The previous years have been marked by highs and lows for many countries in the MENA region. The Tunisian tourism industry, however, has begun showing small signs of recovery following a sharp drop in international arrivals in the aftermath of two acts of terrorism – one at the Bardo Museum in Tunis in March 2015 and another at a Sousse resort in June 2015. The Tunisian government and tourism industry actors have been working towards capitalising on a renewed sense of stability by tapping in to new markets, as well as reconceiving the way Tunisia does tourism. Beyond traditional mass-market tourism, the country is looking to diversify its selection by offering luxury accommodation, attracting major international hotel brands,expanding the medical tourism segment, and developing alternative forms of tourism, such as bed and breakfasts and vacation rental home options.
Indicators
European tourists have historically formed the bulk of visitors to Tunisia, accounting for 72.6% of all foreign, non-resident arrivals into the country between January and August of 2014, according to the National Office of Tunisian Tourism (Office National du Tourisme Tunisien, ONTT). This number was almost halved during the same period in 2015, after the deaths of close to 60 tourists. Indeed, according to ONTT data, the number of European non-resident arrivals into the country dropped by approximately half, from around 2.03m in the first 9 months of 2014 to 1.06m people as of August of 2015. The same period in 2016 saw numbers decrease by a 51.9% drop from two years prior.
The drop in European travellers can be partly attributed to the UK Foreign and Commonwealth Office placing a travel warning on Tunisia in the aftermath of the attack in Sousse, which was previously a major destination for British tour operators. “Because of the travel warning, British tour operators are unable to fill the flights they had chartered, and have therefore largely suspended them,” Tarek Lassadi, the director-general of Tunisian travel agency Traveltodo, told OBG.
Consequently, Tunisia’s tourism industry – which currently accounts for between 7% and 8% of the country’s GDP – saw revenues fall by 35% in 2015 compared to 2014, down to TD2.35bn (€1.01bn). The drop in tourism revenues has had a significant impact on the country’s foreign exchange reserves, resulting in an 8.4% drop year-on-year (y-o-y) as of June 2016, to TD12.4bn (€5.32bn). That said, the continued stability and security improvements began attracting tourists once again over the summer of 2016 (see analysis). In May 2016, for instance, Tunisia’s minister of tourism, Salma Elloumi Rekik, stated that over 12,000 tourists travelled to the island of Djerba – home to the African continent’s oldest synagogue – as part of a two-day Jewish pilgrimage. Additionally, in the popular beachside town of Hammamet, located in the Nabeul governorate a little over 60 km from Tunis, the number of foreign tourist arrivals rose 18% between January and July 2016 compared to the same period in 2015, according to the local ONTT commissioner. An 85% rise in domestic tourist arrivals compared to the same period in 2015 strongly contributed to the bump in numbers.
New Markets
Also responsible for the uptick was the 184% increase in tourists from neighbouring Algeria, and a 420% increase in tourists coming from Russia between January and July 2016, compared to the same period in 2015. “The beginning of the Tunisian tourism industry’s recovery started in July 2016. Tunisair alone witnessed a 27% increase in its air traffic compared to the same period in 2015,” Karim Gueddiche, sales director at national airline Tunisair, told OBG.
According to the ONTT, the sudden influx of Russian tourists, rose from 46,279 in 2015 to 451,432 in 2016, which has helped balance out the negative economic impact resulting from a 92.3% drop in British tourists between 2015 to 2016. “There was a sudden peak in interest by Russian tour operators for Tunisia, likely due to the bouts of instability in their more traditional holiday destinations of Egypt and Turkey,” Lassadi told OBG. In addition, Tunisia has been eyeing the Chinese market for the past few years. Since 2003 the Chinese government has established a quota allowing 50,000 Chinese tourists per year to travel to Tunisia.
To further encourage this trend, Tunisian authorities opted to drop the visa requirement for Chinese tourists for visits of up to 90 days, and establish direct flights to major Chinese cities. Such openings have contributed to an 11.3% increase y-o-y in the number of Chinese tourists between January and August 2016, from 2835 to 3154 arrivals, according to the ONTT. To further cement this new relationship, officials from the Tunisian Ministry of Tourism (MoT) have made trips to meet officials in both Russia and China.
In The Region
Beyond Russia and China, Tunisia has been working on reinforcing other relationships to promote tourism. In April 2016 Elloumi confirmed that the Tunisian authorities were taking steps towards easing visa procedures for Ukrainian tourists. Tunisia has also decided to remove visa requirements for citizens of 11 African countries, including Angola, Botswana, Cameroon, Niger, the Central African Republic, and both the Democratic Republic of Congo and the Republic of Congo. “The Tunisian authorities have decided to unilaterally remove the visa restrictions and requirements for different African countries, to stimulate tourism from other Francophone countries as well as attract patients for medical tourism. Demand for the latter is high in countries like Niger and Burkina Faso,” Mouna Mathlouthi, director of study and international cooperation at the ONTT, told OBG.
