Pandemic will ruin Middle East’s 2020 tourism economy

While the coronavirus spread could not have been predicted, it’s plainer to see that governments around the region have been caught off-guard.
Sunday 15/03/2020
Beirut’s seaside corniche, or waterfront promenade, along the Mediterranean Sea, seen almost empty of residents and tourists in Beirut, March 12. (AP)
Looming difficulties. Beirut’s seaside corniche, or waterfront promenade, along the Mediterranean Sea, seen almost empty of residents and tourists in Beirut, March 12. (AP)

The spreading coronavirus means the Middle East’s tourism industry can expect 2020 to be a disaster year.

Tourism plays an outsized role in the economies of many Middle Eastern countries. From Morocco to Iran and from Oman to Turkey, the region is awash with cultural heritage sites, sandy beaches and markets for business travel.

When the Arab uprisings exploded nine years ago, the effect on regional tourism was devastating, costing the countries involved a combined $15 billion, the Arab Tourism Organisation said. The “long autumn” that followed those tumultuous days had just begun to lift.

Turkey is coming off major tourism difficulties wrought by a series of terrorist attacks, a failed coup in 2016 and broader political instability, including a major diplomatic spat with Russia in 2015 over its shooting down of a Russian jet, that resulted in its tourism trade taking a significant battering.

The spreading coronavirus saw Saudi Arabia suspend pilgrimages to Medina and Mecca and temporarily close many religious sites. However, with international travel expected to fall for the foreseeable future, it could cost the kingdom a large slice of its $70 billion tourism economy.

Countries such as Jordan and Lebanon, where tourism is worth 7% of the GDP, making it a leading source of income, are already suffering a fall-off in early spring tourism activity.

Chinese visitors, many on shopping trip packages, ordinarily make up 6% of the United Arab Emirates’ tourism industry. However, a report by US cable news outlet CNBC stated that “data from Dubai’s Tourism and Commerce Marketing department showed 291,662 Chinese travellers visited the desert emirate in the first quarter of 2019; retail analysts expect the majority of that to be lost this quarter.” With flights grounded between the two countries, the Emirates is likely to be feeling those effects.

Egypt’s $16 billion tourism sector will suffer a dramatic fall in Western tourists, as will holiday venues across North Africa.

After a 17% jump last year where the tourism industry is worth $34.5 billion, Turkey, despite not having recorded a single coronavirus case until March 10, is set to be worst hit. The threat is not lost on officials.

Turkish Health Minister Fahrettin Koca said: “Europe is very late in taking measures and it is still being too slow. It is highly likely this outbreak is currently in Turkey.” He was proven right two days later when Turkey’s first COVID-19 case was announced.

The big outlier is Iran, one of the first countries outside China to report a major outbreak, which was centred on the city of Qom. However, is Iran reporting accurate infection rates — officially at fewer than 300 fatalities and 8,000 infections? Does it have the ability to meet the crisis head-on? All signs suggest it does not have the resources to do so.

Then there’s Syria’s Idlib province, where hundreds of thousands of people are living in squalor and are highly dependent on international medical aid.

What’s more, it’s not only hotels and travel agencies that will feel the squeeze. From segments of the food supply chains, such as farmers, to tourism industry employees to private transport companies, the effects of the coronavirus will be far-reaching.

How long is it set to last?

Experts say countries deploying aggressive public health detection and prevention tactics face at least eight weeks before they can think about returning to any sense of normality. However, the consequences will linger for months to come and may trigger region-wide or world-wide recessions.

By contrast, during the 2003 SARS outbreak, which saw 8,000 people infected with a different form of coronavirus, the global tourism and travel industries lost an estimated $30 billion-$50 billion. The current COVID-19 outbreak has seen 110,000 people infected and is expected to spread precipitously in the coming weeks.

What makes Middle Eastern tourism particularly susceptible to the after-effects of the epidemic is that many governments failed to establish rainy day funds.

Italy and the United Kingdom have taken, or plan to take, measures such as suspending mortgage and other payments to help people cope with outbreak-associated economic difficulties. In countries such as Lebanon, Iran and Syria, however, governments don’t have the funds to help break the fall for their citizens.

While the coronavirus spread could not have been predicted, it’s plainer to see that governments around the region — and the wider world — have been caught off-guard, in part because of a failure to look ahead and put aside funds for crisis scenarios. “Black swan” events such as this outbreak may be impossible to predict but nonetheless are likely to always present a threat.

Areas first affected by this crisis — China, Singapore and Hong Kong to name a few — will be the first to exit and recover and, in that, there’s some light at the end of the tunnel.

However, the crisis presents bigger questions for governments in the region: how to plan for the unexpected. As we all know, bad economies make for angry citizens and the increased potential for widespread unrest.