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Published on March 4, 2008
Analysis by Réhab El-Bakry

The World Economic Forum (WEF) has issued its second Travel and Tourism (T&T) Competitiveness report, which ranks and assesses the potential of the sector’s growth in 130 countries. T&T has seen enormous growth in recent years and is positively contributing to economies, the report stated.

“The travel and tourism industry has become a key sector in the world economy and a major driver of economic growth and employment worldwide. As one of the fastest-growing industries in terms of foreign exchange earnings and job creation, healthy T&T sectors provide important opportunities for countries to raise living standards, and – particularly in the developing world – to tackle poverty alleviation.”

The report’s assessment follows the theme of environmental sustainability and the ability of countries to develop the quality of their T&T industry while ensuring that this is done in a way that does not cause damage to the environment. Countries were given an overall rank on the Travel and Tourism Competitiveness Index (TTCI) based on their respective industries’ performance in three categories: T&T regulatory framework; T&T business environment, and T&T human, cultural and natural resources.

“The first subindex captures those elements that are policy related and generally under the purview of the government […]; the second subindex captures elements of the business environment and the infrastructure of each economy […]; and the third subindex captures the human and cultural elements of each country’s resource endowment […].”

One of the major changes implemented in this year’s assessment was the inclusion of environmental regulations as one of the major assessment points. The report also divides natural and cultural resources into two separate assessment points, whereas in the first report these formed a single assessment point. Despite the changes, Switzerland, Austria and Germany held on to their 2007 ranks, coming in first, second and third, respectively. Of the top 10 ranked countries, seven are in Europe. Australia, the US and Canada also ranked within the top 10, ranked fourth, seventh and ninth, respectively.

Of the 13 Arab countries included in the assessment, three made it into the top 40. Qatar, despite its limited population, small size and limited cultural tourism attractions, ranked 37th as a result of the country’s consistent ranks on all subindices. Tunisia, just two notches below and a main competitor to Egypt’s tourism market, also made the top 40.

“Tunisia is ranked 39th, with an excellent assessment of the prioritization of travel and tourism […], with high government spending on the sector, effective destination marketing campaigns, and attendance at most major international tourism fairs. Further, unlike some other countries in the region, Tunisia is perceived as relatively safe from crime and violence, including terrorism.”

Rounding up the top 40 countries is the United Arab Emirates (UAE), at 40th, which despite lack of natural and cultural resources, scored well on all subindices. The country has built a reputation for itself as hospitable to foreigners, despite constricted visa regulations. It is also perceived as a competitively priced destination despite high price levels.

“The UAE’s infrastructure also gets good marks, particularly its air transport infrastructure […]. The government is seen as prioritizing the sector strongly, carrying out very effective destination-marketing campaigns and ensuring the presence of the country at major T&T fairs internationally. On the other hand, rules and regulations could be adapted to better support the sector’s development, […] because of foreign ownership restrictions, visa requirements for many visitors, and much time and cost required for starting a business in the country, for example.”

Despite moderate rankings on the regulatory framework subindex and the human, cultural and natural resource subindex, Bahrain ranked 48th on the TCCI. Its position was mainly due to its excellent infrastructure, particularly its air travel and strong road network. Jordan’s rank at 53rd is mostly due to its wealth of natural and historic sites. Continued government support to the sector and its prioritization also helped its rank. However, the country still suffers from infrastructural problems that hinder the development of the sector as well as limited access to trained tourism professionals, the report said.

Egypt, despite its rich cultural heritage, including six World Heritage cultural sites, ranked just 66th overall in the TCCI.

“In addition to its cultural attributes, it benefits from excellent price competitiveness […]. Further, there is a national prioritization of the sector, with the government ensuring both relatively high spending on travel and tourism and the country’s presence at major tourism fairs. On the other hand, the country’s infrastructure is somewhat underdeveloped, particularly its tourism infrastructure and ICT infrastructure. An upgrading of the quality of the country’s human resources available to work in the sector, ranked 82nd, would also improve the country’s overall T&T competitiveness.”

One spot below Egypt in the TTCI, and boasting its own World Heritage sites, is Morocco, ranked 67th. While the government offers support to the T&T sector, its policies and regulations often fall short of the sector’s needs.

“The government is also seen to be making efforts to develop the T&T sector in a sustainable way, protecting the natural environment. In order to improve the industry’s competitiveness further, efforts should be made to improve health and hygiene levels in the country and upgrade the educational system, as well as make further improvements to the country’s transport and tourism infrastructure.”

Oman, Saudi Arabia and Kuwait, ranked 76th, 82nd and 85th, respectively, can all boast strong business environments and infrastructure. However, the lack of natural and heritage sites, government regulations that are unsupportive to the development of the tourism sector, and limited human resources and hotel rooms, reduced their overall rank. Trailing further were Syria, ranked 94th, Algeria, ranked 102nd, and Libya, ranked 104th.

The full text of the report is available on the World Economic Forum website at www.weforum.org


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