1. Challenges and Opportunities of Tourism Development in the Middle East and North Africa Presentation by Amr Abdel-Ghaffar Regional Director for the Middle East World Tourism Organization President UNWTO- Themis Foundation Inaugural Australia Arab Business Forum & Expo Melbourne 5-6 May 2011

2. High potential for tourism in the region Stunning landscapes, extensive coastline, with associated marine attractions Holy shrines drawing millions of religious tourists and pilgrims Many historical, archaeological and heritage sites related to different civilizations and religions Vibrant Arab societies and cultures …………………………………………………………………………………………………………………  Cultural and religious tourism  Eco and nature based tourism, desert tours, mountain trekking, adventure tourism, rural tourism, cruising, yachting, diving…  Special interest: festivals, sport events, conferences, exhibitions, medical, spa and wellness tourism…

3. MENA’s Outstanding Performance Leaping from 35 to 79 million arrivals in a decade Arrivals up 14% (2010). Receipts: 51 billion US$ (2009) Region’s market share doubled Tourism affected by geo-political environment in first months of 2011 Industry’s resilience to external shocks

4. World Inbound Tourism

5. Inbound Tourism MENA Middle East North Africa 60 mn

6. Source: UNWTO Average Annual Growth Rate

7. The Region’s Present Tourist Map (million) 9,288 1,912* 142* 14,051 420* 6,902 127**** * 2009 data; ** 2007 data; ***2005 data 4,935** 10,896* 434* 948* Palestine 396* 4,557 7,126*** 1,659* 297 * 2,168 8,546

8. Outbound Middle East to Asia-Pacific Growth 2000-2009

9. Outbound Middle East to Asia-Pacific for 2009 Main destinations

10. Outbound Asia-Pacific to MENA Growth 2000-2009

11. Distribution of Outbound Tourism from the Middle East To the Middle East (intraregional) 25 million (76%) To other regions (interregional) 8 million (24%) Data for 2009*

12. Geo-political environment and perception Safety and security Sustained economic growth Soaring oil prices Strong pent up demand KEY DEVELOPMENT DRIVERS

13. Better access Investment incentives Product development and diversification Increased marketing activity Institutional development and public-private partnership (Cont.) KEY DEVELOPMENT DRIVERS

14. Impact of the Political Environment on Tourism North Africa Most severely impacted; hotel occupancies down over 70% in February, over 60% in March Egyptian tourism - estimated loss of over US$1 billion in international tourism receipts in first months of 2011 Tunisia – estimated loss of 1.8 billion dinars (US$1.32 billion) in foreign currency Morocco – losses due to cancellation of charters from Europe; protests in February caused drop in occupancies to 30% in March; 40% drop in bookings March-May Libya – tourism at standstill Levant Lebanon, Jordan, Syria, Yemen - also impacted due to fall in intra-regional traffic; ongoing travel advisories will impact inbound tourism Syria and Yemen – unrest continues; will further impact tourism sector GCC countries With the exception of Bahrain, GCC countries witness relatively low impact Some gain due to redirected tourist traffic, MICE events UAE seen to be key beneficiary – trade and tourism

15. Impact on ongoing and planned investments Accommodations sector continues investment, looking at long term opportunities in MENA Despite some cancellations and delays, Middle East/Africa hotel development continues; 429 hotels totaling 118,338 rooms in pipeline. Over US$6 billion worth of hotel projects, mainly in UAE, Qatar and Saudi Arabia, due for completion by 2013 Major worldwide hotel chains committed to regional expansion – Marriott, Hilton, Hyatt, Rocco Forte, Kempinski; regional hospitality groups also pursuing growth – Rotana, Jumeirah Group, Hospitality Management Holdings Airports expansion plans continue In Middle East, airport projects valued at US$90 billion over next few years In Africa, value of airport projects includes US$817 million in Egypt and in Tunisia, over US$270 million in Libya and US$545 million in Morocco; however, current status unknown Other developments Billions of dollars worth of rail projects under construction or in pipeline in GCC Saudi Arabia expanding existing rail network; building new high-speed rail link between Mecca and Medina UAE launches Etihad Rail to connect its seven emirates, and link UAE to Saudi Arabia and to Oman Qatar also has plans to develop a national rail network; Oman will link key cities by rail Also, a GCC-wide railway network planned to link the Gulf countries Qatar wins rights to host 2022 World Cup; earmarks US$50-60 billion in investments to deliver needed infrastructure services

16. Outlook for 2011 Uncertainty over scope, outcomes and impact of ongoing political events Caution and optimism UNWTO initially forecasts 7-10% growth (highest among all world regions) Forecast likely to be adjusted in year's course

17. International tourist arrivals (million) 2010 935 2020 1,600 Promising Global Prospects

18. Growth prospects of tourist arrivals in Middle East- North Africa (in million) … And in the MENA Region

19. Challenges Competition Finance Technology Sustainability Quality

20. STRATEGIC SIGNALS Investing in innovation and technology Incorporating local communities in planning and operation Improving PPP structures and creating value Investing in the green economy Improving education and training Raising host-tourist awareness More focussed and increased marketing and promotion

21. Challenges and Opportunities of Tourism Development in the Middle East and North Africa Inaugural Australia Arab Business Forum & Expo Melbourne 5-6 May 2011 Presentation by Amr Abdel-Ghaffar Regional Director for the Middle East World Tourism Organization President UNWTO- Themis Foundation