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Libya: The long shot of tourism
A development feature about the opportunities and hindrances of investment in tourist industry in Libya by foreign investors.
Fathalla Sultan opened a tourist agency at a time when tourism in Libya didn’t exist. “I was thinking ahead when I set up the company in 1994,” he told me. “At the time we were working with expatriates who wanted to have a look around the country in their spare time. We then received the first group of tourists from Switzerland in 1998 or 1999, but it was only in 2002 that tourism took off in a bigger way.”
Now there are more than 250 tour operators, and Fathalla’s company, Wahat Umm Algouzlan, is one of the largest, carrying about 10,000 tourists in 2006. And Fathalla is still thinking ahead: his’ is the only company that does the long tour across the Sahara Desert, east to west or vice versa, a grueling marathon that only the hardiest romantics undertake, less than a hundred every year. He talks with affectionate sensitivity about the inner desert, hundreds of kilometres away from the nearest road, and asserts that people increasingly seek adventure holidays, and the Sahara is an emerging adventure playground – remote, pristine, and spectacular. “Now we are working on a plan to have multi-destination tours,” Fathalla said with firm confidence. “The idea is to link a traditional destination – such as Malta or Italy or Greece – with Libya, a new destination.”
Even at 65 he remains a visionary and a leader, but tourism in Libya has grown in such a sudden surge that enthusiastic upstarts have seen dramatic momentum in short spans of time. One of those is Fessano W Tours, whose clients grew from 31 in 2001 to 533 in 2006. “Now I employ six people; I hired the sixth person last month actually,” said Hadi Bkai, the owner. “We have two streams of clients: we represent some European agents, and we also get groups who contact us independently.”
Libya has yet to rehabilitate its reputation of instability and eccentricity – and indeed the growth of tourism is still jolty – but any investor, local or foreign, that identifies the right niche can hit the jackpot. One of the biggest success stories is the Maltese-owned Corinthia Bab Africa, Libya’s only true five-star hotel. Opened in 2003, it has become a landmark and an institution in Tripoli; eighty percent of its guests are business people. Its lobby buzzes with activity; finding an empty room proved impossible when I was there, and at Fez, its flagship Moroccan restaurant, and one of the most expensive places to eat in Libya, there was a queue of diners waiting for tables on a Saturday night. “It’s not difficult to invest in Libya,” said Salvinu Farrell, the general manager. “The whole process is handled by an investment board that even has a section that deals specifically with tourism. It’s a one-stop service, and the process is smooth for as long as you go through the right channels.”
He’s talking about the Libyan Foreign Investment Board that governs Law 5 of 1997, the law that opened Libya to foreign investors in various sectors, including tourism. The investor-oriented law regulates the relationship between the state and the investor in a way that protects projects from arbitrary government interference. To date, the Foreign Investment Board has handled 156 projects worth US$6 billion.
On paper then – and for those who made it – Libya is an attractive country for tourism-related ventures. The country’s potential in tourism is huge. The attractions are varied and impressive: these include old and romantic oasis towns, intriguing Berber granaries and culture, spectacular Roman and Greek ruins, bewitching desert terrain (including the rock art, and the remains of the Garamantes Kingdom), and 1,900km of Mediterranean coast. Additionally, the people are friendly and hospitable, the country is relatively safe, and there is keen curiosity by Westerners enticed mostly by the romance of desert travel and the perception that the country is still unspoiled by mass tourism and Western influence. As Martin Dunford, publisher of the Rough Guides guidebook series, put it, “Libya is hot at the moment.” Yet the interest still remains partly latent, and after an initial burst in tourist arrivals, the growth appears to have hit a flat stretch. In 2005 Libya got 570,000 tourists, and the figure dropped 499,000 in 2006 (84,000 of them arrived on quick-stop cruises).
“At present the tourist industry is based almost wholly on desert travel and archeology,” pointed out Salvinu Farrell, the manager of the Corinthia. “And that’s a niche market – can you imagine, for example, a family with children traveling in the harsh desert conditions? You can’t have mass tourism in the desert, where the season is also short. Increasing the numbers entails the development of coastal tourism; this will lure tourists who spend most of their time at the beaches, and then take a short tour of the desert and archeological sites. It’s the model that is successful in neighbouring countries.”
