By Amira Salah-Ahmed
CAIRO: Forget the reflex reaction that is “revolution tourism,” labeled and glorified over the past weeks as the cure for Egypt’s ailing industry.
At best it can be described as a protective band-aid that will one day have to be ripped off in order to properly deal with the core issues.
When the short-term effects — if even minutely lucrative — of peddling so-called Tahrir tours have faded, Egypt will still have to confront the issues which have long plagued the tourism industry.
Issues which have weighed down the progress of a sector that while vital to the overall economy is simultaneously lagging behind where it could and should be, given the country’s touristic treasures.
Tourism is one of the top three revenue earners for the economy, employing around 2 million Egyptians and contributing 11.5 percent of GDP in 2010, bringing $13 billion into the economy from 14.2 million tourists.
But for a sector which thrives on human capital, it is both oversupplied and malnourished skills-wise.
“Revolution tourism — this is temporary,” said Elhamy ElZayat, acting chairman of the Egyptian Tourism Federation and CEO of Emeco Travel.
It’s not the wave of the future, and as ElZayat points out, while the moment can wisely be capitalized on, down the line this kind of branding will only attract “special interest groups.”
Policy issues
Assessing the policies of former tourism ministers Ahmed El-Maghrabi (who later became minister of housing) and Zoheir Garrannah, ElZayat described a market oversupplied with travel companies and tourist guides but lacking in infrastructure and quality of service.
For a long time, Egypt boasted 1,076 travel companies, a number which rose exponentially in just five years. “Between the 19th century and 2006, we had [a total of] 1,076 travel companies — then in five years [the minister] granted 900 licenses,” he said.
“It created chaos from which we suffer now,” ElZayat added, welcoming the decision by recently-appointed Tourism Minister Mounir Fakhry Abdel Nour to stop granting licenses to travel companies.
The same applies to increasing the number of hotel rooms outside Cairo and Alexandria. “I told the minister specifically to stop granting any licenses to add a single hotel room except in Cairo or Alexandria,” he explained. The Red Sea resort towns of Hurghada and Sharm El-Sheikh are “saturated.”
With 120,000 rooms under construction, and 230,000 completed, ElZayat says Egypt’s occupancy rate is around 60 percent. More rooms will mean a lower occupancy rate, which results in prices going down.
Facilitating licenses also caused transport companies to mushroom, and with little regulations in place regarding the size of the fleet or quality of drivers, it made for a haphazard business.
“El-Maghrabi allowed the formation of transport companies with a 50-seat capacity, which is one bus [while] before it was 150. Those who have 50 seats, it’s basically the driver and the owner [running the show]. So one goes and sells the bus service at a coffee shop while smoking a shisha, for whatever price. It’s not proper selling, it’s not systematic, and it causes accidents,” he explained.
Egypt’s notoriously congested and treacherous roads coupled with drivers’ casual attitude towards basic driving rules grant it the unfortunate status of having one of the highest traffic accidents rates in the world. This calamity in the making inevitably affected tourists being transported from point A to point B.
As ElZayat asks bluntly, “Do you have enough roads? You don’t, so why add pain to misery? How can I drive a bus if I don’t have the road?”
Drivers also need to be taught about medical assistance and first aid in case of accidents. “It’s not just moving the bus,” he said.
Aladdin Khalifa is the managing director of Egypt Travel Experts and area representative of the World Federation of Tourist Guides Associations for Africa and the Middle East.
Khalifa said some companies had a “monopoly” over certain services and markets, and were granted a majority of licenses in hotels and cruises. “The coming period will hopefully see a better distribution of services,” he said.
Too many guides
On another note, there are drastically more tourist guides in Egypt than is needed by the industry.
ElZayat broke down the numbers: There are currently 17,000 licensed tourist guides. In the early 90s, a time when Egypt received 2.5 million cultural tourists a year (out of a total 3.4 million), there were 3,000 guides. Today the 17,000 cater to a market of 3 million cultural tourists (out of a total 14 million annually).
The result, he said, is low salaries for guides, which have not “increased since the 60s. Plus they are not well trained.”
Khalifa said salaries need to increase in every sector, and tourist guides are no exception. “They make LE 50 per day which is less than 10 percent of the per diem their counterparts are making worldwide.”
He added that fresh graduate tourist guides were granted permits as a cosmetic way to “lessen the unemployment rate, but it was merely contractual. They don’t know enough”
Globally, cultural tourism is in decline, falling from 60 percent to 18 and now down to 12 percent, according to ElZayat. “People are less interested in culture, more interested in casinos, discos, outings. We are lucky we have the Pyramids so we’re round 14 percent.”
