Morocco expanding tourism infrastructure in southern provinces

With an unspoiled coastline, vast swathes of desert and a unique cultural heritage, Morocco’s three southern provinces have the right ingredients to support a sustainable tourism industry. Although the region lags behind others in terms of site development and accommodation, private and public initiatives are helping to open up new opportunities for niche products and increase visitor traffic.

Up & Away

Given the range of attractions and low development levels, the opportunities for growth in the tourism sector are significant. According to a 2013 report by Morocco’s Economic, Social and Environmental Council (Conseil Economique, Social et Environnemental, CESE), tourism accounted for just 0.31% of the southern provinces’ GDP in 2011 and 2% of employment. This is partly due to the limited air links with the more heavily populated north, where the primary international airports are located, as well as underdevelopment of accommodation and niche services. The CESE report stated, “The tourism sector has not achieved its full potential due to poor communication at the regional and national levels on the region’s potential, the low bed capacity, animation and entertainment services.”

This dynamic is changing, however, thanks to the national tourism development strategy, Plan Azur 2020, which is facilitating the build-out of tourism capacity in the southern provinces. Additional flights have begun linking the three major cities to Casablanca and the Canary Islands; Dakhla, for instance, has 10 weekly flights to Agadir and Casablanca combined. As a result, a combination of large-scale investments and smaller family-owned hospitality businesses has been increasing local supply and raising the region’s profile with local and foreign visitors alike.

Fresh Capacity

Private initiative, driven by the region’s growing reputation, is also set to expand tourism infrastructure. This will be a welcome contribution to the local economy, and although efforts will focus on an array of sectors, part of the financing will go towards boosting hospitality capacity, both in terms of hotel beds and residential tourism. The southern chapter of the General Confederation of Moroccan Companies (Confédération Générale des Entreprises du Maroc, CGEM) announced in early 2015 it expects Dh6bn (€652.8m) in investment in the region by year’s end, with real estate, infrastructure and tourism to receive Dh2.7bn (€293.8m).

Construction company El Moussaoui is set to build a Dh20m (€2.2m) hotel in the Foum El Oued area, which is expected to create 60 jobs. An ecotourism golf resort, valued at Dh10m (€1.1m), is also being constructed in Foum El Oued and is set to create as many as 47 local jobs. In the town of Guelmim a Dh130.8m (€14.2m) tourism complex is being developed by Guesma Développement, equipped with a four-star, 120-room hotel and associated amenities. The new unit will take 36 months to build and is projected to employ a staff of 120 upon completion. In the city of Laâyoune, a 60-room hotel with 88 villas is being planned. The Dh47.5m (€5.2m) project, which is being handled by Laâyoune Dé veloppement, will expand new tourism capacity in one of the most important urban centres in the southern provinces, generating some 200 jobs.

International Interest

International players are also taking note of opportunities in the region. In 2013 the Ministry of Tourism (MoT) and the Société Marocaine d’Ingénierie Touristique signed a memorandum of understanding with the UAE’s Al Shafi Group to establish a Dh1bn (€108.8m) luxury eco-tourism resort in the Dakhla area. This comes alongside other key investments in local industry, such as the burgeoning aquaculture segment. Active coordination among local and national stakeholders will be key to ensuring that each project receives the necessary funding and support. “A strategic master plan has been adopted covering the city of Dakhla and the rural community of Argoub – including both sides of the Bay of Oued Eddahab for a total area of 400 sq km – in order to capitalise on this territory’s natural potentialities in tourism, agriculture and fishing. Aquaculture has also recently been identified as an activity with economic potential that must be smartly developed alongside these sectors, thereby diversifying economic resources and enabling this region to become more competitive and more attractive,” Hayat Sabri, the director of the Urban Agency of Oued Eddahab Aousserd, told OBG.

Big Builds

One of the largest tourism projects is taking place on the coast, 50 km from Tan-Tan. The 500-ha, 2500-room Oued Chbika development is the result of a joint venture between Egypt’s Orascom Development and Morocco’s CDG Dé veloppement and will feature several hotels, golf courses, a conference centre and a marina, as well as related services like restaurants and shops, with a section of the resort to be managed by the Club Med brand.

Despite partial delays in the financing of the project due to the global financial crisis, developers stated in 2014 that €100m had already been secured out of a total expected investment of €120m, with 60% of the funds stemming from the partnership and the remaining 40% coming from financing, and multilateral organisations such as the European Bank for Reconstruction and Development involved in structuring the necessary project finance mechanisms. The joint venture plans to source the remaining €20m from Moroccan banks, Samih Sawiris, CEO of Orascom Development, told local press.

Although the initial opening date for the first section of the project, which includes three hotel units, was expected to be 2015, the financing delays led to postponements, and the project’s inaugural phase is now expected to be completed in the third quarter of 2015, according to local media reports.

In contrast to the challenges that Morocco has faced at other master-planned resorts – such as the Saidia resort on the Mediterranean coast, where seasonality led to low occupancy rates – Oued Chbika should benefit from some 300 days of sunshine per year and consistently warm weather, a crucial attraction for European visitors. However, much of this potential will depend on accessibility. The closest airport, in Tan-Tan, currently receives five weekly flights from Casablanca, though Royal Air Maroc has announced it will open direct links between TanTan and a handful of European capitals once the resort is up and running, according to local media.

Small-Scale Upgrades

Although large tourism resorts are an efficient way to create new sector infrastructure, some areas of the south are better adapted to small-scale tourism, with a focus on sustainability and integration with the region’s natural landscape. Support from the Agency for the Promotion and Economic and Social Development of the Southern Provinces of the Kingdom (Agence pour la Promotion et le Développement Economique et Social des Provinces du Sud du Royaume), known as the South Agency, has allowed the establishment of small, family-managed hotels and guesthouses. This strategy has been especially relevant in designing sustainable tourism projects in fragile oasis areas.

