Tourism: Marrakech and Agadir in Danger

Nationally, between 2008 and 2009, arrivals increased by 7% and overnight stays fell by 1%. This follows the same trend for the previous season (2007/2008) where arrivals were up 6% while nights fell by 1%. This is the result of changing customer behavior. Less dependent on tour operators, the "new" tourist composed his own package and stay away from the traditional hospitality. He can stay in a riad or elsewhere.

The phenomenon is especially visible in Marrakech, Fez, Tangiers and Agadir. Not having anticipated this trend, hoteliers see their operating accounts deteriorate.

Moreover, the impact of lower occupancy rates of hotels has intensified with the arrival of new capacity in the market. The accommodation capacity increased from 152,936 in 2008 to 165,936 beds in 2009, an increase of 8.5%. The previous season (2007/2008), it had increased by 7%. More beds and fewer nights. The occupancy rate dropped 4 percentage points between 2008 and 2009. This means that the cake must be shared between more people. This is the nightmare scenario for operators so that some are now demanding a "better management of the direction of investment" . Their argument is that faced with a stagnant flow arrivals, the injection of new capacity in a city like Marrakech undermines the profitability of investment in the sector.

The only certainty is that Marrakech and Agadir, Morocco's two engines of growth on the international market, are halted. In the Red City, the average length of stay (LOS) increased to three days in 2009 and in the first half of 2010. It is a point less than in 2008. Agadir has also lost a point on the length of stays since 2007. It now stands at six days, what remains in the middle range for resorts.
Marrakech and Agadir attract more than half (53%) of arrivals. Agadir showed better scores than Marrakech in 2001, when concluding the framework agreement, but it has been overtaken by its competitor in terms of nights and capacity.

Agadir remains on two years of consecutive decline of nights spent : -6% between 2007 and 2008 and -4% between 2008 and 2009. Moreover, in ten years (since 2001), the destination has lost 6 points on the occupancy rate from 61% in 2001-55% in 2009. During the same period, the accommodation capacity increased by 33%.

In Marrakech, the picture is much brighter since the nights spent have fallen by 5% between 2007 and 2008 and 1% between 2008 and 2009. The occupancy rate picked up dramatically in 2009 47%, or 17 points less than in 2001 when the hotel capacity increased by almost 150%. This only exacerbates the financial difficulties of hotel companies.

In 2015, Agadir will have 60,000 beds. Marrakech will have 70,000 beds. This over capacity could cause failures if the hotels fail to attract more tourists.

For the National Federation of Tourism, there must be a sufficient bed capacity to sell a destination. "Moreover, even if occupancy rates fall, the capacity has increased and will continue to do so. The investments show that there is interest in the destination. "

The interest is made very visible by the dozen openings planned in Marrakech with some big names: Four Seasons, HH Bains de Mer Monaco, Mandarin Oriental, Beachcomber, Samanah, W Hotels, Rocco Forte, Lucien Barriere, Jumeirah Dubai, Iberostar , Reem International, Intercontinental. Note that for certain brands, the strategic positioning of Marrakech is justified by the desire to follow their client. This is especially important and indicates that Four Seasons, will attract its customers, who stay in the same hotel they are accustomed to stay in whever it be in Geneva or London.

How to restart the machine?


Khalid Tijani advisor to the CRT in Marrakech, is clear: "Our concern today is to extend the average length of stay of tourists , returning to 4 days as was the case some years ago, even reaching more. A three days stay is not profitable. We should also increase the return rate which is very low. We're working on it " he says. What are the solutions? To improve hotel profitability, ensuring a sufficient length of stay and improve the return rate, we must develop a variety of attractions such as history, culture but also natural environment, entertainment and tourism areas.

However, there is a weakness in the our creative thinking. Egypt, for example, has developed several tours including the famous cruise on the Nile. We are still working on the "tour" of the imperial cities in one week-ten days. This explains the decrease in average length of stay. But there is another explanation. Besides the benefits, there are the disadvantages of low cost. People travel cheap and do not necessarily stay in a hotel. They also travel more often but do not stay long. These are international trends: changing patterns and widespread last minute booking. "Work the hinterland, including developing facilities for extending the duration of tourists stays." Directors must develop a high value added niche: golf tourism business is very lucrative. There was firstly a need for infrastructure. Now, according Tijani, Marrakech should be equipped with a large conference location because the convention center is no longer sufficient on its own.

Jihane Kabbaj
L'Economiste 9 August 2010.