TOURISTS RETURN TO CALMER MIDDLE EAST

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If you build it, they will come.

The tourism industry in the Middle East is banking on that principle now that peace and political stability are on the doorstep-building hotels, joint promotional campaigns, relations with tour operators and tourism offices abroad.

The most promising areas for tourism growth and development are Israel, Jordan, Egypt and Lebanon, industry experts agree. The opening of the borders between Jordan and Israel following the peace agreement between those two countries already has had an immediate effect.

Significantly more tourists are crossing into Jordan from Israel daily, drawn by the spectacular ancient city of Petra, the beaches and the modern capital of Amman-once off-limits to Israelis and difficult for other foreigners to access.

Egypt and Israel, whose tourism industries have weathered the violence in the region with great difficulty, have been quick to recognize what the lure of neighboring Jordan can do for them and vice versa. As a result, the three countries have banded together to promote themselves in Europe and the United States. The logic: Tourists may be willing to travel to the Middle East if they can see two or three countries for just a little more than the price of one.

The Florida-based United States Tour Operators Association said tour packages combining at least two of these three countries have become very attractive to travelers. In Israel alone, 1993's record of 2 million tourists is expected to double or triple in the next five years due to the peace, according to the Israeli Ministry of Tourism.

Both Egypt and Jordan are hoping to tap into that supply.

"The winner in the short run is Jordan," said Dani Pipano, president of Gate 1, a Philadelphia tour wholesaler that promotes packages for travel agents to sell to tourists. However, "Jordan is not yet prepared for thousands of tourists, so it's limiting daily visitors to Petra," he said. "The country needs more hotels, travel agents and taxis."

Jump-starting Jordanian tourism may require some elbow grease. Hilton International, planning to build hotels in Israel, Egypt, Saudi Arabia and Qatar within the next two years, predicts that by 1998, 40,000 U.S. tourists a year will travel to Jordan. Yet the marketer plans no hotels for the country.

"The land is cheap, but there's no infrastructure-no sewers, no nothing," said a spokesman for Hilton Hotels Corp., Beverly Hills, Calif. "There aren't many hotels in Jordan to begin with," and getting the infrastructure going may take about five years, he said.

Tourism officials in the countries are hoping the Aqaba Gulf coast will become the "Riviera of the Middle East"-but investors are badly needed.

"I believe in the future of this area, which is so rich in opportunities," said Tomasso Zanzotto, chairman and chief executive of Hilton International, during a recent visit to Cairo. "This is an area blessed by historical heritage, traditional values, natural beauty and a sunny climate.... on the doorstep of Europe, the single most affluent market in the world."

The most active hotel chains in the Middle East are Hilton International with six properties under construction, Inter-Continental Hotels Group Ltd., London, and Holiday Inn Worldwide with five each. Marriott Corp., Hyatt Corp., Forte Hotels, Meridien Hotels, and Movenpick Hotels International also are developing new hotels to catch up with Sheraton-with 20 hotels in 10 Middle East countries, the leading hotel chain in the area.

In a push to put itself back on the tourism map, Lebanon has recently reopened its tourism offices in London and Cairo and expects to open eight more worldwide by the end of this year.

Lebanon's ministry of tourism has teamed up with the World Tourism Organization and the United Nations Development Program (UNDP) to promote the famous archeological sites of Sidon, Tyre and Byblos with various pamphlets.

Lebanon's billion-dollar reconstruction plan has enticed British, Lebanese, Saudi and U.S. companies to spend millions of dollars to revamp hotels destroyed during Lebanon's civil war in 1975 and to build new resorts on the Mediterranean. Before fighting broke out, Lebanon had 569 hotels which also drew tourists to glamorous mountain ski resorts, beaches and Beirut's sophisticated shops, restaurants and nightlife.

Reconstruction of the Hilton is under way, and the Vendome and Marriott Hotels are scheduled to open in April.

According to Dana Ciraldo, executive VP, Hospitality Valuation Services, Mineola, N.Y., the peace process and business potential in the area are spurring the growth.

Mr. Ciraldo said that while the Middle East is a natural magnet for tourists, people have stayed away in the past several years because of the area's political instability.

Hoteliers agree. "The peace process certainly provides for the reopening of some Middle Eastern cities," said Roger Conner, VP-communications, Marriott Corp., Washington.

John Russell, president of Days Inn, a property of Hospitality Franchise Systems, New Jersey, said his chain just opened a new property in Galilee in Israel and he believes there is more potential for development of mid-price hotels.

Perhaps the toughest tourists to woo back to the region are incentive travelers. But there is renewed confidence that it can be done. Last month, the Society of Incentive Travel Executives, a New York-based company that coordinates incentive travel for multinational corporations, opened its first chapter in the Arab world.

"The incentive travel industry is the most sensitive of all types of tourism," said Ramy el-Shawan, president of the Cairo chapter, acknowledging that given its recent brushes with extremist violence, Egypt is a tough sell. "If Egypt is not attractive or portrayed as messed up by the media, then a trip here cannot be used as a motivator for a multinational sales force."

In the past, Pepsi-Cola Co., Daimler-Benz, Rentokil, Olivetti and Xerox Corp. have used trips to Egypt as incentives for employees.

"Competition is really severe," Mr. el-Shawan said. "The Far East is our main competitor for Europeans and for Americans, it is Europe."

Nevertheless, he feels that the region is on its way back and that the image of Egypt's internal problems with extremists can be corrected. "Since incentives are a year or two ahead, it takes time for positive developments to take hold," he said. Just last month, representatives from incentives houses were brought to Cairo to convince them that the situation has improved.

And tourism in Egypt is picking up, albeit slowly. In 1994, the average hotel occupancy rate climbed to 56%, compared with 43% in 1993 and 48% in 1992, according to the Ministry of Tourism. Those figures are expected to soar following the recent launch of a $40 million advertising and promotional campaign in Europe. TV ads targeting Egypt's biggest markets-Germany, Italy, Japan and the U.K.-are by CM Lintas, London. Todd Pruzan and Alan Salomon also contributed to this story.

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