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Jordanian hotel managers must consider the costs …

Hotel managers in Jordan hold the keys to tourism in their hands. While compelled to make reasonable rate increases due to rising energy costs “… hoteliers must not increase their prices to the point where they kill the goose that lays the golden egg …” advises Munir Nassar, the former tourism minister and executive board member on the Jordan Inbound Tour Operators Association (JITOA).

In an article concurrently appearing in the May 12, 2008 edition of the Jordan Times and Zawya.com, Mr. Nassar warns that hotels may cause tourism in the Hashemite Kingdom to loose its price competitiveness in the world markets, pointing out:

“… while some hotels in Jordan have already raised their 2009 prices from 19 percent to 24.5 percent, a reasonable measure under the circumstances. However there are other hotel properties especially in the Dead Sea and Petra that belong to international chains, and have raised their rates by as much as 70 percent increasing to 100 percent in some cases.

Such hikes are not justified especially in view of the huge increase in occupancy, which increased by as much as 100 percent and 125 percent in many of the classified hotels in Amman, Wadi Musa, Aqaba and the Dead Sea in the first three months of 2008. This upward trend is expected to continue well into 2009 and beyond, according to the World Tourism Organization and the World Tourism and Travel Council.”

Considering that the tourism sector accounted for more than 13 percent, or $2.11 billion of Jordan’s gross domestic product 2007, losing shares to competitive destinations such as Egypt, Turkey, and even Syria could be as Munir Nassar asserts:

“… disastrous for Jordan’s national economy …

… that inbound tourism as an export industry generating hard currency from international visitors vital to the domestic economy will [also] be hurt.”

With a number of tour packages to Egypt and Turkey already selling at cheaper rates to similar Jordanian tour packages due to lower airfares, over-the-top increases in hotel prices are already generating some complaints from tour operators – recently when advised by the JITOA of the recent rate increases. So much so that Mr. Nassar points out along with said complaints:

“… major inbound tour operators, who account for up to 80 per cent of the tourism business …

are actively considering reducing the number of pages in their brochures dedicated to Jordan as a holiday destination, while still others are threatening to stop selling Jordan completely because they will cease to generate enough bookings to justify their marketing and administrative costs.”

This is in part due to to the pain inbound tour operators feel when forced to pay out-of-pocket for existing travel contracts due to some of the sudden price increases in hotel stays, as well as diesel fuel related rates imposed last February by the tourist transport companies.

a view of Petra's treasury that Indiana Jones didn't seeAnd as Munir Nassar points out, it is not just inbound tour operators impacted by steep increases in hotel prices, but also a large number of Jordanians who directly or indirectly earn their living from inbound tourism – more so than any other economic activity in Jordan. This includes bus companies, restaurants, taxi drivers, souvenir shops, the 600+ licensed tour guides, and the 32,000 other individuals whom cumulatively have also contributed to the Hashemite Kingdom having already achieved its tourism receipts target three years sooner than planned; despite the overall slump in Arab and Gulf tourism as reported by ArabianBusiness.com.

As Mr. Nassar concludes:

Let us be very clear. We are not against hotels increasing their earnings. All we call for is a reasonable increase that will not inhibit growth in the number of visitors to Jordan. We also want to avoid being described as greedy and opportunistic.

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