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The long road back for Egypt tourism

Arab Spring economies: Egypt's cash-strapped government is counting on a sharp rebound in the tourism sector to offer some solution to the nation's economic woes almost two years after the country's uprising.

Egypt’s tourism industry earned $11.5 billion at the height of the boom in 2010. Khaled Eliqi / EPA
Egypt’s tourism industry earned $11.5 billion at the height of the boom in 2010. Khaled Eliqi / EPA

CAIRO// Egypt's cash-strapped government is counting on a sharp rebound in the tourism sector to offer some solution to the nation's economic woes almost two years after the country's uprising.

Tourism officials have in the last few months engaged in an aggressive media campaign in Europe, the Arabian Gulf and other parts of the Middle East to promote Egypt as a tourist destination.

But businesses relying on tourists visiting the country's famous sites have had to contend with months of political turbulence in the aftermath of the uprising last year.

Last year tourism revenues dropped by almost a third, during the worst episode of political instability the country has seen since the early 1980s when Anwar Sadat, the president, was assassinated.

"It's still very, very quiet," said Magdi Bochra, who manages Elegant Voyage, a Cairo-based tourism company.

Mr Bochra said he was being forced to look for another job to make ends meet. "I have a lot of colleagues either leaving the industry or even leaving the country."

The industry employs about 12 per cent of Egypt's workforce, and is the largest source of foreign currency on average.

At the height of Egypt's tourism boom in 2010, the industry earned US$11.5 billion (Dh42.6bn), before crashing back down again in the proceeding years. The government has worked hard to lift travel bans to Egypt and encourage tourists back to the country.

It has resumed Nile cruises from Cairo to Luxor for the first time in nearly two decades.

Nahed Samir, the vice president of operations and business for Sonesta Middle East, a luxury hotel chain, said the company had benefited from the Nile cruise resumptions with the company's main ships running at 75 per cent to 85 per cent occupancy.

Speaking from one of Sonesta's cruise ships passing through Luxor, she said: "I'm looking around now and I see Australians, Europeans, Americans, business is getting much better for us."

The government has also attempted to change the perception that an Islamist-administration will seek to wipe out Egypt's lucrative tourism industry.

Earlier this month, the country's minister of tourism, Hisham Zaazou, charged with reviving this industry in the new government, said Egyptian beach tourism was here to stay, and any Islamic investment in the sector would complement but not replace resorts that vital to the economy.

Mr Zaazou said Egypt aimed to increase the number of visitors from a projected 12 million this year to about 15 million next year, a number that would equal the number of visitors in 2010.

"Technically this is a very important sector, so he's been doing some really aggressive campaigning for Egypt," said Mohammed Abu Basha, an economist at EFG Hermes. "Of course, his work depends on the state of security or perception of security, and that's really the work of the ministry of interior."

Protests against an anti-Islam video outside the US Embassy in Cairo have not helped, said Mr Abu Basha.

But it appears there is some early success in the ambitious drive to boost tourist numbers, with monthly government statistics showing visits breached 1 million earlier this year for the first time since the uprising.

The number of tourists coming to Egypt in the first half of the year climbed 26.8 per cent to 5.2 million, versus a year earlier, according to the government statistics agency.

That still doesn't meet the 6.9 million visitors that came to Egypt in the first half of 2010, the nation's best year for tourism, but it reflects a significant rise.

Another silver lining has been Egypt's Red Sea resort destinations - a far cry from central Cairo where the country's most precious artefacts in the Egyptian Museum stand side-by-side with burnt-out buildings and crumbling roads.

Hotel operators in resorts such as Sharm El Sheikh report occupancy rates of 80 per cent to 90 per cent, compared with rates of about 45 per cent for hotels in Cairo.

Despite the focus on tourism, economists and analysts say there is still much to be done for Egypt's economy, which cannot rely on just one revenue stream.

"Egypt cannot depend on just one sector no matter how big or profitable the sector is. Egypt is just too big for that," said Mr Abu Basha.

business@thenational.ae