I found parallel thinking at the department of tourism; the target is to increase the number of beds by 100,000 in ten years, eighty percent on the coast. At present there are bottleneck shortages of hotel rooms in certain areas, Tripoli mostly, where a spate of new private hotels can hardly manage the demand. Rooms in Tripoli are taken up by other type of visitors – mostly Tunisians (who are not counted or classed as tourists) who make the short run to Tripoli for cheaper shopping than home – and it can be a struggle finding an empty room in Tripoli during the peak season at Christmas time. In the desert it’s a different story: in February, still the high season, I extrapolated an occupancy that hovers at around thirty percent.
One of the major obstacles hindering runaway growth is the difficult visa regime. Independent travel is strictly prohibited, and the requirement of taking a guide and, in the case of a group of five or more, a police makes the country artificially expensive. This is something that keeps young people away – partly because of the cost and partly because young travellers don’t like to be herded in groups – and the majority of visitors at present are over 45 years old. These older travellers are more mindful of comforts and service, two essentials that are patchy and erratic. A group of Germans and Austrians that I travelled with in the desert complained about value-for-money: that the country is overpriced in relation to the quality of the service and the quality of accommodation (many rooms outside Tripoli are rundown; slacking in maintenance, and kitted with cheapish things such as mattresses made of sponge).
In a way, the requirement of a mandatory guide is understandable. In a country where few people speak English, and where all signs are in Arabic, non-Arabic speakers would be in a riddle just to get around. And Ahmed Basher, an information advisor at the department of tourism, elaborated on the dangers of independent travel in the Sahara: “It’s a wild, empty, uncontrolled place, and many problems might arise if tourists are allowed to wander independently – people might get lost, there are fierce sand-storms, there could be crime by non-Libyan immigrants, and so on. So a guide and a tourist police are there for the tourists’ own safety, and to show them the best of the country.”
“The government wants to avoid incidents and headaches,” Fathalla concurred. “Besides, there is still the perception that foreigners are spies and up to no good. We cannot change so quickly – changing the mentality takes time.”
The “mentality” is something that every businessperson I spoke to mentioned, and it’s something that has the most insidious implications for foreign investors. The government’s own stated policy that tourism is one of the prime motors of the new economy is stymied by hesitation and vacillating policies. “Do they want mass tourism?” Salvinu said. “You get mixed messages. For example, the post of a Minister of Tourism has recently been voided.” (The Ministry of Tourism is now becoming a Tourism Authority.)
“Tourism is here to stay, that’s for sure,” elaborated Hadi, the tour operator. “We want tourism, but at the same time we are apprehensive that tourists will change our way of life. This change in our culture is inevitable in the long-term, yet we are trying to delay the change. The government is in fact making it incrementally easier for us to develop our business; every year the regulations are loosened slightly to give us more flexibility – the question now whether we can make changes without disfiguring our customs and culture.”
It was the vexations of this “mentality” – an abstract term applied to people’s wariness or mistrust of foreigners, as well as the inefficiency and absent-mindedness of the Libyan way of working – that pushed out Adolph Anastasi, a Maltese restaurateur. A year ago he became a consultant, and a potential minority-stakeholder, in two upscale restaurants in Tripoli owned by a Libyan businessman. One of them was at the top of the Fateh Tower, a landmark high-rise that holds expensive shops and international business offices. It’s one of the most expensive restaurants in Libya, attracting mostly foreign businesspeople, and doing Mediterranean food under Adolph’s supervision. “Libya certainly needs foreign expertise to develop a modern tourist industry,” Adolph said. “I had many ideas on how business could be increased through marketing, but in return I wanted a cut of the profit. And they made it difficult for me. The owner and I agreed on terms of profit-sharing verbally, but when I wrote down our verbal agreements in a contract for both of us to sign he did not find the time to meet me. Besides, government policies display an uncertainty. You can see this in the way visa procedures keep changing: sometimes visas become easy to procure, and then suddenly there is a policy turnaround and visas become difficult again. After seven months I gave up.”
