Mideast Tourism Industry Targets Hardy Russians
As the Middle East and North Africa (MENA) taps new sources for visitors and struggles with a reputation as a dangerous destination increasingly hostile to the booze and bikinis that are the sin qua non of world travel, Russians have emerged as the tourists of choice.
Egypt is still suffering bouts of violence – some 20 people were killed in a Cairo protest Wednesday and its Sinai Peninsula has been plagued by killings and kidnappings – but tourism officials are convinced Russian visitors will look the other way. Egypt is cutting airport fees, marketing itself through a private sector fund and launching new segments, such as eco-tourism to lure Russians as well as Indians, Chinese and Japanese.
Morocco, which has avoided most of the Arab Spring upheavals, is also focusing on Russia, Poland, the Czech and Slovak republics as flagship carrier Royal Air Maroc adds more flights linking the country to Russia and Poland.
Over in the Gulf, Flydubai, the emirate’s budget carrier, has opened up routes to Russia and neighboring Ukraine, including twice weekly flights to the Russian cities of Kazan, Ufa, Samara and Yekaterinburg. To lure Russians to its beaches, as well as its holy sites, Israel recruited Russian travel agents to complete in a “Miss Russian Tourism” pageant this week to promote its Eilat resort.
John Fletcher, who is director of the International Center for Tourism & Hospitality Research at Britain’s Bournemouth University, said the reputation of Russians as Teflon-coated tourists is exaggerated. Research shows that some nationalities are more risk adverse travelers than other – the Germans compared to the British – but the differences are not that great, he said.
“There is no evidence to suggest that that the Russian tourists are any more or less concerned about the prospect of being caught up in terrorist acts or civil unrest than the rest of Europe,” Fletcher told The Media Line in an e-mail.
Sukuk Gain as Europe Ails, Costs Fall, Religion Thrives
Islamic bonds (sukuk) are set to become the big hit of the Middle East’s financial markets this year as low costs, a contracting European banking industry and a rising tide of religion across the region spur interest from borrowers and investors alike.
Dubai gave the segment a lift last week when investors climbed over themselves for two issues of sovereign sukuk worth $1.25 billion. The strong demand was reflected in pricing of 4.9% for the five-year bond, a record low for dollar-denominated bond issued by the emirate, and 6.45% for the 10-year issue.
Sukuk issues were already on the ascent in the first quarter when the global total grew to $43 billion from $21 billion in the final three months of 2011, according to figures from Saudi Arabia’s National Commercial Bank (NCB). In the Gulf Cooperation Council (GCC) countries, the value of sukuk issues reached $8.6 billion in the first quarter, up from $3.3 billion in the previous quarter, it said.
NCB says the best growth is yet to come. “Global sukuk issuance this year appears on track for another all-time record, with last year’s $85.4 billion set to be comfortably exceeded even under the more cautious projections. In view of current trends it appears likely that aggregate issuance will clearly exceed $100 billion this year,” it said in an April 22 report.
Sukuk (Arabic for “legal instruments’) are securities that comply with Islamic law, or sharia, by not paying interest. They mimic the cash flow of conventional bonds by paying holders the equivalent of rent together with a promise by the issuer to buy back the principal amount.
One reason, said Capital Economics’ Middle East Economist Said Hirsh, is that Europe’s financially troubled banks are paring back lending in the Gulf. He estimates they provide about 10% of total credit to non-bank borrowers in the Gulf, much of it short-term debt that they unlikely to roll over as they retrench. Local banks will be able to pick up only part of the slack, he said.
Saudi Arrest Lays Bare Egyptian Resentments
CAIRO – Yussif Gamal smiled widely as he watched a group of Egyptian protesters spray paint on the walls of the Saudi Arabian Embassy in Cairo.
Ostensibly, the demonstration he was joining is aimed at freeing Egyptian human rights lawyer Ahmed El-Gizawi, whose arrest by Saudi authorities created a firestorm of protests and led Riyadh to recall its ambassador. But for Gamal, like many other Egyptians, there is a subtext to their anger and it is the treatment of the million or so Egyptian guest workers in Saudi Arabia.
“I think the Saudi government will have to realize the Egyptian people are no longer weak,” Gamal told The Media Line. “We are ready to make this a struggle for El-Gizawi and our dignity as workers.”
Some 1.7 million Egyptians work in Saudi Arabia, according to the United Nations International Labor Organization (ILO), and some estimates put the number higher. They help fill a shortage of skilled labor in the wealthy, oil-rich kingdom while alleviating unemployment back in Egypt and sending hundreds of millions of dollars to their families at home, providing critical foreign exchange.
But Egyptians, like other expatriate workers in Saudi Arabia, are subject to discrimination and abuse. Among the biggest problems is the system of sponsorship, or kafala, under which foreigners can work in the country only if they have a sponsor, who organizes contracts, salaries, visas and repatriation. Sponsors often use that control to exploit workers by taking away their passport or iqama (residence permit) or by failing to pay wages on time.
Tourists Are Coming Back to the Middle East
Not so long ago written off as a victim of the Arab Spring no less than Hosni Mubarak or Zine Al-Abidine Ben Ali, the Middle East and North Africa’s (MENA) tourism industry is showing signs of revival even as unrest continues to stir across much of the region.
The latest sign of the recovery in hotel-occupancy figures from STR Global, a London-based company that tracks the worldwide hotel industry, which reported occupancy rates jumped 14.6% across in the Middle East and Africa in March from a year earlier to an average of 65.1%. The occupancy rate was higher than either Europe or North America.
The outlook for the region, in spite of its continued political gyration, is looking better. “Arab Spring countries are expected to witness a rebound in 2012, but volatility continues to cast a shadow over the region,” market research firm Euromonitor International said in a review of global travel trends.
Arab Spring unrest took a heavy toll on Middle Eastern tourism last year unrest erupted in major regional tourism destinations like Tunisia and Egypt as well as Libya, Syria, Yemen and Bahrain. While international tourist arrivals grew worldwide by 4% in 2011, in the MENA region they dropped 8.8%, with the worst-hit countries reporting double-digit drops, according to the United Nations World Tourism Organization (UNWTO).
For MENA economies, already struggling with high unemployment and difficulties competing in the global economy, the drop in tourism has been particularly hard. In Tunisia, the industry accounts for about 8% of the economy and provides about 400,000 jobs when times are good.
Surprisingly, the biggest increases occurred in countries still suffering varying degrees of political turmoil and concerns about the growing power of Islamists, according to STR.
STR said occupancy rates soared 91% in Egypt, a figure backed up by official tourism data which shows that tourist arrivals to the country rose 32% in the first quarter from a year ago to 2.5 million even as the country copes with political unrest and violence, particularly in the Sinai Peninsula, the home of some of its most popular resorts.
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