The difference in mentality between older, more traditional
business owners and younger, more multi-cultured start up leaders has become so
wide, it feels like we have two economies in Jordan. The pandemic brought back many
expatriates with their own cultures and living standards. The opening of
Jordan’s economy has allowed over the past 20 years for people to study abroad
and return home with diversified standards. Both scenarios played a role in
adding new flavors to Jordanian society, which paved the way for new
industries, sectors, and businesses to flourish.
اضافة اعلان
We all started to notice farm rentals, a JD60 million industry
that draws from a tradition of renting summer homes to family members and friends
and has evolved into its own independent sector. The travel restrictions
created the perfect opportunity for this new vertical in the commercial real
estate sector to flourish. Having spent the past six years in Jordan, I noticed
that Jordan is an expensive place to be in if you want to maintain a similar
level of recreation that enjoyed in the Gulf, Europe, or the US. In fact,
spending a weekend in Aqaba would cost just as much as a weekend in Istanbul,
Cyprus,
Georgia, and many others, where nature is well taken care of and higher quality
services are offered. These new summer home rentals have struck gold providing
a reasonably priced alternative to booking a weekend trip abroad or breaking
the bank on a weekend at a hotel in the Dead Sea. The demand for those summer
homes in Jordan whether in the northern lush green side or the seaside has
spiked very rapidly to the extent that over 90% of rental farms on the market
now are built for the exclusive commercial purpose of daily or weekend rentals.
This new sector refreshed the economy and created an opportunity for a unique type
of domestic tourism. It also provided an alternative for newly weds to have
their dream wedding without overspending (mind you these summer homes serve the
younger generation that does not fall for any stigmas associated with renting
out someone’s property for a day or two).
To many, summer homes became a weekly
activity, given the number of people it can accommodate. This increased people’s
commercial activity which in turn helped stimulate the economy. It has also
promoted domestic recreation which incentivizes people to grow interest in the
local market rather than travel for mini vacations.
This should all sound great, but two days ago
lobbying pressure from wedding hall owners, among other unions, put pressure on
the government to limit the operation of vacation home rentals under the claim
that the units are being rented to newlyweds and are killing the wedding hall
industry — a sector that is already affected by
COVID-19. The pressure also
caused several vacation homes to halt operations. But what caused the most
damage is the fact that growing demand for vacation homes and rental farms has
led many entrepreneurs, many of whom are Jordanian, to jump in and jump in big,
taking out loans and setting up companies to manage their properties. Imagine
this: A sector that is less than six months old that brought in a large number
of new local and foreign investments has now been halted due to pressure by old
school unions that do not want to embrace change. I believe this will discourage
most entrepreneurs and lead to shutdowns as well as severely diminished trust
in Jordan’s market.
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