New coastal resorts included in Plan Azur

Source: 7th International Tourist Conference handbook, Fes 2007

By promoting an “open skies” policy, the government set a target for around 1,300 weekly flights into Morocco, with 15.6 million passengers per year. In 2008, almost 8 million tourists visited Morocco. Tourists’ arrivals increased by a further  6% in 2009, to 8.4 million.

Tourism almost invariably brings increased interest in property buying, and will likely have a large impact both on Morocco’s economy, and on property prices. As part of the King’s original Pan Azur, a key-sector of the national economy, Tourism will have generated by the end of 2010 around 60 billion dirhams from circa 9.3 million tourists, representing over 90% of the 10 million tourist-goal.

Vision 2020

The Vision 2020, which is part of regionalization, seeks to strengthen the place of Morocco as an international destination.  The new vision is aimed at doubling the productivity of tourism industry and turning Morocco into one of the world’s top twenty tourist destinations, with eight new destinations within Morocco itself as a result of the Vision 2020.  200,000 new tourist beds will be created throughout Morocco, tourist arrivals will witness a twofold increase and the number of foreign travellers will treble. Tourism revenues will reach 140 billion dirhams in 2020.

Morocco has become one of the most active players as far as tourism is concerned and is among the World’s top 25 tourism destinations.  This sector is the primary contributor, at a national level, in the balance of payments, the second contributor in the GDP and the second sector that employs the most workers.

The creation of 200,000 tourist beds, the threefold increase of the number of foreign travelers and the 140 billion dirhams of tourism revenues will place Morocco among the leading tourism destinations.

Construction Sector

“I returned back to my hometown of Oujda four years ago having worked for my uncle back in the UK and I cannot believe how my country is changing and becoming a global player in tourism and investment”.

Mounir Belmahi, Director – Resort Morocco Saïdia inspecting one of the new developments at Saïdia Mediterranea

The year 2010 saw Morocco’s construction sector enter a new phase of growth after its recent slowdown. Although bad weather and some flooding muted growth in early 2010, a strong pipeline of projects, multilateral support and government commitment have combined to offer promising prospects across the energy and transport sectors. BMI expects the sector to continue growth at 3.4% to MAD45.4bn (US$5.5bn) in 2010. Recent developments include:

• Morocco’s expenditure on infrastructure will help underpin average real GDP growth of 3.8% per year over the next decade. The government stepped up it’s spending on basic infrastructure to MAD400bn (US$47.26bn) for 2008-2012, up from just MAD80bn (US$9.45bn) for the previous period. Roads, ports, airports and transmission grids have been among the assets to benefit from the stronger spending, providing a windfall for established firms.
• In an effort to turn around its near-total reliance on energy imports, Morocco aims to generate as much as 2 gigawatts (GW) from wind power and 2GW from solar power by 2020, according to Energy, Mines and Water Minister Amina Benkhadra. . The airports authority is expecting to invest as much as MAD6.8bn (US$1.85bn) over 2010-2012 on various upgrades, according to Reuters, including redevelopment of Casablanca Airport’s first terminal and passenger handling capacity at Marrakesh, Fes, Rabat and Oujda airports.

Despite the economic downturn affecting tourism industry in 2009, the latest statistics show that Morocco managed to resist the crisis. While tourism around the world declined on average by 4.3% last year (UNWTO), Morocco reported an increase of 6% in the number of arrivals at the border (+ 460,000 tourists) when compared to 2008.  The statistics released by the Ministry of Tourism and Handicraft reported that in total 8.34 million tourists visited the country in 2009 (7.88 million a year earlier), reported Fmdt.ma.

The hospitality industry recorded increased numbers of guests especially at the end of the last year. For instance Marrakech, where 38% of all overnight stays were registered, announced an increase of 26%, surpassing its historical peak of +6% in 2006. Casablanca and Fès also performed well with the increase of the guest nights of 21% and 28% respectively.

With regard to air travel, the government is seeking to achieve equilibrium between the additional hotel capacity and the number of air passengers, to increase the number of flights provided by mainstream operators and to back up the strategy of targeting new markets through the emergence of new carriers.

