Algeria shares with Morocco and Tunisia a coastline with great potential as a tourist attraction. Its tourism industry, however, has always lagged behind that of its closest neighbors. Mainly because of the government's failure to promote tourism and the lack of well-run quality hotels and tourist sites, the number of foreign visitors to Algeria in the 1980s never exceeded onefourth and one-sixth of those to Tunisia and Morocco, respectively.
Since 1989, however, the government has shown greater interest in promoting tourism because of its potential as a source of foreign exchange. As part of its efforts to liberalize the country's economy, the government has decentralized the national tourism company and granted autonomy to many state-owned hotels. The government has also allowed foreign companies to run newly constructed hotels, such as the Hilton just outside Algiers. Another large hotel (350 rooms), managed by the French chain Sofitel, opened in early 1992 in the Hamma district of the capital. The government continued to encourage local private investment and foreign participation in joint ventures, hoping to increase hotel capacity to 50,000 rooms within a decade. The government's decision to lift the DA35 million ceiling on local private investments was also expected to generate considerable hotel construction activity.
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