Travel – Airport
A number of simultaneous factors are threatening the summer holiday plans of many families in the region, especially during Ramadan, holidays and school holidays. The seasons are interrelated and the extraordinary expenses that come with it, concurrent with an economic situation that is at an all-time high for many. The nation’s inflation rate casts a shadow over spending priorities.
In conclusion, there may be many changes in some families’ summer vacation plans, and under the weight of the current situation, it may reach a point where some families cancel the annual habit, represented by the basics of food, drinks, clothes and Housing, and rising prices of goods and services. , which is reflected in the usual summer interior and exterior travel.
Inflation
Ahmed Al-Haidousi, an economist from Algeria, said in an exclusive statement to Sky News Arab Economy:
- According to the International Monetary Fund report, global inflation has reached record levels, reaching 8.8% in 2022 and is expected to reach 7% this year.
- Scenes from around the world, including from a country considered to be one of the world’s leading economic powers, voiced discontent over excessive price increases and declining purchasing power.
- This prompts individuals to reduce consumption and sacrifice products they consider luxuries, such as entertainment and travel products.
- Therefore, tourism is the most affected industry, especially during the COVID-19 pandemic, with some international reports estimating losses of more than $4 trillion.
- At a regional level, Arab citizens have had their share of rising global inflation, particularly in countries outside the Arab Gulf region such as Lebanon, Egypt, Sudan, Tunisia, Iraq, and Morocco, prompting considerable consideration of spending money at the lowest possible cost Number of families on summer vacation.
For example, regarding the situation in Algeria, Al-Haidoussi stated that the inflation rate will reach a level of 9.3% in 2022, a figure not seen in Algeria in 26 years, due to the social support policies implemented in Algeria. Support the price. “Prices for most widely consumed products, as well as fuel and electricity, are subsidized and regulated by the government. Despite this, we have seen a decline in the purchasing power of Algerian citizens, which has forced the government to intervene several times over the past three years, whether by raising wages Or lower income taxes.”
This is reflected in the ability of Algerian citizens to consider tourism, especially since summer holidays coincide with other occasions, and in the weeks after Ramadan, which is notoriously known in Algeria, can drain the pockets of citizens, which is reflected in the fact that many Algerian tourists prefer to vacation abroad. Tunisia, Turkey and even Spain over the past few years, which has prompted them to choose a domestic destination, an opportunity to discover the motherland and to discover the tourism products of Algeria, even compared to the quality of services and prices they receive abroad.
He added: “Thus, the data released by the official authorities on the unprecedented recovery of domestic tourism confirm that the current international situation and the succession of crises such as global inflation, health crisis, etc., have prompted Algerian tourists to look for alternatives he found in domestic destinations. combination of quality and
different seasons
Dr Hossam Ayesh, an economist from Jordan, said in an exclusive statement to the Sky News Arab Economics website that every season of the year has its costs, expenses and surprises for the average household, while there are often very much-needed ones during the summer months. Recreation and travel, especially since the kids are out of school and the air conditioner is also used a lot due to the heat.
Even the quality of food may be different from other seasons. He added:
- Consider that the average income of many Arab households, including Jordanian households, has either remained the same, or has declined in real or purchasing power due to rising inflation, or sources of income are no longer sufficient to meet spending needs even on basic needs.
- We’re talking food and drink, transportation, housing, rent and energy costs. All of these account for three-quarters, perhaps the majority, of household spending, with the remainder barely meeting occasional or emerging needs according to each season of the year.
- In terms of entertainment, in a country like Jordan, for example, households spend almost nothing on entertainment, accounting for only 2% to 2.5% of total expenditure.
- The average Jordanian household spends about 12,519 dinars (approximately US$17,650), so households spend a maximum of 300 to 320 dinars a year on entertainment, meaning citizens spend only between 5 and 6 dinars per month In the entertainment industry.
So, he explained, any attempt to deal with travel, going to a hotel, or sending the kids to summer club means that the costs will be high, perhaps 30 percent of household expenditures, on top of other needs or expenses, perhaps by resorting to debts to meet these obligations.
