Jordan hotel industry fears new tax will scare away international brands

Despite a rebound in tourism revenues last year, [Jordan's tourism] sector continues to face a difficult operating environment with both regional instability and the potential for increased government taxation weighing it down.

Tourism has long been a staple of the economy, accounting for 14% of GDP in 2010. The most recent information from the Jordan Tourism Board shows that the sector generated around JD2.5bn ($3.5bn) in revenues in 2012, an increase of 15.3% over the JD2.13bn ($3bn) recorded in 2011, despite a 7.3% fall in arrivals.

But the sector is facing new challenges, including a decision by the government in late 2012 to cut the budget of the Ministry of Tourism. Then in late March, the former minister of finance, Suleiman Hafez, recommended to the cabinet that the hotel sales tax be raised to 16%.