Executive summary
The competition assessment review of laws and regulations in Tunisia’s tourism sector is part of a broader project aiming at fostering pro-competitive reforms in the country. Tourism is a key part of Tunisia’s economy and has been an important source of job creation and domestic value added for years. This competition assessment review was carried out by the OECD to identify rules and regulations that may hinder the competitive and efficient functioning of markets in Tunisia’s tourism sector.
The report submits 351 recommendations that can mitigate harm to competition and facilitate market access for businesses engaging in tourism-related activities. Tourism market opportunities have gained renewed importance following the COVID-19 pandemic, which has severely affected the sector. A pro-competitive regulatory framework that avoids unnecessary costs and enables flexibility will be crucial for its sustainable recovery.
The recommendations in this report, if implemented, would create benefits for Tunisia’s consumers and economy worth Tunisian dinar (TND) 1.4 billion, or 1.2% of the country’s 2018 GDP, on the OCED’s most conservative estimate.
The project used the OECD’s Competition Assessment Toolkit, a thoroughly tested methodology that entails collecting and mapping all relevant legislation, and closely scanning legal texts to identify provisions that include potential restrictions to competition. The OECD identified the policy objectives of each provision and analysed each regulation in depth. This process included assessing whether restrictions were proportional to policy objectives. To better understand the provisions, the policy objectives and the issues involved in each activity, the OECD conducted more than 65 interviews with public and private stakeholders, and carried out an online survey among tourism professionals. The report proposes specific changes to remove or change regulations and practices found to be overly restrictive and which hamper market access and the optimal functioning of tourism operations. Those restrictions were grouped into three main categories: heavy and burdensome licensing requirements, onerous and overly detailed operational requirements, and the influence of incumbents in decision-making bodies. The project also contributed to the development of a Tourism Satellite Account for the first time in Tunisia.
Hotels and accommodation services account for the largest share of tourism revenues in Tunisia. Several regulations pose challenges to competition, business efficiency and growth, including complex licensing procedures, inflexible zoning policies and onerous operating requirements. This report proposes streamlining licensing procedures for facilities outside tourist areas, abolishing accommodation standards that are not enforced and which have no clear policy objectives, revising zoning controls, and lifting foreign ownership restrictions that may limit investment in the sector. Well-being services are strongly linked to the hotel industry and have the potential to support the diversification of Tunisia’s tourism sector. Conflicting regulatory provisions and an absence of adequate frameworks for some well-being services are exacerbating legal uncertainty and stifling investment. The report proposes measures to simplifying and harmonising the regulatory framework for hydrotherapy and removing related conflicting legal provisions.
Tourist restaurants are subject to licensing and classification procedures similar to those applied to accommodation services. The report recommends removing the mandatory fork classification system and requirements beyond those that concern hygiene, safety and consumer protection, and considering the transfer of specific size, layout and equipment details into an investor guide. Processes involved in applying for alcohol licences, which also apply to hotels and entertainment establishments, should be revised and streamlined. For other food service businesses, such as traditional and fast-food restaurants, the report proposes lifting sanitary requirements that impose undue costs on small businesses and which go beyond considerations of hygiene, safety and consumer protection. Authorities should consider other regulatory options for street food hawkers or vendors that wish to operate such facilities as food trucks, for instance granting temporary site authorisations for public areas.
Transport is a vital part of Tunisia’s tourism industry, and the second-largest contributor to sector revenues. Tourist transport remains subject to several restrictions, limiting its provision exclusively to Category-A travel agencies, with vehicles able to be driven only by individuals holding a professional licence issued subject to specific requirements. The report recommends abolishing the exclusivity granted to these travel agencies to offer tourist transport services and lifting the distortive eligibility requirements for professional licences. The report also proposes abolishing specific qualifications, minimum fleet sizes and age limits that impose undue burdens on car rental businesses. Taxis and other non-regular public transport services are also vital contributors to tourism in Tunisia. The assessment suggests that regulatory changes are necessary to ensure a pro-competitive market for these services and to reduce burdens on market participants. The report recommends eliminating duplicative licensing requirements, revising criteria defining taxi quotas, and reviewing those criteria more regularly.
Travel agencies are essential to Tunisia’s domestic and international tourism industry. Despite the introduction of an ex-post notification procedure and cahiers des charges, or sets of specifications, sector regulations still include several barriers to entry, such as specific equipment and operating requirements, professional qualifications and minimum share capital, distorting competition and fuelling informality. The report makes a number of recommendations, including opening to competition services that can currently be provided only by travel agencies, removing the distinction between Category-A and Category-B travel agencies, ensuring that specific operating requirements are proportional to business needs. Tourist guides are subject to an outdated regulatory framework with rigid, cumbersome licensing procedures, onerous and superfluous requirements, and a requirement to renew their professional licences annually. The report recommends that authorities simplify the requirements for professional licences, as well as their validity and procedures for their renewal.
Cultural services have the greatest untapped potential for tourism diversification in Tunisia. Heritage concessions are at the heart of this potential. The report recommends regulatory changes to minimise the conflict of interest arising from the business model of the Agency for Heritage Development and Cultural Promotion, though a better definition and clarification of its role in the allocation of heritage concessions. It also recommends consolidating the current framework for heritage concessions and ensuring that it is more open to private initiatives, more flexible, and conducive to competition. Private galleries, private museums and arts and crafts workshops, are mainstays of a vibrant cultural environment, and the report proposes lifting specific requirements for capitalisation, space allocation and qualifications, and abolishing mandatory notifications of cultural events and programmes.
Sports and recreational activities are subject to cumbersome licensing procedures at the local level, conferring significant discretionary power on authorities and deterring market entry. This explains in part why investment in these activities is weak and has not exceeded 10% of total tourism investment over the past decade. The report analyses a selection or services and proposes several regulatory changes.
Marinas have the potential to put yachting tourism in Tunisia on a new trajectory. To this end, the report recommends accelerating the publication of the implementing regulations for the Maritime Ports Code, to resolve conflicts of competences between the various authorities. In complement, the report proposes a number of policy recommendations targeting yachting and recreational vessels, such as setting clear conditions for the authorisation to sail yachts, clarifying customs rules and procedures for the use of foreign boats under the temporary import regime, and streamlining yachting permits procedures. Dive and water sports centres could also benefit from a streamlining of their respective authorisation and licensing procedures, the publication of clear and transparent guidelines for evaluating applications, and the adoption of appropriate regulatory inspections and enforcement frameworks.
Finally, the tourism market overall would be advantaged by an easing of several administrative burdens identified in the report, which makes several recommendations to improve regulatory quality, streamline investment licensing and compliance inspections procedures, and lift restrictions on foreign investment.