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Morocco: Morocco Tourism Profile

2012/01/28

Travel and Tourism in Morocco

Tourists flow is sluggish but increasing despite setbacks

There were a lot of factors that negatively affected the increase curve of tourism in Morocco in 2012. The major ones were the Eurozone crisis affecting nations representing Morocco’s potential customers; the result of the Arab Spring and the manifestations led by the “20 February” movement; and the terrorist bombing in one of Morocco’s most attractive cities (Marrakech). However, even with all those events, the number of arrivals to Morocco in 2012 managed to post increase of 1% compared to 2011. French and Spanish tourists represent the major chunk of tourists visiting the country. Additional Russians chose Morocco instead of Egypt, due to its political instability.

A shift toward new business opportunities

Whilst Morocco is traditionally perceived as a leisure tourist destination, the country is as well becoming a goldmine for European investors willing to expand their businesses, benefitting from the cheap labour force and from the government and custom authority’s low entry barriers. Business tourism is positively correlated with higher spending and a lot of companies and agencies are starting to take chance of this opportunity by offering new packages dedicated to visitors who come to Morocco for business purposes. Next business meetings, investors tend to be interested to know about the culture and traditions of the country in which they are or will be operating. This can be positively correlated with offering packages that, not only include accommodation in hotels, but as well sports programmes like skiing, hiking in the Atlas Mountains and playing golf in some of the best green areas in the kingdom.


Moroccan infrastructure, work in process:


As communicated in his royal speech, his majesty the king Mohammed VI directed the government to allocate higher budgets to the Ministry of Tourism to improve infrastructures in the major cities of the kingdom such as Casablanca, Marrakech, Fès and Tangier. These are all very large cities and they are the target of a lot of tourists, due to the fact that they are imperial cities holding a large range of interesting historical monuments and museums. However, there are some small cities in Morocco that as well have touristic potential such as Ouzoud (with its waterfall), Chefchaouen, and Imi-nifri. These smaller cities are becoming a fertile land for Moroccan small businessmen who aim to seize upon market opportunities, broaden the touristic field in Morocco and offer a different experience to tourists who come from different parts of the world.

Accommodation, different expansion plans undertaken:

Morocco is aiming to attract additional than 16 million tourists by 2020. The number of outlets is unable so far to accommodate that a lot of tourists. However, year next year the number of outlets and hotels is increasing. For Marrakech, considered the majority attractive city by international tourists, a lot of luxury hotels opened in 2012, but new tendencies are as well flourishing: low-quality and cheaper priced hotels. Luxury hotels in 2012 represented an approximately 6% market share. In 2012, two Ibis establishments and two Novotels began construction and will open by 2014. Sofitel is planning as well to open new hotels in Casablanca and Agadir.

Morocco is still ambitious with its “Vision 2020”:

Next its plan for 10 million turists by 2010, Morocco is raising the challenge to reach a higher number of tourists by 2020. This vision includes a lot of strategies that the Moroccan government came up with in order to improve tourism. The number of tourists coming to Morocco in2013 is expected to exceed 10 million tourists as the euro crisis and the political instability effects starts to vanish from the Moroccan scene. Vision 2020 includes projects to improve the infrastructure of the country, building new roads and airports to facilitate access to touristic attractions and building additional hotels and resorts to cover the expected increase in the number of tourists, which is expected to exceed 16 million by 2020. The major challenge if not a constraint is the fact that Moroccan banks are suffering from a lack of liquidity, although there are a lot of foreign investors from Gulf nations like the United Arab Emirates, Kuwait and Saudi Arabia who have started contributing and investing in building new tourist attractions. This would not have been possible without the intervention of King Mohammed VI who did a business tour over different Middle Eastern nations conveying with him troops of Moroccan businessmen on that tour.

Apr 2011

According to the majority recent data available from the Ministry of Tourism, for H111, a total of 4,202,241 tourists visited Morocco in the first months of 2011, an increase of 6.3% y-o-y. This increase occurred even against a backdrop of unrest across the Middle East and North African, marked by regime change in Tunisia, Libya and Egypt, and with Morocco as well experiencing a short-lived outbreak of violence in February 2011. Tourists were as well seemingly not been deterred by the suicide bomb attack on a popular tourist café in Marrakech in April 2011 that killed 16 people.

Given the strong H111 figures, our base-case scenario is for another positive year for inbound tourism in 2011, with an increase of 8% in arrivals likely, although we stress that this is dependent on the November 25 2011 elections passing relatively peacefully. Tourist arrivals should surpass the 10mn mark for 2011 as a whole.

Supporting Moroccan tourism in the years ahead are the national Vision 2020 strategy (see below) and the ongoing Plan Azur resort development programme. By the end of our newly extended estimate period in 2016, we believe Morocco will be welcoming over 14mn tourists and earning about US$8.8bn in annual tourism revenue. However, another attack in Marrakech or an increase in domestic political unrest could act as a downside risk to these figures.

A Country With Long-Term Tourism Potential

Foreign investment continues to flood into Morocco’s tourism sector. A lot of international hotel chains continue to build new resorts across the country and the development of the Mediterranean coast should prove a particular draw to investors wishing to gain exposure to the tourism and property sectors. Foreign airlines are adding new routes to the country and the strong priority given to tourism by the government is another supportive factor.

