Overview
The Middle East and North Africa (MENA) region significantly improved its T&T competitiveness since the last edition of the TTCI. With 12 of the 15 MENA economies covered by this year’s index increasing their score compared to 2017, the region was able to slightly outpace the global average in competitiveness growth. This is particularly important given that, in the aggregate, T&T accounts for a greater share of regional GDP than in any of the other four regions. MENA is also the only region where international visitor spending is greater than domestic visitor spending. Yet despite improved competitiveness and a strong reliance on T&T for overall economic growth, MENA continues to underperform the global TTCI score average.
MENA’s below-average competitiveness is primarily a result of low scores on indicators related to natural and cultural resources and international openness. The region’s historical and religious heritage and geographic features create the potential for significant natural and cultural tourism; yet, while some individual nations come close, no MENA country scores above the global average for natural resources and only Egypt and Iran score above for cultural resources. In fact, the entire region’s score in both of these areas has fallen in recent years. More needs to be done to expand habit protection and heritage sites. Moreover, digital demand for MENA’s natural, cultural and entertainment demand is fairly low, indicating potential gaps in marketing and traveller perceptions. One potential reason for this gap is continued safety and security concerns. Eleven MENA countries rank within the bottom 40 for terrorism incidents, with two among the worst 10 countries globally. Further, the region is plagued by geopolitical tensions, instability and conflict. Security concerns also play a role in why MENA members are some of the most restrictive when it comes to international openness, with only Qatar, Oman and Morocco making significant improvements. Consequently, travellers often face barriers when visiting the region, while the aviation and overall T&T sector is stifled by limiting bilateral air service and regional trade agreements.
More positively, stability, safety and security have started to recover throughout the region, slightly reducing travel fears and underlying one of the key reasons for the recent pickup in arrivals. Furthermore, it seems that there has been greater recognition of T&T’s importance, with broad regional improvements in T&T prioritization, including increased government funding and more effective marketing campaigns to bring back or attract new visitors. Greatly enhanced environmental sustainability also has the potential to pay dividends for natural assets (note that environmental sustainability comparison is influenced by the use of new data to measure marine sustainability). In addition, prices have become more competitive among countries within the region, amplifying MENA’s single biggest advantage relative to the global average. As one of the world’s main producers of fossil fuels, MENA includes some of the world’s lowest fuel prices, with some governments offering subsidies. Moreover, many of the region’s economies offer visitors greater purchasing power (especially Egypt, Algeria, Iran and Tunisia), which has been increased by lower exchange rates. Yet it is reductions in ticket taxes and airport charges as well as lower hotel prices that have primarily driven regional price competitiveness in recent years.
Infrastructure has also improved, with particularly impressive growth in the number of airlines and route capacity. Despite these gains, world-class infrastructure remains concentrated among the Arab states of the Persian Gulf. The Gulf countries have been able to use their natural resource wealth, central geographic location and relative security to develop world-class T&T infrastructure, defined by quality airports, ports, roads, tourist services and some of the world’s leading airlines. These efforts are in stark contrast to some other MENA nations that—due to a lack of investment and ongoing instability—have yet to develop competitive infrastructure, especially regarding air transport. Similarly, the region’s above-average score on the Enabling Environment subindex is due to the performance of the Gulf countries and Israel, which have developed economies, strong business environments, ICT readiness and some of the highest scores in safety and security. Finally, most regional economies also score near the bottom when it comes to female participation in the labour market, depriving the T&T industry of a greater labour and skills pool.
Subregion Analysis
The Middle East subregion is by far the more competitive of the two subregions, outscoring North Africa on nine pillars. Thanks to the Arab states of the Persian Gulf and Israel, the subregion is wealthier and more developed than the North Africa subregion. Consequently, it is no surprise that the Middle East scores above the global and regional averages on indicators related to enabling environment and infrastructure, with particularly high ranks on ICT readiness and business environment. Nevertheless, the subregion does trail the world and North Africa on T&T prioritization and policy and natural and cultural resources. In particular, many Middle East nations score relatively low on the International Openness and Natural Resources pillars, which represent the subregion’s greatest disadvantages relative to global competition. One of the Middle East’s highest-scoring pillars is Price Competitiveness, with some economies leveraging their fossil fuel abundance to offer lower fuel prices. Since the 2017 edition of the report, the subregion has improved across all pillars of T&T policy and enabling conditions, safety and security, ICT readiness and much of infrastructure, but declined or stagnated on other pillars.
