Tourism--Learning the mechanisms of competitive growthJordan Times (Amman, Jordan)
August 20-21, 1998By Waleed A. Hazbun
IN HIS article (Jordan Times, Aug. 1, 1998) Riad Khouri
suggested in these pages that tourism could soon become
the fuel needed to propel the growth of the Jordanian
economy. While I agree that tourism development could
become a catalyst to the economy, I fear that too often
people assume that this process will unfold simply from
increased flows of tourists. Instead the mechanism I wish
to highlight has more to do with how increased levels of
private investment, international aid, and eventually
revenues in tourism may give Jordanian tourism firms
(such as hotels, travel agencies, crafts shops etc.) an
opportunity to learn to organise and manage themselves,
and the sector as a whole, better. This mobilisation of
the sector can itself serve, by example, as a propeller
to the economy dealing with the pressures of economic
globalisation.As Khouri points out, the foreign exchange and jobs the
tourism sector provides the economy are vital to its
health. And I also agree that tourism is a sector that
has been able to benefit somewhat from "peace." But to
understand how such benefits can become fuel for economic
growth is not as simple as it may appear from looking at
projections for tourist arrivals.Jordan has had many forms of revenue inflow (such as
worker remittances), but rarely have these led directly
to the development of competitive firms and sustainable
development.In particular, it is the metaphor of the Airbus as the
future image of the economy with which I want to take
issue. I find this a useful image to consider even if the
author might not have meant the metaphor as literally as
I will take it. In his essay, Khouri writes that Jordan
could transform its economy from a "propeller-driven
affair" to "an Airbus jetting through the economic
stratosphere," with, because of a rush of tourists "no
empty seats." The danger I see in this metaphor (and a
similar notion held by many in the tourism industry) is
that it suggests that struggling firms faced with, for
example, severe over-capacity and heavy debt may meet
their saviour in the form of a rush of the millennium
tourists.One obvious pitfall is that this rush will be smaller
than anticipated and will die off quickly just as the
flood of tourists did after 1995. In the end most
Jordanian firms may have learned little about the
production of tourist services from this period of high
inflow. Thus, the fear is that even if tourism inflows
continue to increase after 2000 (still an open question),
the economy may again see a sinking of investment in
creating capacity with little thought about how the
value-added of tourism products is created and how firms
and government agencies might reorganise themselves and
their operations to become more competitive locally and
globally.Instead of waiting around for the Airbus to fill up the
industry, relevant state authorities should be seeking to
promote products value and develop strategic management
and organisational skills.If Jordanian firms learn how to make the product of
Jordanian tourism better and possibly unique in the
region, then the propulsion to the economy will not be
just in terms of a short term boost in foreign exchange
or jobs, but the experience of producing a world class
product in a globally competitive industry.Key to this challenge is the realisation that
international tourism can be a knowledge, skill, and
interpretation-rich sector.This becomes crucial if Jordan wishes to avoid the
development of low-cost mass tourism which dominates much
of the Tunisian and Israeli tourism sectors. In other
words, we need not just increase our capacity (more hotel
rooms, tourist buses) but to increase the quality of our
tourist services and the richness of tourism experiences.The actual mechanisms needed for achieving this sort of
development vary by firm and activity, but some general
strategies can be suggested: The first is that skill
training and retraining of everyone from the kitchen
staff to tour guides should be invigorated and
performance should be monitored and benchmarked (that is
they should be compelled to increase their performance
over time).Another key demand is that firms should learn to innovate
themselves and not simply imitate what another successful
firm has done before them. This requires both knowledge
of the production of tourism services as well as a good
understanding of the possible markets.Some of the most successful operations in the private,
public, and NGO (non-governmental organisation) sectors
in Jordan are organisations which are not weighed down by
old, ossifying hierarchies which limit the innovation and
adaptability needed for instituting the change mentioned
above. In each organisation trained and capable staffs
should be given well defined tasks and the autonomy to
carry them out. Their experiences and ideas should be
passed back to management such that a learning function
should come to replace the monitoring function of this
relationship.The benefits gained from successful tourism development
need not be limited to the economic sphere. For example,
the environmental impacts of tourism is an issue everyone
should be concerned about. The tourism sector and
relevant NGOs could team up to promote both cost cutting,
as well as, environmental sustainability by installing
water saving devices and promoting awareness of water
conservation.Firms in developing economies are generally thought to be
risk-adverse and only in search of low risk, short term
profits. This sort of behaviour leads to less emphasis on
long term strategy, innovation, and reorganisation. The
opportunity presented to the tourism sector now is that
the current invest and aid, as well as, the expected
increase of tourist flows in the year 2000 can encourage
innovations, improvement, reorganisations by willing
firms. While there are signs throughout the sector of
such transformations under way, it is far from certain
that these ongoing efforts will be enough to turn the
sector into a propeller of economic growth. The tourism
sector should mobilise its associations to promote
innovation and the state should encourage public
institutions to guide these transformations forward.The writer is working on his Ph.D. thesis on the
development of the tourism industry in the Arab World, at
the Department of Political Science of the Massachusetts
Institute of Technology in Cambridge, Massachusetts. He
contributed this article to theJordan Times.