By Abdel Razeq Shoueikhy
Tourism bosses are hopeful the creation of a new high council for tourism could be a magic pill for Egypt’s beleaguered tourism sector, both in times of crisis and when conditions are good.
The Supreme Council for Tourism is charged with implementing a strategy in coordination with different ministries and authorities in order to revitalize the sector.
Amani El-Torgoman, president of large Egyptian travel company Travco, which operates 58 hotels throughout the country, discussed what the tourism sector needs from the Government to help it recover.
Workers and officials in the tourism sector know about the problems hindering efforts to reinvigorate the industry and were working hard to find solutions, she said.
El-Torgoman said that tourism activity could provide much needed financial support to Egypt, helping ease the current budget deficit, which exceeds 200 billion EGP, assuming the necessary conditions were met.
She was confident that support of the tourism sector’s recovery after a period of stability in the 33 months since January 25 would help improve the Egyptian economy.
About 70 industries are connected to tourism, with the number of workers directly or indirectly associated with it numbering about five million.
El-Torgoman also said “invigorating tourism requires convening the supreme council for tourism and a reconsideration marketing efforts and investment incentives”.
(Alborsa Photo)
In the past year Travco had received over EGP 820 million in revenue from over 950,000 tourists and expects revenue to decline to 800 million EGP in the next year, earned from about 750,000 customers.
Egypt’s tourism should not be marginalized in domestic decision-making, she said.
She also indicated a need for full coordination between other executive offices. The Supreme Council for Tourism operates under the umbrella of five ministries – tourism, aviation, antiquities, culture and interior.
“The Supreme Council for Tourism will work on introducing some of the agencies and authorities or governors to solve the problems that the tourism sector faces. It will also eliminate the isolated issues that afflict the sector.”
For example, construction of a road or the laying of tracks for a railroad in an area must be done with full cooperation with the Ministry of Tourism, she said.
The Ministry must be consulted on the project to determine the potential benefit it has for the sector. Tourism was crucial in Egypt, where it accounts for about 11.3 per cent of the country’s GDP, she said.
According to the Ministry of Tourism, the sector earned about $12.5 billion in 2010. That number fell to $8.8 billion in 2011, before rising to $10.5 billion in 2012.
El-Torgoman pointed out that the decline in the number of arrivals in the past two years negatively affected Egypt’s income from tourism. She expects revenues to continue to fall this year.
El-Torgoman elaborated further on the nature and importance of the work of the Supreme Council for Tourism.
The council’s legal basis exists but it needed to be convened to fulfill its responsibilities on the ground.
It was capable of fixing the problems that the sector faces both in crisis times and in normal conditions by facilitating cooperation between various ministries, agencies and authorities in accordance with specific timeframes.
She also pointed out that it was not possible for tourism to be active without cooperation with the airlines, security apparatuses, antiquities agencies, the Ministry of Culture and other ministries.
El-Torgoman called for a restructuring of way Egyptian tourism services are marketed in major markets around the world. She suggested a novel type of marketing that addresses each community in different ways according to their culture and available media.
She also expressed that the $40 million budget for promoting Egyptian tourism should not be allocated to just one marketing company but distribute to multiple companies in each market separately. This way each market could be targeted differently according to its needs.
This budget could be divided into different geographical areas depending on their current interest in Egypt. The companies would be evaluated on an annual basis to review their commitment to the contracted terms, she said.
“We cannot address the English tourists in the same way in which we address the French, German or Russian tourists in Eastern Europe. Every group of tourists is looking for specific tourism services that fit their tastes and culture. Egypt needs to offer a diversity of tourism products that meet the needs of different consumers. Therefore it must rely on a number of companies each promoting Egypt in a different market.”
She went on to say that it was not worthwhile to market Egyptian beaches in East Asia, whose tourists come to Egypt to visit the classic cultural sites for example. They also preferred short visits to multiple countries in a single geographical area.
El-Torgoman described the current marketing campaigns abroad as too general and lacking sufficient targeting or market studies. Turkey, for example, which is one of Egypt’s strongest competitors, used entertainment in marketing its tourism to major markets.
She also explained that Turkish television shows had been distributed throughout the Arab world for the past five years and is watched by a large number of Arab and Egyptian citizens. Thus many of them want to visit Turkey to see the places portrayed in the shows. Egypt should think outside the box in the search for new ways of marketing.
Egypt had huge potential to exploit its own film production in marketing efforts but licensing is difficult to come by, she said. The argument for being so restrictive always related to national security, meanwhile the restrictions benefit countries like Morocco who had also utilized film as a marketing tool recently.
Despite the difficulties associated with obtaining licenses, a large number of world filmmakers operate in Egypt. El-Torgoman believes that increased film production would make a substantial contribution to revenues as well as offer free promotional advertising.
Efficient marketing for Egypt as a tourism destination would also increase average spending in the country, which has dropped precipitously in the past 33 months. In the past three months, tourists have spent an average of $67 per night, compared with $72 at the end of last year and $85 in 2010.
