer, with riots in Cairo in October and uncertainty about the upcoming elections, but tourists have short memories, and resorts like Sharm el Sheikh and Hurghada can benefit from their strong individual identities, as opposed to being solely connected with the country’s tarnished reputation.
Libya’s future is unknown, but what is certain is that the country will require a great deal of support going forward, and the rebuilding of the cities will generate hotel demand. Whether that will bring new deals to the country remains to be seen.
Tunisia has had the most peaceful political transition and, given the importance of tourism to the country’s income, the tourists are likely to return to the resorts in 2012, with full recovery by 2013. that’s badly needed, with tourist numbers down 50 per cent in the peak summer season.
The crisis in North Africa affected not only the five countries of the region, but also countries regarded as “too close” – Sicily and other islands of Italy including Lampedusa and, strangely enough, also Malta. The latter is recovering well from the initial downturn, and the tourist authorities in Sicily and other islands are hoping that tourists really do have short memories, even if their knowledge of geography remains a bit suspect! But, as usual, every cloud has a silver lining, and North Africa’s loss is Southern Europe’s gain – Spain, Portugal, Greece and Turkey all reported unexpected increases in tourism numbers and revenues, at time when at least the first three countries badly need it. According to press reports, Spain received almost 8 million tourists in August alone, hotel receipts in Portugal were up 12.5 per cent in July, Turkey is up around 20 per cent in the first half of the year, and Greece is up 14 per cent.
And finally, another knock-on effect of the Libyan crisis is being watched carefully by operators and investors – at the last count, the Libyan government owns and manages around a dozen hotels in Africa, through its Laico Hotels vehicle, owns at least two more hotels which are closed awaiting refurbishment, and is the owner of others managed by third parties, including the Radisson Blu in Sandton. Some would say, probably correctly, that Libya is the largest hotel investor in the continent. Will the new government wish to remain the holder of that title? Or will they start to divest, placing some superb assets, such as the Regency in Nairobi and the Okoume Palace in Libreville on the market? We can only wait and see.
W Hospitality Group, Lagos