Tunisia is also working towards attracting tourism from its immediate neighbours, as well as from the Gulf. Prior to the 2011 uprising that led to the collapse of the Gaddafi regime, Libyans would often cross the border into Tunisia, especially for medical tourism. As the civil conflict continues, Libyan households have less purchasing power and private clinics have noted a decrease in the number of arrivals (see health chapter). According to the ONTT, Libyan entries into Tunisia were down 17.1% between January and August 2016 compared to the same period in 2015, and down 44.4% compared to the same period in 2014. However, tourists from neighbouring Algeria increased 15.8% over the same period, from 966,193 arrivals in 2015 to 1.12m in 2016. With the exception of tourists from Bahrain, tourism from Gulf countries has been steadily going down since 2014. In order to once again attract this particular segment, there has been a renewed focus on the development of luxury tourism infrastructure, more renowned international hotel brands, and also more opportunities for high-end leisure activities and advantageous VAT-free shopping opportunities – similar to Turkey or Morocco, two countries with well-developed Gulf-oriented luxury tourism. Tunisia is therefore currently examining different avenues to further develop beyond the mass-market tourism it has become known for (see analysis).
Marketing
In addition to relaxing government policy, the country is revamping how it markets itself. “The ONTT has a significant communication issue on platforms such as Google and Facebook. The MoT, the ONTT and industry players must improve the country’s online image to boost tourism,” Lassadi told OBG. In 2016 the ONTT worked with the Japanese International Cooperation Agency to develop a Japanese-language website and produce other marketing products to promote Tunisia’s image as a tourist destination, and gear it to Japanese travellers. Additionally, as part of the progressive opening of air links with China, the MoT is looking into ways to create multiple destination packages tailored specifically to this market. “There is a willingness to commercialise multiple destination packages for China as there is no direct liaison between Tunisia and China for the moment,” Mathlouthi told OBG. “Such packages could include a short layover trip in Italy, for instance, before landing in Tunis,” she added.
Such a strategy is part of a broader reflection among travel agencies regarding their post-2015 role in marketing the country as a tourist destination and reaching new markets. According to the director of the Tunisian Federation of Travel Agencies and Tourism, in an attempt to mirror innovations by larger tour operators, presenting Tunisia as a platform between Europe and Africa, and offering multi-destination packages to Chinese – and also European – tourists would enable local travel agencies to expand and place the country at the cross-roads between both continents.
No Place Like Home
Finally, the industry is looking to continue to appeal to the local population, and encourage Tunisians from the coast to travel to the interior of the country. Domestic tourism sharply increased following the series of events in 2015. Indeed, according to Selim Hizem, commercial director at the Hotel Concorde, “Following the two attacks in 2015, prices were at an all-time low, which made the market much more attractive for internal tourism.” After seeing great potential in internal tourism market offerings, the MoT set a goal of making domestic segment reach 30% of the total tourism revenue in the country in the medium term. To achieve this, private investors were encouraged to develop alternative forms of tourism and hospitality infrastructure to attract the local market, particularly in the south, which continues to attract growing numbers of Tunisians.
Star Ratings
As part of a package of structural changes to Tunisia’s tourism industry, the MoT is considering implementing changes to the legislation around hotel classifications. “We are currently in the process of revising the star-rating standards for hotels, as well as for alternative hospitality infrastructure,” Mathlouthi told OBG. The current star-rating system is often criticised for being based too much on size and capacity of the hotel, rather than the quality of services. According to Ghassan Jana, general manager of the Golden Tulip La Marsa in Tunis, the use of star-ratings to evaluate the quality of a hotel could be seen as outdated, given that an increasing number of tourists use websites like TripAdvisor to gauge the quality of a hotel and its services. Nevertheless, many hotel managers are advocating for system reform and subsequently, a reclassification of hotels in line with international standards. As Tunisia’s tourism industry begins its slow and steady recovery, such a reform is seen as necessary in order to ensure customer satisfaction. “Some hotels currently classified as five-star hotels would fare better as four-star hotels. The MoT should reclassify hotels according to not only capacity but also the quality of service provided,” David Sierra, general manager of The Residence Tunis, told OBG.
