The decline in tourism revenues limits the capacity of companies to develop better services, and has eventually led to a bad reputation for Egypt as a tourism destination that competes with other destinations in the region.
According to officials in the Tourism Investors Association and the Chamber of Hotels, efficiency and quality of tourism services in hotels were affected greatly during the past period due to weak revenues.
Adel Al-Sherbiny, Deputy Chairman of the South Sinai Tourism Investors Association, believes that the past four years have negatively affected the hotels’ capacity for replacement and renewal operations carried out by companies annually. He added that more than 60% of hotels are not able to carry out replacement and renewal operations.
“This, indeed, affects the companies’ capacity to develop better service, in addition to eventually resulting in a bad reputation for Egypt as a competing tourism destination.” he said.
Tourism revenues reached $12.5bn in 2010, and then retreated to $8.9bn in 2011. They recovered slightly in 2012 to reach $10bn, before declining further in 2013 with $5.9bn, while last year they increased to $7.3bn.
According to Al-Sherbiny, during the last period the phenomenon of driving prices down disproportionately to boost competition appeared in hotels, which led some hotels to set prices at $15 per room per night. He added that these prices will negatively affect Egypt’s tourism reputation.
Within the last four years, tourism spending has declined to less than $59 per night in 2013, compared to $85 per night before the 25 January Revolution. However, spending improved in the first half of 2015 and reached $73.3 per night, according to an official at the Hotels Chamber.
The official, who preferred anonymity, said that revenues announced by the Ministry of Tourism are questionable because a great percentage of citizens whose home countries are going through political turmoil are in Egypt, especially Syrians, Palestinians, and Sudanese, which makes these numbers unreal.
Among the tourist areas that witnessed a huge decline are hotels in Taba/Nuweiba, Luxor, and Aswan, as well as floating hotels, according to the official. He added that some hotels in Luxor rented rooms at $11 per night.
Luxor and Aswan include 21,000 rooms, 4,000 of which are in hotels and 17,000 are in floating hotels.
Hani Gawish, member of the Tourism Investors Association in South Sinai, said that operational costs have significantly jumped in the last four years, and are now between 20% and 30%. He added these peaks are in remote areas in Nuweiba/Taba and Marsa Alam.
Gawish believes that renting prices were the highest, followed by food, and energy prices. These rises, according to Gawish, limit hotels’ capacities to raise efficiency of tourist services, especially during the current low tourist flow.
