Morocco's hospitality horizon: Navigating growth opportunities and challenges ahead of the 2030 World Cup

Introduction

The hospitality and leisure sector in Morocco is undergoing growth and transformation. Recent studies ¹ reveal that international tourism has injected USD9 billion into the country's economy, boosted by nearly 5,000 hotels and other accommodation facilities. This figure is expected to soar with the upcoming FIFA 2030 World Cup, which Morocco will be hosting alongside Spain and Portugal. It's interesting to see how Morocco is addressing challenges and seizing opportunities through infrastructure enhancements and regulatory improvements.

 

Investment demand

Hosting the 2030 World Cup demands strategic foresight and substantial investments:

• Organizing such a monumental event involves managing numerous concurrent projects, including infrastructural upgrades, which can be challenging for Morocco, a developing country.
• Morocco has begun planning and working on this. The country has approved the renovation of six major stadiums and the construction of a new one in Casablanca, with an investment of approximately USD20 billion allocated to these upgrades.
• According to FIFA, over one million visitors traveled to Qatar for the 2022 World Cup. This underscores the need for investments to increase accommodation capacity, as Morocco currently has only 280,000 beds (Statista Research Department, May 2, 2024).
• Transport infrastructure, including airports, roads, and public transport, must be upgraded to handle increased traffic. Morocco is collaborating with the UK’s Infrastructure and Project Authority to expand the high-speed rail network and improve connectivity.
• Maintaining the sustainability of new infrastructures and hotels in Morocco beyond the World Cup is perceived as challenging by the sector’s experts. And there's a question mark over repurposing the new hotels for regular tourism. The challenge is to ensure that the accommodation facilities are being designed to serve regular tourists to ensure their continued use and viability post event.

 

Regulatory challenges in focus

Several regulatory challenges in the hospitality and leisure sector are worth noting. They mainly relate to infrastructure development and hospitality, which can be categorized under two levels: FIFA-specific requirements and local laws constraints.

FIFA-specific requirements

In terms of compliance with FIFA Regulations, Morocco will need to navigate several regulatory constraints. Hotel classification and amenities will likely be scrutinized, with some properties requiring upgrades to meet star ratings and provide the necessary facilities for teams and officials. Some major local hotel chains began upgrading their facilities immediately after the COVID-19 pandemic. As a result, they don't feel the need to undertake any additional preparations for the upcoming events.

Obtaining the necessary licenses and permits for short-term rentals and guesthouses may also be a challenge, with the possibility of stricter enforcement of existing regulations.

During major events like the World Cup, market demand peaks, presenting a unique opportunity for hotels and other accommodations to maximize their profitability. But FIFA may set guidelines or restrictions on how much hotels and other accommodation providers can raise their prices during the tournament.

Beyond these specific regulations, staffing sufficiency must be addressed in less touristy areas. Hiring and training a large workforce while complying with labor laws concerning wages, working conditions, and workers’ rights should be managed efficiently. And hotels have to comply with health regulations, especially regarding food hygiene and sanitation. This is crucial to ensure there's no labor exploitation of migrant workers particularly, such as was the case during the preparation for the Qatar World Cup.

Local regulations constraints

Meeting FIFA’s standards for hotel quality and capacity can be complex. But it is controllable. Local laws add another layer of complication. These regulations apply to both new developments (greenfield) and renovations of existing establishments (brownfield).

We're seeing a surge of greenfield projects specifically in new zones created in the north and south of Morocco. These projects are often state led, involving strict development schedules and pre-approved construction programs with challenging commitments for developers (deadlines, minimum job creation). Land ownership transfer is generally subject to an investment agreement and obtaining permits based on the approved construction program. If deadlines aren't met, the developer could face cancellation of the sale, though a tacit remediation period is typically given. With the new investment charter adopted by the government in December 2022, these investment agreements are key as they offer investment support systems in the form of subsidies or grants for investment projects carried out in the regions or prefectures and in the priority sectors of activities.

In addition to these challenges, a practical issue often arises with greenfield projects: the land designated for development is frequently occupied by residents without legal rights. These occupants need to be displaced and compensated, despite not owning the land. This local challenge requires proactive management, as it can be a lengthy process that often delays projects.

For brownfield projects, renovations may require permits depending on the scope of the work. More importantly, existing brownfield sites often need upgrades to meet current classification, amenities, and safety standards.

 

Sustainability in Focus

Hosting the World Cup is likely to accelerate Morocco's hospitality sector's transition towards international sustainability and environmental standards. New greenfield developments are likely to be built with eco-friendly practices in mind (particularly given the water stress the Kingdom is currently facing), from energy-efficient construction materials to renewable energy sources. Renovating existing brownfield establishments might also embrace sustainable upgrades to meet these evolving standards.

 

Economic benefits targeted on tourism and global image

Although the investments needed to host the 2030 World Cup may present challenges for Morocco, they can also offer significant potential benefits.

Sporting events stimulate infrastructural developments and subsequent economic growth. Football in particular is perceived as a positive economic driver. For instance, Morocco’s football team reaching the semifinals in the Qatar World Cup has helped promote the country as a tourist destination, with Marrakech airport recording an increase in arrivals of more than 12% in December 2022 compared to December 2019.² Sporting events are powerful tools for boosting a nation's international image and attracting tourists.

Some experts agree that using the 2030 FIFA World Cup for infrastructural improvements can serve beyond the event, contributing to the country’s broader economic and social fabric.

 

Conclusion

Hosting the 2030 World Cup in Morocco presents a unique opportunity for the nation's hospitality sector. The strong support from stakeholders and Moroccans highlights football's potential to drive economic growth.

By investing in infrastructure and upgrading facilities, Morocco can position itself as a premier destination for international tourists while improving the quality of life of local communities and promoting regional development. The World Cup will act as a catalyst for these improvements, attracting a large influx of visitors and showcasing the country's rich culture, heritage, and hospitality to a global audience.

Morocco can use the World Cup to create lasting economic growth, job opportunities, and enhanced global visibility. With a focus on sustainability, Morocco's hospitality sector has the potential to position itself as a leader in responsible tourism, attracting environmentally conscious travelers and fostering a long-term positive impact that extends beyond the World Cup itself.

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¹ Notably by Mr. Saifaddin Galal in 2022
² Morocco Tourism Up Following Historic World Cup Run (voaafrica.com)