The oasis tourism programme, developed by the South Agency and the UN Development Programme, has worked to structure the social, economic and environmental sustainability of oasis regions around the concept of ecotourism. An initial phase in 2008 was focused on the provinces of Assa, Tata and Guelmim, which benefitted from upgrades and new infrastructure, including 20 accommodation units and three museums. The programme also focused on expanding management capabilities.

Niche Segments

The region is looking to strengthen its appeal in niche segments like desert and eco-tourism, potentially in combination with traditional beach destinations. With visitors able to access the beach zones of Akhfenir, Tarfaya, Khnifiss and Oued Schbikat via airlinks between Casablanca and Laâ youne, the Laâyoune-Boujdour-Sakia El Hamra area has been receiving attention as a potential hotspot for tourism development. A 130-ha area has already been set aside in the beach area of El Marsa.

The city of Laâyoune and its surrounding area would allow developers to link traditional beach tourism with more niche products like oasis tourism, as the city is situated just 40 km from the Lamseid oasis – close enough for day trips. El Marsa has also been a target for investment, with an influx of real estate development projects, including a Dh250m (€27.2m) project by developer Groupe Addoha to build 1500 new residential units.

Cultural Attractions

Another element to link tourism development with the Oued-Eddahab-Lagouira region’s cultural and historic heritage is a handicrafts centre to promote local artisans. The Dh13m (€1.4m) project, being set up in central Dakhla, will boast a 660-sq-metre area with 25 showrooms as well as a commercial area and training facilities. The project is being jointly developed by the South Agency, the Handicrafts Department and the General Direction for Local Collectives. Besides the obvious tourism potential, authorities expect the new centre to be an effective vehicle for increasing employment in the region. Indeed, tourist arrival figures in the city of Dakhla have been slowly rising, increasing from 11,185 in 2011 to 13,120 in 2012, according to figures published in local media.

In late 2013 local authorities and the MoT established a programme to develop tourism opportunities in the Laâyoune-Boujdour-Sakia El Hamra area. Valued at Dh3.4bn (€369.9m), the plan is focused on developing sustainable tourism infrastructure and promoting the region’s cultural heritage. With 98% of investment to be financed by the private sector, the plan’s main goal is establishing adequate hospitality options, which has traditionally been an area in need of improvement in the southern provinces. The plan will be implemented through 21 projects to be completed by 2020, and is expected to add 3300 additional beds to the province upon completion. By the time the project is finished, tourism authorities expect the Laâyoune area will receive as many as 158,000 tourist arrivals per year.


With its pleasant setting on the coast, bordered by dunes and a lagoon, the southern-most city of Dakhla has become one of the region’s more popular destinations. Sea and wind sports aficionados in particular have boosted visitor numbers to the area’s 667-km coast, especially during the winter months and when the city organises its annual international kite surfing competition each March.

Due to this growing interest, bed capacity in Dakhla has been on the rise. According to its Regional Centre for Investment (Centre Régional d’ Investissement, CRI), the city currently has about 1300 beds, though few are of high quality, according to CRI director Mohammed Abdellah Bouhjar. To address this, regional authorities are establishing a system to rank hotels and encourage improvements through implementation of an accreditation system.

Promotional Efforts

Limited awareness has been another challenge for local operators. “A big problem for us is the lack of available information on the destination, because we do not communicate sufficiently about the region”, Bouhjar told OBG. In March 2015 local authorities organised a visit to Dakhla for a 160-member group of European tour operators to promote the region’s tourism potential.

Regional authorities are also looking at promoting the region to visitors flying into other nearby destinations, such as Agadir or the Spanish Canary Islands, located off the country’s western coast. Agadir has long been a draw for European and Russian visitors, and although its focus on mass beach tourism is somewhat different from the potentially high-end opportunities being developed in the south, a carefully designed joint-promotion strategy could help sell tourism options in the south alongside other destinations like the nearby Atlantic islands.

The Canary Islands, just four hours away by plane, also offer cross-promotional potential. “There is an opportunity to develop tourism offers between the southern region and the Canary Islands. What is needed is the establishment of a ferry system between the two, since the Canary Islands already get a significant volume of tourists,” Henri-Louis Védie, a professor of finance at HEC Paris business school who specialise in emerging economies, particularly Morocco, told OBG.

Infrastructure Needs

Better infrastructure will also be a draw for both domestic and foreign tourists. Morocco’s domestic tourism market is showing growing potential, as incomes rise and the middle class expands. In the decade to 2014, GDP per capita in constant prices rose from Dh16,300 (€1775) to Dh22,300 (€2425), according to the IMF. This presents clear opportunities for operators in the south, and the government has sought to encourage this. In recent years, authorities have subsidised air travel between Casablanca and some cities in the south, according to the CESE. Public infrastructure spending and private investment in logistics and services is also set to improve connectivity, with greater capacity for airports, roads and ports, including a new 2300-sq-metre airport terminal and a planned Atlantic seaport in Dakhla.

The southern provinces boast a combination of natural scenery and cultural heritage that contribute to a unique tourism proposition. For the region’s potential to be fully developed, however, private and public financing mechanisms will be needed to establish the necessary physical infrastructure. Several hospitality developments are already under way, and government efforts to develop ecotourism in the oasis areas are becoming a blueprint for economically viable, small-scale projects.

Morocco has a proven track record of developing a tourism offer that caters to different market segments. Applying these experiences to new projects in the southern provinces will help the region achieve its potential as a sustainable tourism destination.