Terror, taxes hinder Jordan tourism sector

Sunday 22/01/2017
Tourists visit the ancient city of Petra in Jordan, on May 9th, 2016. (AFP)

Amman - Fears that Jordan’s tour­ism industry could de­cline this year following the December 18th attack on Karak Crusader Castle were brushed aside by government officials but workers in the tourism sector remained deeply sceptical.
Jordanian Minister of Tourism Lina Annab stressed the resilience of the tourism sector, saying it had cushioned itself from the repercus­sions of militant attacks with few signs of a significant drop in tourist arrivals.
“It’s business as usual and the cancellations have been minimal. Unfortunately, as for danger there is no place that is 100% safe,” An­nab said in a statement.
She said revenues were stable at $4 billion in 2016 against the pre­vious year with 3.8 million foreign visitors spending at least one night in the country, a rise of 2.6% from 2015.
Officials said the kingdom has drawn larger numbers of tourists from Gulf Arab states in recent years and they have made up for a drop in package tours by European operators.
Tourism expert and owner of the tourism company Skygate Tours Murad Ghsoun is less confident, however.
“In the global tourism environ­ment, any terrorist attack might have a negative effect on the econ­omy as a whole and not only on tourism,” he said. “We are in this industry and we depend on it and we know when things are bad or not and so far we are suffering.”
Ghsoun argued that, in most cas­es, countries had to take unprec­edented security measures after terror incidents but he said he was positive that the need for upgraded security would not scare away visi­tors. “Jordan remains a safe place for tourists and will always be no matter what has happened,” he in­sisted.
More than a dozen people, in­cluding a Canadian tourist, were killed in two attacks by Islamist militants in December in the south­ern city of Karak. Islamic State mili­tants claimed responsibility for the violence.
Three American servicemen were killed by a Jordanian guard in November. Washington issued a travel warning to Americans trav­elling to Jordan because of threats from militant groups. Jordanian of­ficials criticised the warning as un­necessary.
Travel and tour operators said they are concerned about govern­ment plans to introduce a 16% sales tax, which was announced by An­nab at the end of last year. The tax enforcement was supposed to go into effect in mid-January but it was delayed due to the controversy around it.
“If the government insists on forcing the tax the whole sector will suffer and as tour operators working in this field for decades we will start looking for other options to make ends meet,” Ghsoun said.
“This sector has been suffering a lot lately and we do not need addi­tional challenges to deal with. The profit margin is really low and with this new tax we will be out of busi­ness. The government should re­think the decision.”
Ghsoun explained that the sales tax on tourism will be applied on outbound tourism, stipulating a 16% rise in the cost of travel outside the kingdom and, consequently, travel offices will charge 16% more for their services.
Former parliament member Am­jad Msalamani slammed the move as “unacceptable” and “not well-studied”, cautioning against ad­verse repercussions.
“It adds more (financial) burden on travel agents who work only 90 days in a year. It will merely con­tribute to making more than 2,000 employees unemployed,” Msala­mani said.
“This will happen sooner than expected as many will have no oth­er choice but to close their offices, lay off employees and move some­where else or work online. Is this what we really want to happen to a sector that is already suffering?”
Shifting the operation online re­quires merely obtaining licences from the ministries of Industry, Tourism and Endowment — the latter in case of tour operators or­ganising travel to Mecca — but no registration. They will then not be obliged to follow the ministries’ regulations, including the sales tax law.
Experts argue that tour operators will eventually have to charge more for their services, which will affect the performance of the tourism sector. Jordanians will think twice before travelling or visiting tourist sites and operators will be forced to compete in a smaller market by lowering prices while bearing high­er overhead costs.
Tourism is one of the Jordan’s main sources of foreign currency and constitutes around 10% of the country’s gross domestic product. Investors have poured billions of dollars in the past decade into a string of hotels across the country.