Tourism sector hit hard by ongoing Israeli war on Gaza

AMMAN — The ongoing Israeli war against Gaza has impacted the Kingdom’s economy, notably the tourism sector.

An International Monetary Fund (IMF) report said that the current impact of the war on Gaza is concentrated on the tourism sector as a result of the cancellations by tourists from advanced economies, which account for a third of tourism revenues.

Bookings cancelled in the last quarter of the previous year reached at least 65 per cent, largely due to the Israeli war on the Gaza Strip, according to official estimates. 

The number of tourists arriving in the Kingdom in the first four months of 2024 dropped by 8.8 per cent compared to the same period of 2023, according to figures by the Ministry of Tourism and Antiquities.

In 2023, the Kingdom’s income from tourism increased by 27.4 per cent, according to the data issued by the Central Bank of Jordan (CBJ) in January.

The Ministry of Tourism and Antiquities’ first-quarter report for 2024, providing a detailed overview of income, visitor statistics and strategic objectives for the upcoming year, showed a 9.7 per cent decrease in tourist arrivals compared with the same period in 2023, with the total number of visitors reaching 1.334 million.

The report attributed the decline in numbers to regional events that have impacted the sector’s performance, leading to a 5.6 per cent drop over the same period, adding that despite these challenges, the tourism sector has shown resilience.

The Central Bank of Jordan has reported that tourism revenues in the first four months of the year totalled $2.1 billion, marking a decrease of 4.9 per cent compared with the corresponding period of 2023. Tourism revenues in April also went down by 2.6 per cent to $529 million, compared with the same period of last year.

Tourism revenues exceeded projections for the first three quarters of 2023, showing a 27.4 per cent increase and setting a "historical" precedent at JD5.2 billion, according to the CBJ.

According to the IMF's first review under the IMF Extended Fund Facility (EFF) last month, despite the ongoing war in Gaza, Jordan should be able to navigate the associated challenges well, provided there is no significant regional escalation.

This resilience is attributed to the authorities’ strong commitment to sound macroeconomic policies and advancing structural reforms. Growth is expected to moderate to 2.4 per cent in 2024 and rebound in 2025.

The IMF also noted that strong and timely international support remains crucial for helping Jordan cope with external pressures and the financial burden of hosting a large number of Syrian refugees.