International Brands
In line with legislative revision, the Tunisian tourism industry is looking to attract an increasing number of large international hotel brands to the country. Though the events of 2015 have left the hotel industry saddled with debt and are considered risky by financial institutions, many international brands have expressed interest in opening in Tunisia. A Four Seasons hotel is expected to open by 2017 in Tunis, and the Hilton Group signed a contract with El Mouradi Hotels and Resorts in May 2015 to rebrand the famous Hotel Africa and invest $5m into its refurbishing (see analysis). Finally, the Ritz-Carlton, a Marriott International brand, took over management of the Hotel Amilcar in the Carthage neighbourhood of Tunis and is currently conducting renovations, which were expected to be completed by the end of 2016 – a sign that the Tunisian market has begun attracting more big-name and international brands to feed in to the country’s diversification attempts.
Health & Business
Tunisia has long been a medical tourism destination for neighbouring Libyans, who sought care in Tunisian private clinics due to insufficient medical infrastructure back home. The MoT now sees medical tourism as a niche market, and authorities are taking related measures to facilitate this type of tourism. For instance, the waiver of visa requirements for certain African countries was due partly to the growing demand by civil servants and the growing middle- and upper-classes in those countries who are seeking better access to foreign medical infrastructure. Locally, investors are looking to turn certain abandoned hotels into large hospitality infrastructures for foreign medical tourists (see analysis).
Tunisia is also looking to develop business-oriented facilities in order to attract an increasing number of corporate travellers. While Tunis has long invested in conference centres and hotel meeting rooms, there is a strong desire to shift much of the business tourism to other parts of the country. “Not only are we seeing a renewed interest from locals and foreigners in the Tunisian south, we are also noticing a lot more interest on the part of local and foreign companies based in Tunisia to schedule annual conferences, boardroom meetings and other business events in our region,” Mohamed Essayem, tourism commissioner at the ONTT in Tozeur, told OBG. Additionally, the segment is further aided by the government’s renewed focus on domestic tourism . “Tunisia’s business tourism segment has a lot of potential, in part due to significant local demand for corporate event space,” Belhassen Baaboura, commercial director of Business Hotel in Tunis, told OBG.
Alternative Tourism
A new trend has been observed in the industry, whereby people are taking more short trips throughout the year rather than extended holidays. In this respect, the ONTT in conjunction with local actors in the tourism industry are working towards offering alternative forms of tourism to increase the authenticity of the experience. This is particularly true in the south of Tunisia, home to the Sahara, where the ONTT and local investors are working to offer guests an authentic look into local cuisine and desert culture. “The potential for the Sahara is large and there are many ways to attract tourists,” Essayem told OBG. “Beyond the opportunity to experience tours in parts of the Sahara, in recent years a series of events and festivals have been organised in the south to attract tourists and locals alike,” he added. Such festivals include Les Dunes Electroniques – an electronic music festival organised in the town of Tataouine, which is perhaps better known for being the town where parts of the Star Wars films were shot.
In addition to trendy music festivals and events, the south is investing heavily in developing alternative tourist housing infrastructure, namely bed and breakfasts as well as guestrooms and lodgings. “Especially in the south, it appears that tourists very much want to move away from the traditional hotel setting and stay in a local house. This is true for foreign tourists, but also for local Tunisian tourists who often want to cut costs,” Essayem told OBG. “Alternative housing is a very promising investment, and there are more than ten projects currently under way, with a lot more due to start soon.”
Training
In the midst of reforming the tourism industry to make it more competitive, the question of staff availability and training regularly comes up. “As far as services are concerned, we have difficulties competing with Turkey, largely due to the lack of a well-trained labour force,” Hizem told OBG. “Tunisia does have training centres, but they are not currently running at full capacity nor are they supplying the market with sufficient staff,” he added. In addition to improving the supply and training of hotel staff, industry players have asked for a review of the framework for hotel staff pay raises, as it currently serves more a function of government policy rather than quality of service and performance. A revised framework would be more closely aligned to staff efficiency and performance. Security training and procedures have also taken a lead role, as recent unfortunate events have made necessary. To that effect, the MoT, in cooperation with foreign partners, has created a training of trainers programme to improve the quality of security instruction, as well as create a new body of inspectors whose mission would be to ensure nationwide adhesion to the authorities’ revised security protocols (see analysis).
Outlook
After a couple of tough years the Tunisian tourism industry is slowly beginning to show signs of recovery. With a huge influx of Russian tourists and provisions for 2017 that cement this trend, coupled with continued internal tourism and a rising influx of Algerians and tourists from other African countries, the Tunisian tourism industry can be cautiously optimistic about its near future prospects. In addition, attempts by public authorities and industry actors to reform and improve the industry’s standards and practices, as well as develop new forms of tourism and reach new markets and investors, have begun to show results. The combination of new markets, new tourism offerings and new investors is beginning to lay the foundations for a very positive development in the next few years.
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