And to those who question why Egypt fails to attract, say, 50 million tourists a year, ElZayat pragmatically asks: Do we have the capacity?
“We need infrastructure, carrying capacity. Can the Karnak Temple, which is the largest monument, take more then 5,000 tourists a day? No. You will damage it.
“Can the tombs of the Valley of the Kings take more than 5,000 if you distribute them in the 26 open tombs? If you bring 5 million tourists in the dessert, you will kill it – it becomes a valley.”
Egypt earned around $13 billion from tourism last year. France makes $33 billion with 71 million tourists. Spain’s income from 56 million tourists is $37 billion, “because people stay more and spend more.” The income of the US from 40 million tourists is $50 billion.
“Do we just want the number? I want a mix,” ElZayat said, meaning the young backpackers as well as big spenders at luxury hotels. “But I don’t want everyone to come in the five-star hotel at the price of a three-star.”
Quality focus
The quality of service in Egypt leaves much to be desired.
“Tourists complain about minor services such as transportation from hotel to site, not having clean bathrooms at landmark areas such as the Pyramids, day-to-day dealings, vendors who hassle tourists to the point of fear,” Khalifa said.
“Workers in the industry need to understand the culture of the tourists they are dealing with, their background…and the level of harassment has to go down,” he added.
Despite having the potential to be a premier travel destination, Egypt is mostly thought of as a historic must-see which — fortunately for travelers — comes at a cheap price.
“People are conscious, they want value for money. We are cheap by comparison but people are willing to pay more to get better service, and are willing to pay more and be repeat business, which means you don’t have to pay twice to advertise your destination,” ElZayat said.
A campaign launched by authorities around six years ago was meant to enhance tourists’ experience in order to increase the number of repeat visits, since Egypt has a surprisingly low rate considering the sheer size of the country and variety of places to see. However, efforts fizzled out quickly and the initiative did little to solve the problem.
According to Khalifa, “Repeat visits are low, around 50 percent when it should be near 60-80.”
The key to tackling this problem is proper and continuous training of the industry’s work force.
ElZayat said, “Our industry is the hardware and people are the software, if you don’t keep trying to reach a world standard, why would people come? They could go to Thailand where the service is better, or Lebanon.”
In Egypt, he said, people “are nice with a smile but it doesn’t mean they are efficient.”
Khalifa concurred saying that in the coming phase, “tourism investments should focus on services, hospitality, languages, human resources and skills training.”
For now
The number of tourists who left Egypt during the last week of January amounted to 210,000, according to CAPMAS, which equaled a $178 million fall in tourism revenues. February cancellations cost $825 million.
What little business coming in is going to Sharm El-Sheikh, Hurghada and Taba. There is 20-30 percent occupancy in the Red Sea, according to Khalifa, citing a current travel ban from Russia — one of Egypt’s main markets — as keeping 3.5 million tourists from coming.
ElZayat said, “It’s better than no business at all, but it’s not even enough to keep the workforce and to keep the income flow just for the upkeep of hotels and the travel companies, or give enough business to buses.”
When revenue dried up, the industry resorted to laying off temporary workers, then permanent staff were given unpaid vacation because there’s no business, and then some started working part-time. These cost-cutting measures have cost the industry around LE 70 million.
Down the line, this will create another problem given that “we are not in a market where you find staff easily,” ElZayat said. Other problems include paying basic utility bills, especially with summer coming.
Numbers will not return to normal before November, he said, “provided people don’t stop selling Egypt. I am sure that people will not because Egypt technically is a standalone destination.”
Beltone Financial expects tourism receipts during the current fiscal year to fall to around $9.5 billion.
One way to salvage the situation, ElZayat suggested, is a merchant bank formed with a varied portfolio to help Egypt’s struggling sectors by investing directly in businesses as opposed to giving out loans. “We need someone who is willing to take risks and share the profits,” he said.
The exposure Egypt has received over the past months covered a lot of marketing “mileage.”
The key in the coming period would be to focus on promoting the Red Sea Riviera in a way that downplays the regional impact.
And what of Tahrir tours? ElZayat said it can undoubtedly be included as part of the Cairo sightseeing.
“If we piggyback on what happened properly and timely with all the ideas out there now, if we think outside of the box, Egypt can boom provided, we attach a lot of importance of the quality, it’s not the price.”
