Tourism Sector in Jordan: Proposed Solutions to Key Challenges

The tourism sector is a strategic asset that plays a vital role in contributing to economic growth, export diversification, and job creation. A study examining the role of tourism in Jordan's economy and its effects on other sectors found that for every dinar spent on tourism, the economic output increases by 1.55 dinars, value-added rises by 0.74 dinars, 0.069 jobs are created, and imports grow by 0.22 dinars. However, compared to countries such as Turkey, Tanzania, and Romania, tourism's contribution to Jordan's economy remains relatively limited. This is mainly due to tourism spending being concentrated within the sector itself, with minimal spillover effects on other industries.

The ongoing conflict in Gaza has significantly affected Jordan's tourism sector. The Ministry of Tourism has reported a sharp decline in the number of foreign visitors, particularly from Europe and North America. However, the impact of the Gaza war was not uniform across all sectors. Tourist destinations such as Aqaba, Petra, Wadi Rum, and Madaba experienced greater challenges than others. Additionally, establishments that rely on foreign visitors, such as travel agencies and luxury hotels, were heavily impacted. In 2024, the number of foreign visitors dropped by approximately 600,000, leading to a loss of 194 million Jordanian dinars in tourism revenue, according to the Ministry of Tourism.

Given these challenges, it is crucial for government officials to take immediate and practical actions to address the financial difficulties facing investors and employees in the tourism sector. The following are some key proposed solutions:

First: Financial proposals, it is essential to reschedule the debts of investors in the tourism sector, particularly those incurred during the Gaza conflict. This can be achieved by providing opportunities to adjust loan terms and extend repayment periods without additional interest or late fees. Reducing interest rates would ease the financial burden caused by the Gaza war. Lowering interest rates on loans for tourism projects, offering subsidized loans, and establishing reduced financing programs for tourism investors can help restart tourism establishments and encourage new investments.

Second: proposals to stimulate economic activity in tourism. Reducing the tax burden on tourism investors, in light of the current situation, is an important step. This reduction could be temporary, for example, lowering the tax rate for a period of at least three years. Additionally, rescheduling taxes due without imposing late fees could be beneficial. Offering partial or full tax exemptions on tourism-related sales and services for a specific time frame would further stimulate economic activity in the sector.

Third: proposals to strengthen Jordan as a tourist destination. Enhancing marketing efforts to promote Jordan as a tourist destination through targeted campaigns aimed at new markets—including online platforms and social media—would significantly attract more tourists. Collaboration between tourism institutions and the government could lead to international campaigns that highlight Jordan's unique tourist offerings, including medical and educational tourism, to draw visitors from regional and global markets.

Fourth: Governmental actions for supporting the tourism sector. Establishing an emergency fund to support the tourism sector is critical. This fund would provide financial assistance to investors and workers to compensate for losses incurred. Additionally, reducing or waiving utility fees for tourism establishments, similar to the treatment of factories, would ensure their continued operation. Any decisions that may lead to the closure of struggling tourism establishments should be postponed, offering these businesses a chance to recover rather than closing them permanently.

Despite the challenges faced by the tourism sector in Jordan due to regional crises, the emphasis on promoting domestic tourism, medical tourism, and educational tourism has helped mitigate some of the negative effects. This shift is also reflected in the Economic Modernization Vision, as the increase in visitors from Gulf countries and Jordanian expatriates shows the sector’s resilience. Nevertheless, the sector still requires long-term strategies to diversify its sources and improve infrastructure and services to attract more foreign visitors. With the right strategies in place, Jordan's tourism sector remains capable of recovery and growth.

Raad Mahmoud Al Tal is head of the Economics Department, University of Jordan- r.tal@ju.edu.jo