With its rich architectural and cultural heritage, Yemen is aiming to develop its tourism sector as one of the pillars of its economy, as it attempts to diversify away from hydro-carbons industries.

As Yemen’s oil and gas sector shrinks, overall economic growth is suffering. In 2007, GDP grew by 3.6 per cent, down from 4 per cent growth the previous year.

The Middle East is the key source of tourists for Yemen, representing 73 per cent of all visitors. European visitors account for 10 per cent while North Americans make up 5 per cent, according to US accountant Deloitte & Touche.

The World Travel & Tourism Council forecasts the value of Yemen’s travel and tourism sector will grow to $4.27bn in 2018, from $2.19bn in 2008. “The tourism economy of Yemen is projected to double in size from 2008 to 2018,” says Robert O’Hanlon, partner at Deloitte & Touche Middle East. “Significant efforts need to be directed towards improving infrastructure facilities, particularly in hospitality, which is a key requirement for attracting tourists from around the globe.”

The growth of the tourism sector is expected to generate about 466,000 new jobs by 2016, accounting for 6 per cent of Yemen’s total working population. This reflects a growth rate of 1.5 per cent a year. The sector currently employs about 400,000 people.

Tourist destination

Yemen certainly has a great deal to offer tourists. Desert and adventure tourism are already well integrated into the programmes of travel agencies, and the Tourism Ministry has focused on these as demand increases.

Yemen’s Socotra archipelago, which lies 354 kilometres off the country’s coast, has attracted particular attention. The island was recognised by the UN Educational, Scientific & Cultural Organization (Unesco) as a World Heritage site in July 2008. In August 2007, investors from the UAE pledged $5bn for the building of a tourist city.

A further 12 tourism projects with UAE funding have also been hinted at, but Yemen’s plans for the islands remain unclear.

Attracting GCC tourists and investors is particularly important for Yemen, given the numbers in which they visit the country. But there are barriers to attracting investment.

In April 2008, the US State Department reiterated previous warnings to US citizens, urging them to defer non-essential travel to Yemen because the security threat level remained high. The UK’s Foreign & Commonwealth Office issued similar advice in March.

The kidnapping of foreign tourists remains a threat, especially outside the main cities, and coupled with attacks on foreigners in 2007 and early 2008, presents a significant deterrent to tourism.

Moving about the country is a testing experience for many travellers. Visitors require government permission, and in some areas they are escorted by Yemeni police and are regularly stopped at the numerous checkpoints along the main roads.

With encouragement from the Tourism Promotion Board, the government is trying to make things easier, reducing the need for permission, and the number of checkpoints. Police escorts are to be replaced by more frequent patrols along the highways. More important, however, is the government’s relationship with the tribes that inhabit the areas surrounding Yemen’s main highways.

Improvements in the security situation are vital if Yemen is to attract new investors. Sanaa realises that foreign investors are critical to the success of any plan to promote tourism.

In March 2008, Yemen’s Prime Minister Ali Mohammad Mujawar announced a set of amendments to the country’s investment laws, aimed at improving the climate for foreign investors through tax incentives.

According to Ahmad al-Biel, director of Yemen’s Tourism Promotion Board, Sanaa is now considering amendments to the regulation of investment and other pieces of related legislation such as those covering taxes and customs duties.

A ministerial committee presided over by Deputy Prime Minister and Planning & International Co-operation Minister Ahmed Sofan has been formed to revise the investment laws.

The Tourism Promotion Board has actively sought to protect the country from the kind of mass-market resorts that have been made in other parts of the region. However, large-scale investment of any kind will not come until Yemen’s security situation improves.

Key fact: The estimated value of Yemen's tourism industry in 2018 - $4.27bn