Moroccan Tour Operators Struggle Amid Tourism Boom and Digital Disruption

As tourism begins a cycle of strong growth with some 104.7 billion dirhams in revenue and 17.41 million arrivals in 2024, more than half of tour operators are in fact on the verge of bankruptcy.

Having failed to anticipate the change in customer purchasing behavior, the profession is condemned to reinvent itself by expanding its portfolio of activities. The improvement in the Umrah business will not be enough to avoid the breakdown.

Moroccan tour operators are in a paradoxical situation

While tourism indicators – 104.7 billion dirhams (MMDH) in foreign exchange earnings and 17.41 million arrivals in 2024 – are breaking all records, the majority of travel agencies are going through “a dramatic situation.”

Of the 2,000 listed in the Kingdom, half are on standby, according to estimates by the National Federation of Travel Agencies of Morocco (FNAVM). While international demand for trips to Morocco has picked up dramatically (+20% last year), these agencies owe their survival only to the dynamism of religious tourism, particularly Umrah.

The most surprising thing about this crisis that is hitting tour operators is the contrast with the form displayed by outgoing, an activity that should in principle be captured by travel agencies. Indeed, Moroccan households spent 24 billion dirhams on personal trips abroad, according to the latest figures from the Foreign Exchange Office.

This package includes, in fact, leisure travel, medical care, school fees, the pilgrimage to Mecca and the Umrah. Normally, this improvement should have an impact on the economic situation of the agencies. This is not the case, confirms a professional. Two years ago, the issue of airline tickets represented 30% of foreign travel expenses, which allowed tour operators to “secure” their income a little.

On domestic flights, agencies charge 120 dirhams as a service fee to the customer, 240 on medium-haul flights and 480 on business class bookings. However, for the same ticket, if the customer buys it via the airline’s website, he makes at least a saving equivalent to the fees charged by the travel agency. Airline ticketing, which used to be a safety net for tour operators, is shrinking due to the rise of disintermediation.

Tour operators now only capture 35% of activity

The digital wave in the travel industry and the radical transformation of tourists’ purchasing behavior have caused major damage to Moroccan tour operators, even if the latter deny not having anticipated these changes.

However, the structural decline in package holidays was supposed to sound like a warning to the profession. It ended up shattering the economic model of intermediaries. In Morocco, TO activity flows now represent at most 35% of stays, even if Agadir continues to display a much higher average thanks to the density of its “all inclusive” clubs. With an average occupancy rate of 75% in 2024 at the national level, the “all-inclusive” is experiencing a second life, because it better meets the constraints of the purchasing power of customers, explains an operator.

Most of the 17.4 million international tourists who visited Morocco last year did not take the “historical” routes that some tour operators seem to be clinging to. Online platforms such as Booking.com or Expedia, which are very present on the national market, are directly accessible to travelers. They can search for and book flights, hotels and other tourist services without necessarily going through an agency.

Indeed, booking a plane ticket and a hotel room anywhere in the world is now within reach with a click of a mouse, provided you have a credit card. Defenders of the Internet mainly highlight the possibility of obtaining cheaper prices. This is true in some cases because the consumer avoids possible administration fees charged by the agency.

The booking platforms themselves act as intermediaries between hotels and customers, allowing the latter to compare prices and reviews of a structure to make an “informed” decision. For most of the tour operators interviewed, we are not far from denial.

They unanimously rage against “unfair competition from large online booking platforms, hoteliers and the informal activity of small players who sell trips on social networks.”

They are demanding even more protection for their profession and say they do not understand why Booking.com continues to sell hotel reservations to Moroccans residing in the country while the same service is prohibited in Turkey. As in the golden age of the 1990s, Moroccan tour operators are demanding a new regulatory protection barrier. In other words, new barriers to entry in a sector whose economic model is shattering.

Tour operators who anticipated the impact of digital transformation on their business have expanded their activity to other services including the sale of train tickets and packages that include car rental. A reform of the Insurance Code plans to open up the possibility of selling insurance policies to them. But insurance brokers are already standing up to this new potential competition.

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(Featured image by Cristiano Pinto via Unsplash)

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First published in LES ECO.MA. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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