This year, eight out of the subregion’s 11 members improved their TTCI score since 2017. Oman demonstrated the greatest improvement, moving up eight places to 58th. MENA’s safest (3rd) country recorded the subregion’s fastest improvement for its human resources and labour markets (103rd to 65th), and is among the most improved when it comes to international openness (116th to 97th), environmental sustainability (109th to 57th) and overall infrastructure (60th to 52nd). Yet some of the improvement in environmental sustainability is exaggerated due to new marine sustainability metrics. In contrast, the UAE had the Middle East’s largest decline, falling from 29th to 33rd, including the biggest percentage decline in score on the Safety and Security pillar (falling from 2nd to 7th) and Ground and Port Infrastructure (19th to 31st) and the subregion’s only decline on Environmental Sustainability (40th to 41st). Nevertheless, the country remains in the lead in the Middle East and is MENA’s top TTCI scorer, leading on ICT readiness (4th), air transport (4th) and tourist service (22nd) infrastructure. The Middle East’s—and MENA’s—largest T&T economy is Saudi Arabia (69th), which scores above the subregion’s average on most pillars, but near the bottom on international openness (137th). Plagued by ongoing conflict and a lingering humanitarian crisis, Yemen (140th), ranks at the bottom of the global index.
North Africa scores lower than the Middle East, but demonstrates far greater improvement in overall competitiveness. The subregion outscores the Middle East on five pillars and bests the global average on four. North Africa is the most price competitive subregion in the world, with three out of its four members among the 12 least-expensive economies covered in the report. North Africa’s greatest advantage relative to the Middle East is its natural and cultural resources—although it still underperforms the world on both the Natural Resources and Cultural and Business Travel pillars. The subregion also bests the MENA average in prioritization of T&T and environmental sustainability, areas where it has improved since 2017. On the other hand, North Africa has underdeveloped infrastructure and T&T enabling environment, contrasting some of the high performers in the Middle East subregion. In particular, North Africa trails when it comes to tourist service infrastructure and ICT readiness. The subregion’s strong rate of improvement is due to enhanced safety and security, overall T&T policy and enabling conditions and air transport and ground infrastructure.
All four members of the North Africa subregion increased their TTCI scores over 2017. Egypt (65th) is the subregion’s top scorer and its largest T&T economy. The country is also MENA’s most improved scorer. Egypt is price competitive (3rd) and has MENA’s highest score for cultural resources (22nd). Its improvement comes from increases on 11 pillar scores. These include the world’s second-best enhancement of safety and security (130th to 112th), albeit from a low starting base. Morocco (66th) demonstrates North Africa’s slowest improvement in TTCI performance. The country is a close second to Egypt when it comes to overall competitiveness, boasting the MENA region’s top TTCI scores on natural resources (63rd) and North Africa’s best enabling environment (71st) and infrastructure (69th). However, TTCI performance improvement is tempered by declining safety and security (20th to 28th), which remains well above the subregion’s average, and a deteriorating combination of natural and cultural (41st to 54th) resources. North Africa’s lowest scoring member is Algeria (116th), which nonetheless did move up two ranks globally. The country ranks low on business environment (118th), T&T prioritization (132nd), tourist services infrastructure (136th), environmental sustainability (133rd), natural resources (126th) and international openness (139th). On the other hand, Algeria is one of the most price-competitive countries in the world (8th).
Selected Country/Economy Analysis
The United Arab Emirates remains MENA’s highest-scoring economy, ranking 33rd globally. The country has the best overall enabling environment in the region (17th), with the highest score for this subindex of any country outside of Europe, Asia-Pacific and North America. The UAE has a very good business environment (9th), human resource and labour market (26th) and safety and security conditions (7th), and is gaining momentum on ICT readiness (15th to 4th). Consequently, the nation has favourable conditions for T&T investment and growth. However, the UAE’s biggest edge over average regional competition is its infrastructure, which ranks 13th globally. The country’s central location between Europe and Asia, strong business environment and government investment has allowed it to turn into a major global aviation hub, with the fourth highest Air Transport Infrastructure pillar score in the rankings. The UAE also boasts high-quality roads (9th) and ports (9th) and improved tourist service infrastructure (27th to 22nd). As a regional business and transport hub, the UAE also attracts business travellers, encouraging international association meetings (41st). Combined with several oral and intangible heritage customs (21st), the country scores relatively well when it comes to cultural resources (45th), essentially matching the global average.
