Three reasons behind Algeria’s stagnant tourism industry

Three reasons behind Algeria’s stagnant tourism industry

Despite the Algerian government’s claim to make the tourism sector a priority, the country’s tourism industry is still almost inexistent.

According to the Travel and Tourism Council, in 2015 Algeria only ranks at the 132nd place out of 140 countries in terms of travel and tourism competitiveness. Three main factors explain the constrained development of tourism in Algeria.

With dropping oil prices this year, the necessity to diversify oil-dependant economies such as Algeria has become a hot topic.

Algeria enjoys natural, cultural, and historic endowments that make it the perfect tourism destination. However, for several reasons including the Civil War of the 1990s, Algeria did not develop its tourism industry in the past.

For decades, the Algerian government ignored Algeria’s attractions, as the economy was tremendously dependent of the oil and gas sector alone.   

Today, Algeria’s business environment is more conducive to tourism growth and the government is finally launching projects to develop tourism.

According to an advisor of the Ministry of Tourism, Mr. Khalef, “For years the tourism industry was completely neglected by the government, but now the ministry of tourism is one of the five priority sectors, as labelled by the government.”  

However, there are several factors that still put the brakes on the development of the industry today.  

The oil curse

Because Algeria was living off the oil and gas sector for decades, it did not seem important for the previous governments to develop other industries.

Because of the oil curse, Algeria, like many other oil dependent countries, has not developed a vibrant and competitive private sector.

As a consequence, today, Algeria is lacking supporting industries for tourism to develop effectively. Mr. Ouldali, General Manager of Hilton Algiers, explained that the underdeveloped state of the country’s banking and bedding sectors hampers the smooth running of his tourism business.

“Because only one bank in Algeria provides credit card payment terminals, it usually takes 20 minutes for clients to pay when they check out,” he commented. “This is unacceptable to develop our tourism business.”

The lack of solidity in the supporting sectors is also caused by a lack of appropriate infrastructure.

There are not enough beds in Algeria to respond to the growing demand of national tourists. In the capital, Algiers, only 19,000 beds are offered.

Because of this shortage, the competition between hotels is low and the prices do not translate to the quality of the service provided.

The rentier mentality can explain this deficiency in the services sector. The rentier mentality prevails in natural resources dependant economies, where wealth is not related to the quality of the work produced.

In Algeria, this has created a culture that is hostile to growth in the tertiary sector, including tourism.

The lack of destination promotion

“Tourists will not come to Algeria because of the media, because there is no promotion of Algeria abroad.”

Mr. Nasi, General Manager at Le Méridien, Oran spells the issue out. Today, Algeria’s image is associated with the Black Decade’s terrorism, security issues, and underdevelopment.  The Algerian government is lacking a clear communication strategy.

Tourists need to be reassured about their destination. Building a “cloud of comfort” is vital for tourism growth.

Today, social media plays an important role in image building and promotion. Touristy countries’ governments use social media accounts to promote their country as a destination.

On the other hand, Algeria’s government does not use social media and its website is rarely updated.

The lack of a long-term vision

Although the Algerian government does have numerous projects in terms of tourism development, such as reaching 500,000 beds by 2030, these come as semi-measures to foster tourism.

Without competitive air travel prices to Algeria, destination promotion and the facilitation of the administrative hurdles to obtain a visa, these projects fall short of solving the issue.

The lack of coordination between the different ministries and sectors hampers tourism growth. Mr Khalef admitted to this lack of coordination.

The Algerian authorities have a tradition to use tourism as a short-term solution to economic crises when oil prices drop, as they did in 1986. It is only since the oil prices slumped once more that the Ministry of Tourism was made a priority by the government at the end of 2014.

In 2014, Algeria’s investments in tourism only represented 2.7 percent of total investments, whereas neighbouring Morocco dedicates 11.2%.

In order to compensate for a poor private sector, Algeria needs more vigorous involvement from its government in the development of the industry’s backbone.

About Author

Assia Sabi

Assia Sabi has previously worked in strategic foresight for several organisations related to the Middle Eastern economic and business environment, such as the National Bank of Abu Dhabi and MEC International Ltd. She holds a double degree with a BA in Politics and International Relations from University of Kent and Sciences Po Lille, a master degree from Sciences Po Lille and has just completed an Msc in International Management for the MENA from the School of Oriental and African Studies (SOAS).