Adolph also laments about the larger haphazard service, and about the fact that on many occasions the management decisions that would be agreed upon weren’t implemented. I heard tourists fret about similar slackness: the patchy infrastructure, the monotony of the food, the limited choice of preserved foods in shops (particularly outside the cities), and the rubbish everywhere, something that annoys Europeans with environmental sensibilities. Fathalla, who keeps insisting about the necessity of professionalism, and who sharply pointed out that his company is relatively expensive to maintain a high standard, also riles against the ‘mentality.’ “Professionalism is a problem,” he said. “Many tour companies get a license to operate, but they don’t know how to give a service. The mentality has to change – Libya is still stuck in the mindset where things are done in a makeshift manner.”
The government knows this, and it’s exactly the reason why foreign investment is encouraged. The Corinthia does maintain a high standard of service: the successful format applied is to have expatriates hold the posts of top management, leading the rest, the eighty percent of the staff who are Libyans. “It’s not difficult to find Libyan staff to work in a five-star hotel,” said Salvinu, the manager. “We don’t look for employees qualified in the hotel industry; we look for English-speakers, and then train them intensively in our academy. We do invest a lot of time and money in training, but this is not very different from what we do in other countries – training is an integral part of a five-star-hotel operation. Among Libyans, what you lack in finesse and technical ability is made up by friendliness and politeness. A waiter in the Czech Republic, where I also worked, would be more efficient but less friendly.”
If there is a sign of the Corinthia success and confidence in Libya, aside from the high occupancy, it is the new project the Corinthia are putting finishing touches to. It’s called Palm City, an exclusive self-contained enclave of 400 housing units, including villas with pool, as well as general facilities such as shops and restaurants, that the Corinthia will lease out to high-income expatriates. Like the Corinthia there are others doing big things in Libya: Emaar, Dubai’s renowned property developer that is currently building the world’s highest building in Dubai (the Burj Arab), have recently got involved in Libya in a major way. The idea is to build a mini-city, along a strip of 40km on the coast, primed as a centre for tourism, education, and high-tech industry. And it will have its own laws too, like a state within a state; it will be the only part of Libya where foreigners can get 99-year-leases on land tenancy (at present foreigners can’t own land in Libya). “The government wants to start something similar to what Dubai has done, and it is basically being driven by the President’s son,” said Mohammed Ali, director of international projects at Emaar. “They will build a city, almost like a free zone but much bigger, with industrial and residential segments. The laws governing this city will be different from the rest of the country and the zone will be like nothing else in Libya. The government is planning to raise US$1 billion to build this city; Emaar will also be investing in it but the share of investment has not been decided yet. Our role will also involve providing expertise and know-how to the government because of our experience in Dubai.”
At present a masterplan for the city is being drawn up and, judging by the way things slug ahead in Libya, it might be some years before building starts. There is also the question of whether it would succeed or not. The history of grand schemes conceived by governments around the world has had mixed results – some have floundered as it’s always difficult to breathe life into a city created in a limbo, as opposed to organic growth.
Judging from the separateness of this planned city, as well as the general tourism policies, the indication is that the Libyan government’s idea, at least for now, is to keep tourists apart from Libyans by herding them in groups and funneling them towards resorts. The problem is that the experience of other places that have done the same, such as Bhutan, shows that these conditions and limitations will keep tourism a small industry. The optimism of businesses is that eventually the policies would have to relax so that tourism becomes one of the main industries in Libya – the stated government policy. It’s early days, and things are in a state of flux. “It's better that things are changed slowly,” Fathalla said. “That way we can manage the growth as we gradually improve our service and infrastructure – development takes time."
In the larger picture Libya has already experienced something of an economic rebirth in the past few years; ten years ago, tourism in Libya was a novel concept, now it is accepted as something here to stay. The government has been looking at Dubai as a model for Libya’s future, and business with the UAE has grown dramatically in recent years, so much so that Emirates Airlines has had to increase the frequency of flights linking the two countries. “The volume of passengers and cargo has escalated in the past two years,” told me Nasser Bin Kherbash, Emirates senior vice president for commercial Africa operations. “Since October 2005 we increased flights from 3 to 5 every week between Dubai and Tripoli, and we are now operating at an eighty percent seat capacity.”
Even Adolph, the Maltese restaurateur, has his focus trained on the country despite the initial disappointment. “I’m in discussion with someone at present on being involved in another venture,” he revealed. “It’s a new upscale resort on the coast, and it sounds like a promising and a serious project. I believe in the country’s potential, and I don’t give up easily: given the right partners and the right idea, investment in Libya can reap profits.”
(C) Victor Paul Borg 
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