The tourism minister says that the 2020 plan will be based primarily on quality rather than quantity of services.

The number of tourists that visited Morocco during the first two months of 2010 year reached 1 million passengers, thus registering an increase of 14% compared to the level recorded a year earlier, according to the latest statistics published by the Department of Tourism. 

The main tourist cities of the Kingdom have recorded good performances in terms of nights during the first two months of 2010. This applies to Marrakech (+17 pc), Casablanca and Tangier (11 per cent each) and Rabat (6 pc).

A consistent sign of Morocco's growing popularity as a tourist and investment location is the announcement in 2010 by InterContinental Hotels & Resorts that they are to have a significant presence in Morocco.

Morocco is transforming itself with wide-ranging infrastructure improvements. Its road network is currently being upgraded with the latest brand new motorway linking Marrakech with the Resort city of Agadir.

“Since the opening of the new motorway linking Marrakech to Agadir in July 2010, cutting drive time now to 2.5 hrs means that we are witnessing a large increase in visitor numbers to Agadir”

Mr. Richard Hargadon, Director Resort Morocco Agadir

Access to the country has been significantly improved with the signing of the European Skies agreement, allowing European airlines to operate without restriction at all the major airports. This has meant the arrival of low-cost airlines such as Easyjet, Ryanair and Thomson, which have all announced new Morocco routes from a number of UK airports, increasing tourist arrivals even further.

Despite the global economic slowdown, the government has continued to increase spending for the construction and renovation of roads, airports, and seaports. Work began in April 2009 on a new high-speed railway connecting the key cities of Tangier and Casablanca. It is expected to be completed in 2016.

The increase in government spending combined with good harvests since 2008 has helped the Moroccan economy grow at impressive rates, despite the global crisis. After 2.7% growth in 2007, the economy grew at an impressive 5.6% in 2008. GDP is believed to have risen 5% in 2009, and the IMF forecasts 3.2% growth in 2010.

Economic Reform 

Morocco’s economy has been improving.  King Mohammed VI, who succeeded in 1999, is a dynamic monarch who has brought substantial reform to Morocco.

Although GDP growth has been a little erratic, the economy has never contracted under his term. Economic growth was particularly strong in 2001 (7.6%), 2003 (6.3%) and 2006 (7.8%). The last time the economy contracted was in 1997 (-2.2%).

Morocco’s sustained economic growth has led to a drop in unemployment, from 11.4% in 2003, to 9.6% in 2008. In urban areas, the unemployment decline during this period was more pronounced, from 19.3% to 14.7%. In Q2 2009, unemployment was at its lowest level yet, at 8%, before rising to 9.8% in Q3.
Inflation management has greatly improved, with the inflation rate averaging 1.38% during the period of 1999 – 2005, down from 6.2% from 1990 to 1995.

Higher public spending for 2010

Public works spending is projected to grow by 20% in 2010, while state investment is expected to rise by a similar percentage.  Projects funded by this increase in spending include the expansion of Jorf Lasfar power station, wind farms in Tangier and Tarfaya, and other power-generation plants.

However, the increase in spending will lead to a budget deficit, after surpluses in 2007 and 2008. The budget deficit is expected to be around 2.7% in 2009, rising further to 4% in 2010.The government is forecasting inflation of around 2.8% in 2009 and 2010, down from 3.9% in 2008.

“I have now been working in Morocco for the last 6 years and I have seen massive changes being made to the economy on local and national levels. At times it is difficult for foreign visitors to really appreciate how quick these changes are occurring”

Richard Dear, Commercial Director Resort Morocco SARL, pictured with Mounir Belmahi at the King’s visit to Saidia in 2009 

Planned tourism explosion

Outside the Mass Market

Around 7,500 - 15,000 French residents live around Marrakech in these and other accommodations.

Will Morocco run out of Riads?  “Oh no, there are 50,000 Riads in Marrakech and only 1,000 are sold to foreigners,” The coasts are also a major destination for French and other European tourists and those looking for a second home.