She attributed the recent drop in tourist spending in Egypt to the fact the people were less likely to leave their hotel in the current period than in the period before January 25th.
At that time, tourists were spending four nights on the beach during a weeklong trip and the rest of the time visiting Aswan, Luxor and the Pyramids of Giza, all of which raised average tourist spending.
Meanwhile, in Turkey the average spending for tourists reached $120 per night and is sometimes more than $400 in certain hotels.
El-Torgoman criticized the incorrect perception that investment in tourism was limited to physical development such as construction projects, furnishings and food.
She also stated that there was capital directed at the marketing and promotion processes, which reinforces her call for outside the box thinking.
Workers in the tourism sector also needed to ask themselves about past measures that had achieved positive results and others that were not implemented. Furthermore, she asked them to think about the market situation, international tourism and the different political situations. El-Torgoman indicated that these were all questions that those responsible for tourists should keep in mind.
She noted that other countries in the region competing with Egypt succeeded in exploiting new marketing strategies to promote their destinations in key markets.
“Marketing needs to focus on artistic and archaeological events, in light of Dubai’s experience. Dubai succeeded in creating a global tourist agenda for conferences and sporting competitions.”
El-Torgoman called for a greater reliance on the private sector rather than on the tourism authorities in Egypt, pointing out that it was better at marketing and more flexible to deal with changing environments. The private sector determined its goals and worked effectively to attract visitors from all geographical areas.
Therefore the private sector carried out its marketing campaigns based on numerical studies and market surveys before directing its attention. There were markets that preferred cultural tourism, such as East Asia while other markets prefer beaches and considered cultural tourism of secondary importance.
El-Torgoman also said that marketing was an investment, therefore tourism companies in particular would care about what brought them a return from the market. For example, the number of planes expected to come to Egypt, the system in place for charter flights and economic development in general would all affect sales.
She pointed out that the problem with tourism in Egypt lay in the charter flights. Turkey was a strong competitor with Egypt during the summer season. The companies that marketed charter flights are owned by Turks, making Turkey the number one destination.
In that context, El-Torgoman stressed the necessity of establishing Egyptian charter plane companies. Germany has its own charter airline, Russian companies rent charter plans and Polish and Dutch companies lease from major marketing companies.
The existence of an Egyptian charter plane company would overcome the problem of cancellations and flight changes to other regions. This is especially true given that Egypt’s private tourism sector is unable to hire charter planes. Egyptian charter planes would facilitate marketing because the services provided by Egypt will be better than those provided by other countries.
Introducing charter flights provided by the government encouraged tourism companies to continue their marketing programs for Egypt. People changing their flights away from Egypt was a huge problem in the short term, so the Ministry of Aviation was an essential partner in attracting more travelers to the country. The ministry could help by reducing take off, landing and hangar fees.
El-Torgoman also said tourism had declined over the past 33 months by about 40 per cent but the last three months had seen the revenue fall off even more sharply. This was largely due to the travel advisories issued by a number of countries around the world.
All investment in the tourism sector had stopped, both in terms of new projects and completion of projects under construction. Banks had stopped providing loans for projects while corporate profits and liquidity were falling thanks to the decrease in visitors.
El-Torgoman said the current circumstances were forcing investors to request extensions for finishing their projects. In addition, investors faced weak revenues and a lack of bank financing, leaving them between a rock and a hard place.
“There have been attempts by the Minister of Tourism, Hisham Zaazou, to solve the problem by calling on the Central Bank of Egypt to support the sector. In this role, the Central Bank would provide loans to help investors complete projects and protect them from penalties for their inability to meet project deadlines,” she said.
El-Torgoman criticized the state for seizing lands from investors due to implementation delays and imposing penalties for the late payment of installments. The investors were in this position thanks to difficult circumstances faced by the sector in general and a lack of bank financing.
“A period of crisis might be appropriate to inject new investments thanks to lower costs and faster implementation times but investors are seeking safety first. Investors are looking for safety both in the streets and from laws that seize their land.”
Stability of the legal status of land and projects helped make Egypt more attractive to investors.
El-Torgoman said that establishing a billion dollar tourism investment fund would help solve a number of the problems but companies should be required to subscribe to it – especially since it would be tempting to contribute.
She stressed that Egypt needed to diversify its tourism investments to include hotels, services, entertainment and trade that would work to increase tourism revenues and increase average spending.
On the other hand, she pointed to the necessity to preserve the intellectual property for manufacturing replicas of Egyptian archaeological sites and artifacts. This was one of the best marketing tools for Egypt as a tourist destination.
El-Torgoman endorsed Dr. Mohamed Ibrahim as Minister of State for Antiquities Affairs, to prepare the law that would allow the Ministry of Intellectual Property to protect the rights of Egyptian archaeological products. She believed that these items could act as a silent ambassador for Egypt.
