We can’t always control what happens to us, but we can control how we react to it.
As Morocco enters peak tourism season at the end of September, we are reminded of the 6.8-magnitude earthquake that struck the country earlier this month and the subsequent effects that major natural disasters have on emerging markets.
Tourism in Morocco
In Morocco, tourism accounts for 7.1% of the GDP and is a crucial source of income for low- to middle-income families. However, due to the quake, it’s expected that the country will face potential losses of up to 8% of GDP, most likely between $1-10 billion. In an effort to rebuild, Morocco plans to spend $11.7 billion over the next 5 years in a post-earthquake reconstruction program.
Although LHA has an off-market luxury hotel investment opportunity in Saïdia, a beautiful coastal town in northeastern Morocco, we wanted to shift our focus to something that we as hoteliers can all relate to… the critically important skill of problem-solving.
Looking Ahead in Hospitality
An effective problem-solver identifies and exploits opportunities within their environment in order to exert some level of control over the future. Still grappling with the aftermath of its deadliest earthquake in more than 60 years, Morocco is looking ahead and actively implementing solutions aimed to boost the economy, with a particularly strong emphasis on the tourism and hospitality sector.
Morocco plans to double the amount of investment in its tourism industry to $2 billion a year by 2026, and to incentivize new investors, Morocco is offering up to 30% cash-back on capex on tourism projects. Further, the country plans to raise the tourism industry sector’s GDP contribution to 10% by 2026.
Moroccan Agency for Tourism Development
The Moroccan Agency for Tourism Development (Société Marocaine D’Ingénierie Touristique) is actively trying to diversify investments into projects along Morocco’s coastline and encourage hospitality investors to seek opportunities in these areas, as well as desert and national park destinations.
With the Annual Meeting of the IMF and World Bank set to begin on October 9th in Marrakech, there was skepticism as to whether or not the event should be relocated considering the importance of not hampering relief efforts, but Moroccan authorities pressed IMF and World Bank senior officials to proceed with the Annual Meeting, as it’s expected to bring 10,000-15,000 people to Marrakech, providing an opportunity for the international community to support Morocco.
The Resilience of Hospitality
On similar note, one of the most notable insights that came out of the Covid-19 pandemic was that the hospitality industry is resilient in the face of challenges, and experienced hoteliers understand the importance of being able to effectively problem-solve. They look for positive opportunities and developments in every situation, even under dire circumstances such as a global pandemic or a natural disaster.
With significant foreign investment incentives by the Moroccan government to grow their tourism industry, an opportunity is presented for the visionary hotelier and innovative investor with a growth mindset.
What opportunities exist now that didn’t before? What doors have been opened? We’d love to hear your thoughts in the comments.