“This is a very exciting time to be living and working in Marrakech right now. You can see a planned strategy taking place here with tourism and the construction of high end quality resorts now coming to fruition. And of course there is a re-surgence in the Riyad market where I personally specialise”. Abbes Ali Mahmoud , Director Resort Morocco Marrakech

Stable rental yields

Gross rental yields in Morocco this year are almost unchanged from previous years.  Yields are generally rather acceptable.  In Casablanca, yields range from 6.4% to 9.2% for apartments, but are much lower (as might be expected) for houses, at 4.6%.

In Marrakech, as in all previous years, we were unable to get enough data to offer numbers for yields on riads.  However, apartments in Marrakech offer acceptable yields at between 6.2% and 7.6%.

The attraction centres of Morocco

The cultural and physical attractions of Morocco centre on its traditional cities – Marrakech, Fes, Meknes, Casablanca, and Essaouira – and on its one coastal resort, Agadir.

Marrakech

Marrakech was built in 1070 A.D.  It is famous for its palaces, open markets, and gardens.   It is an extraordinarily exotic city, with its drama heightened by a location at the foot of the Atlas Mountains.

Marrakech is expecting three and half million tourists by 2010. Marrakech has a complete tourism zone, Aguedal. A public transport system carries tourists from the district into the city centre for its souks and traditional markets selling copperware, wool merchandise, and carpets and kaftans. There are no less than 27 5-star hotels in Marrakech.

Fes

For over 400 years, Fes was the capital of Morocco. Founded in 789 A.D, it is the world’s oldest medieval city, and the largest.  Considered Morocco’s intellectual and religious capital, it is a UNESCO world heritage site.

It was at the peak in the 14th century, and saw a fresh burst of glory in the 17th century. Narrow streets prevent the entry of cars into much of the city.

Casablanca

Here the French built a city in a French idiom, heavily influenced by the architecture of the Arab-Andalusian Empire.  The city centre has a modernist grandeur, with plenty of space and light.  Casabablanca is large, modern, and agreeable, with five golf courses less that an hour away.

Meknes

Meknes was recognized as a World Heritage Site in 1996.  Its physical location, on a plateau, made it Morocco’s trade crossroads.  Its magnificent architecture was built by the 17th century Ruler, Sultan Moulay Ismail. Over 55 years he built palaces, mosques, gardens, and lakes.  After his death the unfinished buildings including the royal palace - the Versailles of Morocco - which fills most of the old city.

Agadir

Agadir is Morocco’s main seaside destination. Beautiful beaches, luxurious hotels, an ultra-modern airport are all combined with a moderate climate. Agadir’s beach is spectacular. 10 kilometres in length, it is clean and wide.  Agadir enjoys a continuous breeze from the Atlantic, so that the temperature is pleasant all day. A major earthquake completely destroyed the city in 1960.   It was rebuilt from scratch. Agadir today is a modern city.

Tangier

Tangier has a louche reputation dating from the 1920s, when it was an outpost for British paederasts. Then in the 1950s, beats, dropouts and writers like Burroughs and Bowles, Ginsberg and Kerouac, Leary and Eldridge Cleaver came to Tangier. It is a messy, rather ugly city. Now its coastline is being covered with resorts and new developments.

Essaouira

Essaouira is popular with independent travelers.  This is partly because of its long beach, and partly because of its laid-back atmosphere.  The town has long been magnet for Moroccan poets and creative talent.  In the Place de L’Indépendence, which is the main square in the centre of Essaouira, there are dozens of cafés and restaurants. It is a pleasant place to eat, drink, and watch the world go by.

“If ever there was a time to look at investing in property in a particular overseas market then the time is now and the place is certainly Morocco. With multi lingual professional staff, we very much look forward to offering our experience and knowledge to clients of Resort Morocco – inshallah!”

Hugh James, Managing Director Resort Morocco SARL

If you would like to have further information about buying or renting property here in Morocco then please contact us either by phone, email or post: