The National Tourism Development Plan (Schema Directeur d’Amenagement Touristique, SDAT) was launched in February 2008. Under the SDAT tourism is set to become a motor for development, diversifying the economy, attracting foreign direct investment (FDI) and stimulating employment. “The vision is to transform Algeria into a key destination by 2025. The SDAT aims to attract 2.5m tourists by 2015, and 20m by 2025.
Approximately 1.77m tourists visited in 2008, an increase of 1.6% from 2007. Non-resident Algerians constitute the bulk of tourists, numbering 1.22m visitors, 69% of the market, and because they primarily come to stay with family they contribute little to sector revenue. Europeans spend the most, with French visitors responsible for the largest share of revenue, followed by Spanish, Italian and German tourists. Leisure tourism leads sector activity with a 64.5%share, followed by business at 29.8% and cultural tourism at 5.7%.
Algeria has tremendous tourism potential, with rich and diversified natural resources and historic sites, though to date this has largely gone unrealized for a number of reasons.
EXPANSION AND OVERHAUL: Seven tourism centers are currently being constructed or in the planning phase. The north of the country is divided into three regions: north-east, which includes the wilayas (provinces) of Annaba, Skikda and Tebessa, north-central (Algiers, Tipasa, Chief and Bejaїa) and north-west (Mostaganem, Oran, Tlemcen, and Mascara). The south has been divided into four regions: south-east (Ghardaїa, Biskra and El Oued), south-west (Adrar and Bechar), Tassili (Illizi) and Hoggar (Tamanrasset).
In contrast to Tunisia and Morocco, Algeria’s strategy is centered on developing niche tourism. To this end, construction of over 280 hotels and 14 tourism villages is planned under the SDAT. In 2008 alone around 80 projects were approved. Additionally, the Quality Tourism Plan Algeria (Plan Qualite Tourisme Algerie, PQTA) was launched in February 2009 to overhaul existing tourism infrastructure, bringing it up to international norms.
To stimulate investment, the SDAT will focus on creating public-private partnerships (PPPs) and attracting FDI. The Company for the Management of State Tourism Participation (Societe de Gestion de Participation de I’Etat du Tourisme, Gestour) has launched several tenders to privatize parts of its portfolio. National School of Tourism (Ecole Nationale Superieure de Tourisme), another SDAT project currently under construction in Tipaza, is due to be completed in 2011. Other institutes that offer tourism training are located in Bouaada, Tizi Ouzou and the Aurassi Hotel in Algiers.
SECTOR REFORM: The government has implemented incentives to stimulate investment. A July 2009 finance law reform offers investors a 50% discount on government-owned land concessions for tourism projects in the Hauts Plateaux region and 80% in the Sahara. Con-cessions are awarded by the Tourism Development Agency – which manages government land earmarked for tourism – for a 33-year period, renewable twice.
To encourage participation in the PQTA, banks have reduced interest rates on loans for tourism modernization projects by up to 4% and until December 2014 all imports related to upgrading tourism infrastructure will benefit from reduced Customs duties. Newly created tourism companies will be exempt from registration fees and to boost demand the value-added tax (VAT) on tourism products has been reduced from 17% to 7% until December 2019. In addition to the incentives contained in the 2009 Complementary Finance Law is a stipulation that new foreign investments must be realized in partnership with an Algerian investor that has a 51% share. This may discourage some investors.
ONAT will soon be placed under the National Planning, Environment and Tourism Ministry (Ministere de I’Amenagement du Territoire, de I’Environnement et du Tourisme, MATET) to oversee the SDAT’s implementation and promote Algeria. To market Algeria abroad, ONAT is in the process of creating Maison de I’Algerie tourism offices in Europe. “ONAT’s short to medium-term priority is to consolidate the European market and in the long term attract a more diversified clientele from the Middle East, North American and Asian markets.