IMF estimates suggest that “growth in the MENA region is projected to slow sharply this year, to 3.1% next year and 3.4% next year”, before growing at 5.3% in 2022.
Funds returned these estimates for a number of reasons. Most notably, countries have imposed restrictive measures in response to soaring inflation, unprecedented rises in interest rates and the lingering fallout from the Ukraine crisis.
Inflation
Ali Al-Ghanbouri, an economist from Morocco, said in an exclusive statement to the Sky News Arab Economics website: “Inflation levels in Morocco are rising at an alarming rate, reaching 6.6% by the end of 2022, the first of its kind. In the country, which is leading the way, this inflation pattern continued strongly in the first four months of 2023, with sharp increases in food prices painfully reflected in prices hitting record highs and severely impacting citizens’ purchasing power.
He added: “Morocco is known to be a par excellence tourism country with tourism receipts of about US$9 billion in 2022 and domestic tourism accounting for nearly half of recorded overnight stays in 2022, estimated at around 19 million overnights.. so if said that domestic tourism already forms the lifeline of Morocco’s tourism industry, especially as the world suffers from multiple crises. This domestic tourism will be greatly affected by the continued inflationary pattern this year, especially given the apparent decline in the purchasing power of citizens and the government’s Without any clear vision to revive this.Domestic tourism orientation and provide the necessary incentives to prevent its decline.
The economist continued: The impact of domestic tourism this year will be supported by several fundamental facts. The most important of these is that the peak tourist season and holidays coincide with Eid al-Adha, and the price of sacrifices has risen sharply, which will greatly exhaust the economic capacity of Moroccans, which will prompt them to look for traditional alternatives to summer, away from hotels and tourist centers, This will significantly affect the travel movement. In Morocco, hotel fill rates and the informal market recovered in this regard.
three basic stages
Furthermore, Moroccan economist Dr. Hisham Benfdoul stated that it is necessary to focus on the summer and its impact on the economic situation of households, as well as the unprecedented inflation rate, which is the case in many Arab and Islamic countries, by evoking three basic phases:
First: Before summer vacation
As we all know, the prices of most of the most consumed materials have not risen in the past few months, but the prices of these materials have risen several times in a row, especially energy materials, food, construction materials, textiles, etc.
These increases coincide with a period of qualitative and quantitative increases in food and energy materials, especially benzene and petrol, due to Ramadan and Eid and the consequent depletion of household budgets.
And with Eid al-Fitr coming up at the end of this month, just days before the start of the summer holidays, this will add to the burden on the household budgets of the middle class and the “mass” class.
Perhaps this year will see an unprecedented rise in the price of offerings, combined with already high food prices.
He adds: Fortunately, in Morocco for example, there is a public policy that supports some of the most consumed food and energy sources, namely: sugar, soft wheat and butane gas. The value of support in 2023 is expected to reach about AED 26 billion (approximately US$ 2.5 billion), while the value of support in 2022 is through a so-called settlement fund. Without this social and economic policy, the situation for most Moroccan families would be even more difficult.
Second: Summer Phase
Benfdoul said the summer holidays are a tough time, with households’ budgets being depleted due to the reasons mentioned above, and summer is also a time of yearly price increases due to high demand. Due to the large number of gatherings, especially weddings, and some high prices in the coastal areas, especially due to the large number of local and foreign tourists in these areas, some food items are sold all over the country.
He continued: Despite this, summer is also considered an opportunity for many Moroccans living in Al-Kharj to visit their country, Morocco, to visit family and friends and spend holidays with their families, also for investment purposes.
Third: After the summer vacation
He added, “Families will spend this summer, and in this inflationary backdrop, most households will have less purchasing power as a result, and their eyes will be on what’s coming, which is projected enrollment numbers. This year is more difficult than previous years.”
Families, especially those whose children are in private schools, expect higher school earnings than previously due to the expected rise in registration fees, tuition fees and transport fees (sometimes announced at some schools), and because of the high price of education. On the one hand, school supplies and clothes.