Some golf and beach properties under construction in Morocco rival those in nearby Spain but cost much less to purchase. Morocco’s proximity to Europe - with flight times from the UK to the Mediterranean coast of about three hours on low-cost carriers - and its reputation as a fairly progressive and democratic Islamic country are pluses for investors considering Moroccan tourism.

Taking into account the country’s high level of literacy and the government’s commitment to improving training standards across the hospitality industry, BMI believes amount the ingredients are there for Morocco’s tourism industry to continue to make great strides in the years approaching.

Royal Air Maroc Looking To Cut Costs Despite the upbeat outlook for the wider tourism sector, Moroccan flag carrier Royal Air Maroc remains in fairly dire financial straits at the time of writing, with media reports indicating that the airline is losing about MAD80mn per month because of high staff and fuel costs and the political uncertainty across North Africa.

The airline is carrying out a rationalisation programme to cut costs and boost profitability. In August 2011, union workers approved a wide package of measures, which included refocusing the company’s operations at its Casablanca hub, the sale of 10 aircraft and reducing staff by about 1,560 people between 2011 and 2013. In early September 2011, the airline said 535 people had already applied for voluntary redundancy.

Location chance?

Morocco is at a crossroads between the East and the West, both culturally and geographically. Historically, its proximity to Europe has meant that a lot of nations in Europe are key source markets for Morocco’s tourism, starting with France, which has had a longstanding political presence in Morocco. From now on during the economic downturn in 2009, having Europe as a source market proved detrimental to tourism receipts and spending. Morocco has since then, and even somewhat before the crisis, started looking at additional lucrative source markets such as Gulf Cooperation Council (GCC) nations, and this may prove beneficial during the estimate period. And currently, new challenges stemming from Morocco’s location in the Middle East and North Africa (MENA) amidst a tormented region are as well arising.

Fast-moving air transportation

Since 2006, Morocco has liberalised its air transportation, which led to the market entry of several low cost carriers including easyJet, Ryanair, Jet4U and Atlas Blue – not to mention Air Arabia, which established a hub in Morocco. This has meant new opportunities to expand the tourism industry, but as well introduced a key challenge to major Moroccan corporation, Royal Air Maroc. The company bought Atlas Blue in a failed attempt to have its own LCC arm, and is now planning to purchase Jet4U in order to make things right and compete entirely in this market.

Targeting luxury, from now on serving budget

Morocco is being targeted by a myriad of world investors for the development of its travel accommodation. A vast majority of the new and upcoming supply of hotels is expected to be in the 4- and 5-star category, thus boosting the country’s luxury infrastructure. Nonetheless, with the expansion of low cost airlines and hence the potentially growing budget market, there are opportunities for amount to take chance of the increase that is taking place. Whilst luxury operators may start to look at a new clientele, budget operators may want to target European tourists – still suffering from the impact of the slowdown.

Becoming a spa destination

In recent years, Morocco has moved towards a positioning as a spa destination, having added a number of new resort and hotel spas amongst which is the world-famous Senses, which came to Baglioni in Marrakech. Morocco as well has an Angsana spa and a large number of international hotel chains amount having their own spas as well. This country has a history of therapeutic know-how, notably with thalassotherapy, and this has facilitated the task of positioning Morocco as a spa destination. There are a large number of projects in the pipeline including spas and it is likely that Morocco will succeed in this arena as it is as well competitively priced compared to other notable spa destinations such as Dubai in the Arab world or the Czech Republic in Europe.

 

Government to launch Vision 2020 in 2010

Vision 2010, a strategy to develop tourism within Morocco, is to be restored by Vision 2020 in 2010. The new initiative is set to be a continuation of the original strategy, which has greatly assisted in opening-up Morocco’s tourist offering and created a lot of new tourism projects within the country. The often-stated aim of Vision 2010 was to attract 10 million visitors to the country by 2010, but the world economic slowdown has put a brake on before high increase rates. Vision 2020 is expected to move away from the development of the tourism infrastructure and focus increasingly on the integration of tourism services, inclunding the enhancement of the tourist experience. The training and development of local staff is as well expected to be a priority.

Low cost flights taking-off

Low cost carriers operating to and from Morocco have dramatically increased in number since the Open Skies agreement with the EU was signed in 2006.There are three Moroccan low cost airlines in operation, inclunding numerous large name European competitors. These airlines have transformed transportation options to and from Morocco, opening-up the country as a destination from numerous cities throughout Europe. In particular, local airlines have targeted European destinations with a high Moroccan people such as Paris, Lille, Milan, Brussels and Amsterdam.

Moroccan hotels ready for tougher competition

Moroccan hotels are set to enjoy healthy competition in the short term. A large number of international chains are entering the country for the first time, with a lot of outlets scheduled to open in 2010 and 2011. The hotel category is ripe for a shake-up, with the leading player Accor-Risma SA, enjoying a relatively unchallenged position for a lot of years. Whilst Accor-Risma’s leadership is unlikely to change as it has a lot of outlets suitable for varied holiday budgets, the introduction of new, but globally renowned names will provide additional choice for customers, and increase the focus on service levels for amount hotels in the country.

Related Reports: Morocco Tourism Analysis 2011