DESERT ADVENTURE: Saharan tourism is a priority under the SDAT. “The south is already an established destination and its further development will not take long. For the four southern tourism centers – Tamanrasset, Djanet, Chardaїa and Timimoun – the SDAT plans six tourism villages. The Ksar Massine project in Timimoun will be the first to be built. To bolster investment, MATET pledged to facilitate access to land, while Gestour launched an international call for tenders for the rehabilitation and modernization of nine state-owned Saharan hotels in March 2009. Both projects will be publicly financed. Other projects scheduled for the region include the rehabilitation of the Oasis loop, a circuit tour that was popular in the 1970s and 1980s, and a hot air balloon tour scheduled for end-2009 by Club d’Aventure Africaines, which specializes in domestic tourism.
Boosting air transport to the region is the key to further development, and airlines are increasing flight frequencies. French tour operator Point Afrique launched weekly flights from Paris and Marseille to Timimoun and Ghardaїa in 2009, and may increase frequencies to Germany and Switzerland. Tassili Airlines is also expected to target the Saharan market in 2010. Construction of the south-west rail loop, linking the region’s main tourism destinations, is due for completion in 2014 could boost Saharan tourism as well.
SEASIDE & HEALTH TOURISM: With 1200 km of Mediterranean coastline, seaside tourism has great potential. “Developing coastal resorts is a must, both to cater to the European clientele and meet domestic demand. With little existing infra-structure, there is a huge gap to fill and much potential for investment. “Seaside tourism is a long-term objective, taking at least 10 years to develop. Eight tourism villages and 11 marinas will be built across the country’s three northern tourism zones, projects that have attracted interest from international investors.
Several key projects began in 2008. Saudi Arabia’s Sidar, in partnership with Kuwaiti Al Khaliji Al Maghrebia plans to develop three tourism villages by 2020.
Mehri Group is building a tourism village in El Oued at the north-eastern border of the Saharan desert. Given the location, the site is expected to become an important centre for desert tourism.
With over 200 geothermal springs, thermal and health tourism is a key niche. For the most part the segment remains untapped. Though several sites are currently in use they are not commercialized and need to be upgraded to international standards. The state owns nine thermal resorts, of which three will be upgraded – Chrea, Hammam Guerguour and Hammam Melouane.
BUSINESS: There is little infrastructure to support a meetings, incentives, conferences and exhibitions industry. This niche, however, has high potential, and sever-al significant projects are working to cater to it.
Other large-scale projects include the construction of 24 Ibis and Novotel hotels targeting business clientele and developed by Sieha. These will reduce the deficit in business hotel infrastructure. Established in 2005, Sieha is a joint venture between France’s Accor (50%) and Algeria’s Mehri (50%). The cost of the project, launched in 2006, is estimated at €220m. The €17m Ibis Algiers Airport, located in the new business district of Bab Ezzouar, was inaugurated in February. Four of the hotels are currently under construction in Tlemcen, Oran, Constantine and Setif.
CULTURE: Cultural tourism is another niche with potential. The north of the country, including the coastal and Hauts Plateaux regions, is second only to Italy in terms of Roman ruins, with over 500 sites dating back to antiquity. The northern cities of Annaba, Algiers, Oran and Constantine are also keys to this segment. Cultural tourism is of particular interest to European tourists and Christians, who make pilgrimages to Annaba to retrace the footsteps of St Augustine. “Other forms of pilgrimages include those undertaken by the French settlers that still have strong ties to Algeria and often have family members buried here.
OUTLOOK: Algeria has a long way to go before becoming a tourism destination. As a blueprint for sector development, the SDAT has put into place the necessary mechanisms for the industry to take off. Existing infrastructure is in the process of being overhauled and expanded through the consolidation of Saharan tourism in the short to medium term. The development of high-potential niches such as seaside, business, cultural and health tourism is also a priority. The sector is attracting significant investment, and the World Travel and Tourism Council forecasts sustained growth for the sector over the next decade. “Though much still remains to be done, the machine has been started and the process is now irreversible.