Why Tunisia is ripe for hotel development

Image of Sidi Bou Said, Tunisia: ©iStock / efesenko.

The Foreign and Commonwealth Office in the UK has changed its advice on Tunisia, opening the country up to Brits again and bringing it into line with several other countries—including the U.S., France, Italy and Germany.

Changing the advice is the easy part. The harder part will be convincing the British visitors Tunisia lost to rival Mediterranean destinations, including Spain, to return.

The FCO said that since the terrorist attack in Sousse in June 2015, in which 38 tourists were killed, the UK government had been “working closely with the Tunisian authorities to investigate the attack and the wider threat from terrorist groups. The Tunisian government has improved protective security in major cities and tourist resorts.”

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The FCO still warned against travel to the south and west of the country, where it borders with Libya and Algeria respectively. “Terrorists are still very likely to try to carry out attacks in Tunisia,” the Office said in a statement. “Security forces remain on a high state of alert in Tunis and other places. You should be vigilant at all times, including around religious sites and festivals.”

A state of emergency is currently in effect in Tunisia, having imposed in November 2015 following a suicide attack on a police bus.

“The Foreign Office came to the conclusion that it is again safe to travel,” Peter Fankhauser, Thomas Cook CEO, told analysts at the company’s third-quarter results. “We are setting up a really good-quality offer for Tunisia and this is going to take some time. I suppose that we are going to start during the winter season, but more towards the spring.”

“We are delighted to receive this news still in time for last minute summer holiday bookings and the winter season,” Mounira Ben Cherifa, director, Tunisian National Tourist Office in the UK, said. “We will be communicating with all of our tour operators to see how quickly we can get airlift reinstated.”

Tunisia’s Numbers

The organization reported that Tunisia recorded 2,833,781 tourist arrivals, up 29.4 percent on the year for the period from January 1 to July 10. European tourists accounted for 17 percent of total arrivals, but saw a 22.7-percent increase. France ranked first with 228,094 tourists, up 43.1 percent, followed by Germany (67,912 tourists) and Italy (40,113). The British also returned to Tunisia, with 11,955 arrivals reported, despite the FCO advice.

According to a report by the Central Bank of Tunisia, tourism revenues at the end of April 2017 posted a slight increase of 5.2 percent, compared to a 46.4 percent increase in non-resident inflows. Tourism revenues amounted to Dinars 491 million, below 2015’s Dinars 783 million.

As the Mediterranean recovers from the spate of terror attacks, competition for visitors is set to rise, with Tunisia having been left behind while countries such as Spain have taken advantage of their safe status to attract guests, with RevPAR rising alongside. Spain’s hotel operators have taken the opportunity to upgrade their offerings, attracting higher-paying guests.

Thomas Cook gave hope to hoteliers in Tunisia, reporting that Turkey, where the tourism sector was adversely affected by political instability, terrorist attacks and coup attempt in 2016, was making a strong recovery since stabilizing. “The pick-up in demand for Turkey we reported earlier in the year has continued, as customers are attracted to the quality and value on offer,” the CEO said.

Fankhauser added that Thomas Cook was “experiencing pressure on margins to Spain in what is a competitive environment.” If demand can be buoyed for Tunisia, operators and hoteliers alike can benefit.

Katherine Doggrell is an editor at Hotel Analyst, the U.K.-based news analysis service for hotel investors.