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A Rebirth For The Middle East?

Maher Haggag is a 35-year-old Egyptian entrepreneur who, like 15 percent of the country's workforce, depends on tourism for his livelihood. He has designed a series of inflatable pharaonic dolls—King Tut, the jackal god Anubis—that are easier for travelers to pack than bulky alabaster or wooden souvenirs. Haggag knows his market. As a tour guide in the nineties, he worked with Egypt's biggest spenders, the Americans.

"One time I was leading a group on the Nile and mentioned that the next day we'd visit the west bank," he remembers. "In the morning the hotel woke me to say the group members were asking for their passports. I went to find out what the problem was and they thought we were going to the Palestinian territories. I explained that we were going to the west bank of the Nile.

"Americans," says Haggag, "don't understand the region very well."

Although plenty of Americans have more familiarity with the Middle East today, of course, many do not—a fact exacerbated by the sharp decline in American visitors, particularly since the 9/11 terrorist attacks. If in the late nineties one of the key issues facing the region was how it would develop to handle growing demand from American travelers, today it's unclear to many if those tourists will ever return.

Certainly, much depends on an end to conflict there, as well as to terrorism by Islamic groups around the world. But as Antoine Corinthios, Four Seasons Hotels' president of hotel operations for the Middle East, notes, there is a potentially lasting problem of image: "The region is perceived negatively by Americans. You have all the headlines in the papers, all the images on TV."

Nonetheless, like many other companies, Four Seasons is optimistic about the future. It plans to open a new property in Doha, Qatar, in 2004, another in Damascus, Syria, in 2005, and a third in Beirut in 2006. These will be added to recent openings in Amman, Jordan; Riyadh, Saudi Arabia; and Sharm El Sheikh in Egypt, where President Bush stayed during his summit with Arab leaders this past spring.

Already there are some good signs. Although Israel is a favored U.S. ally, its tourism industry continues to suffer from the state of war that followed the outbreak of the second Palestinian intifada in 2000. The country's Ministry of Tourism is hoping for 1.2 million tourists this year, versus the 2.6 million who came in 1999. The other nations of the region are doing better. "You couldn't find a room in Beirut or Dubai this summer," says Peter Voll of High Country Passage, a tour operator in Redwood City, California.

Egypt's numbers for 2002, for instance, show that while American travel to the country was down 34.1 percent from 2001, the number of Europeans increased by 14.4 percent. Arabs, especially those from the Gulf states and Libya, are also coming in record-breaking numbers, up this year over last by 16 percent. These wealthy Arabs, accustomed to vacationing in Europe and the United States, are traveling more in the Arab world for the same reason many Americans are sticking close to home—to avoid places they see as potential trouble for themselves.

Tourism may be the signature industry of the global economy, but what that industry looks like in a given place depends on historical and cultural peculiarities. In the Arab world, Dubai, Saudi Arabia, and Egypt present different models for the future.

Dubai, part of the United Arab Emirates, didn't discover oil off its shores until 1966, long after it was found in Saudi Arabia. So, unlike the Saudis, Dubai had planned for its future without petrodollars as part of the equation.

"Even when oil was discovered," says Ashaia Haroun, an information officer at the U.A.E. Embassy in Washington, D.C., "it was decided that the future of Dubai was not in oil, but in trade." As Haroun explains, this was natural, since Dubai has long seen itself as a port city devoted to commerce.

Today Dubai is profiting from being one of the most open cultures in the Arab world. Its economy has emphasized specialized services, such as those provided at its Media City and Medical City, which depend less on site-specific requirements than on technology and infrastructure. Dubai's tourism program largely follows the same model.

There's little cultural tourism in Dubai; instead the focus is on shopping, beaches, and luxury hotels. One of Dubai's most spectacular current projects is the Palm, two man-made offshore islands that will include 30 hotels and an underwater park when completed in 2005. The approach seems to be working: between 2001 and 2002, Dubai enjoyed the world's largest growth in tourism.

The emirate's success has been noticed by other Arab states. Qatar, for example, might be the next Dubai, says Four Seasons' Corinthios: "There's a construction boom right now, and, more to the point, progressive thinking in the government." The country is currently building a resort on a man-made island north of Doha, with hotels and amusement parks.

While Dubai and Qatar are on friendly terms with the United States, neither is yet a major destination for Americans. The number of American tour operators running trips to Dubai grew 17 percent between 2001 and 2002—a respectable figure, but hardly the 28 percent jump made by Japanese operators to this Emirate, or the 69 percent increase by those in Australia and New Zealand.

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