Despite the UAE’s clear advantages it still dropped four ranks in 2019. The country ranks low on natural resources (103rd), with no World Heritage natural sites, and a relative lack of wildlife (118th), which might explain the reduction in natural environment as a reason for tourist arrivals (40th to 63rd). Additionally, while the UAE ranks 8th in terms of the effectiveness of its tourism marketing, that still represents a fall from 2017, with online country brand strategy and searches for its natural and cultural assets ranking 126th, 122nd and 116th , respectively. Perceptions of government prioritization of T&T have also declined (1st to 21st), indicating potential danger for the UAE’s competitive advantages. Even the aforementioned leads on the pillars of the Enabling Environment and Infrastructure subindexes narrowed slightly since 2017. On the other hand, there were improvements on international openness (83rd) and price competition (64th), areas where the country has needed to bridge gaps.
Saudi Arabia accounts for about one-fifth of regional T&T GDP and ranks eighth regionally and 69th globally on the index. The country is also MENA’s largest destination for travellers, attracting over 16 million people in 2017, many of whom were religious pilgrims. Saudi Arabia scores near the top for tourist service infrastructure (35th), with strong performance improvements for hotel capacity. The nation’s capacity for T&T has also been improved due to better air transport infrastructure (38th to 35th), which ranks 3rd regionally. Nevertheless, Saudi Arabia has several weaknesses that hold back its ability to diversify and expand its T&T industry. Chief among them is the country’s lack of international openness (137th), which includes some of the strictest visa requirements in the world (139th). Additionally, the country’s strong price competitiveness (21st), which is boosted by some of the world’s lowest fuel prices (2nd), has been hampered by a rise in ticket taxes and airport charges (26th to 52nd), potentially making flights more expensive. Moreover, the country can do more to broaden its case as a tourism destination, including improving its relatively low standing for natural (133rd) and cultural (58th) resources. Refinement in data has shown that the country needs to expand protected territory coverage (104th) if it wants to make its natural resources (128th) more attractive. This deterioration of natural and cultural resource is offsetting gains elsewhere and has led to the tepid growth in TTCI scores, resulting in the country losing six places on the global rankings.
However, there are signs that the country is addressing some of these drawbacks. Environmental sustainability has been enhanced (124th to 106th), due in part to improved environmental regulatory oversight (53rd to 41st). Yet, some of this improvement also comes from a new indicator for marine sustainability, which has reduced pillar comparability. Bolstered perception of the government’s prioritization of the T&T industry (82nd to 53rd) and effectiveness in tourism marketing (87th to 70th) also indicate real efforts to boost competitiveness. Over the past two years, Saudi Arabia has also made progress on an already good business environment, moving from 26th to 22nd, which could encourage investment in its T&T industry. There has also been impressive progress with regard to safety and security (61st to 23rd) as homicide rates dropped (48th) and police reliability improved (13th). The fall in terrorist incidence should also mitigate often-held safety fears; but since this indicator still ranks 123rd, far more needs to be done to dispel concerns.
Egypt had the fourth-highest TTCI performance improvement in the report, moving up nine places to rank 65th globally. The country benefited from score increases on 11 pillars, and scores on six of these pillars improved at or near double digit rates. Egypt is a global leader in terms of cultural resources (22nd). The country is home to some of the world’s most famous landmarks such as the Giza Pyramids Complex, helping it rank 38th in terms of World Heritage cultural sites and fourth regarding cultural tourism online searches. Nevertheless, it was Egypt’s improvements on natural resources (97th to 69th) that truly led to its overall improved TTCI score, with the attractiveness of its natural resources moving up 87 spots to 44th position. The country has long been regarded as a prime destination for nature-based activities such as beach resorts, with Egypt’s price competitiveness (3rd) attracting tourists seeking inexpensive vacations. There have also been efforts to build upon these strengths with greater prioritization of T&T (37th to 31st) via increased government expenditure (22nd to 18th), enhanced tourism brand strategy (60th to 5th) and improved air (55th) as well as ground and port (64th) infrastructure. Natural resources might have also been made more appealing due to improvements on environmental regulatory enforcement and stringency (98th) and the sustainability of T&T development (53rd), though it’s widely acknowledged that more needs to be done.
Fundamental to most of these improvements and their ability to increase tourist arrivals is Egypt’s stability, which has been under pressure in recent years. Since the last edition of the report, Egypt has had the second highest safety and security improvement in the world, helping it move up 18 places on the pillar rankings. Such an improvement is likely to make travellers more confident in going to Egypt. Yet the country still ranks 112th in this category and has one of the index’s highest incidences of terrorism (135th). Consequently, this is likely to remain one of Egypt’s most acute deterrents to more tourism. Increased visa requirements (51st to 123rd) have not helped induce the flow of tourists, with the country remaining one of the least internationally open (124th) in the world. Additionally, even with recent gains, Egypt needs to improve the other components of the Enabling Environment (86th) subindex to encourage greater T&T investment.
