The tourism industry in Egypt has been full of ups and downs since the 2011 Revolution. The sector in Egypt suffered a devastating blow, especially when a Russian passenger plane crashed in Sinai in late October 2015 and all its passengers were killed.
Notably, following the plane crash, Russia imposed a travel ban on Egypt, while the UK suspended all flights to Sharm El-Sheikh amid concerns over the airport’s security measures, banning travel to Sinai.
In January 2018, the Russian government gave permission for flights to resume to Egypt after a two-year hiatus, and Russian flights returned to Cairo in April. On the other hand, the UK is still imposing bans on travel to Sinai, and hence tourism to Sharm El-Sheikh is very limited.
However, although Russian tourists have not returned to Egypt until now, Egyptian tourism has recovered some of its revenues in the past year.
The markets of Germany and some countries of Eastern Europe, in addition to Italy and China have compensated part of the absence of Russian tourists.
Currently, tourism is recovering demonstrating that earlier, Minister of Tourism, Rania-Al-Mashat, said that the number of tourists to Egypt increased by 40% during the first nine months of 2018 (9M18), compared to the same period last year.
Thus, Daily News Egypt decided to dig further into the expectations of the tourism sector in 2019.
Furthermore, DNE decided to explore the discovery that it is expected to continue its recovery amid promising expectation for removing the European travel ban to Sharm El Shaeikh.
Moreover, experts argue that despite recently suffering from a terrorist bus attack, which claimed the lives of three tourists and one Egyptian individual, plans for the new year are still on-going and tourists are still arriving in Egypt to enjoy the end of year celebrations.
For his part, Adel abdel Razek, former vice president of the Federation of Tourist Chambers told DNE that tourism in Egypt was not impacted from this incident, noting that maybe there is a small effect on the number of the Vietnamese tourists coming to Egypt, adding that this effect will soon disappear.
Experts argue that 2019 will witness great growth in Tourism sector
abdel Razek stated that Egypt’s revenues from tourism in the period from January 2011 to December 2017 were meagre, compared to the name of Egypt and the tourism of Egypt, noting that by the beginning of 2018 tourism began to recover.
“I think now is the opportunity for tourism to return strongly in 2019, especially after the
Russian tourists who visit Egypt by way of Turkey or Israel,” he continued.
He said that the revenues of tourists used to achieve a growth of over 17% during each year in the period from 2006 to 2010.
“But now with all the efforts that were witnessed in the tourism sector in Egypt, I expect that tourism revenues will witness at least 25% increase in 2019,” abdel Razek expected.
He mentioned that tourism revenues will significantly contribute to Egypt’s foreign exchange (FX) reserves, anticipating that tourism revenues might contribute in 2019 with $10bn.
abdel Razek forecasted that tourism revenues might top the revenues of Suez Canal and also might approach the revenues which come from the workers’ remittances, which are the main source of revenues in Egypt.
Furthermore, abdel Razek’s promising forecast for tourism also included tourism revenues representing 12% of Egypt’s GDP, pointing out that at least 15% of Egyptians work in the tourism sector.
Agreeing with abdel Razek, Hesham El Damery, the retiring president of the Tourism Promotion Board Authority, stated that he also expects a growth in Egypt’s revenues from tourism in 2019, anticipating only 25% increase in them in 2019, noting that he expects that the number of tourists that will visit Egypt in 2019 will hike by about 18% or 20% in case the Russian travel ban on Sharm EL Sheikh was not removed.
“2019 is expected to witness a healthy growth in terms of tourism contribution to the GDP. According to WTTC and IMF, it’s forecasted to reach EGP 555bn by year-end, signifying an approximate 21% increase from 2018,” Christopher Lund, head of Hotels at Colliers International MENA told DNE.
Meanwhile, Magdi Benoudi, a tourist expert, told DNE that he expects about 30% hike in the number of tourists that will visit Egypt in 2019, leading to a growth in tourism revenues by about 30% also in 2019.
What are the reasons behind this growth and the hotspots areas in 2019?
After learning about the expected growth in tourism, it’s time to know what are the reasons behind this growth and what are the hotspot areas in 2019.
Concerning the reasons behind this growth, experts argue that the political stability witnessed in the country, the increase in hotel prices, in addition to Egypt hosting several events this year, the most prominent of which is the African Cup for football.
In that term the retiring president of the Tourism Promotion Board explained that Egypt currently has good relations with all countries, in addition to the stability in the political situation, and the security.
Concerning the other reason of raising the hotels prices, the former head of Egyptian Tourism Federation, Elhamy Al-Zayat, explained that most of the hotels, especially in Luxor, Aswan and Cairo, raised their prices, which is a very healthy sign regarding tourism revenues.
Along the same lines, Benoudi elaborated that during the seven years after the revolution, the cost of the all-inclusive day in a double room was between $10 and $12, which was very cheap.
He continued that starting from late December 2018, the all-inclusive double room cost reached between $17 and $20, thus Egypt began to return back by 70% to the old hotel prices that was witnessed in 2010.
Al-Zayat noted that what is happening now in Paris also helped in increasing tourism in Egypt as most Arabs returned back to Egypt.
Notably, the French people are protesting against a proposal to raise fuel taxes, but it has since developed into an expression of general anger over the high living costs and a particular discontent with French President Emmanuel Macron, thus lead Macron to decide to halt the rise in fuels tax, however the protester’s anger did not stop until now.
Talking about hotspots, Al-Zayat noted that Cairo will be the biggest in terms of revenues due to hosting a lot of conferences in Cairo’s hotels.
Agreeing with Al-Zayat, the Head of Hotels at Colliers International MENA, Christopher Lund said that Cairo is expected to remain a hotspot driven by cultural tourism, and is likely to gain a further boost in these types of visits off the back of increased marketing endeavours by tourism authorities.
“We also expect further growth in tourism demand for trips to coastal destinations. The increased popularity in sports tourism, especially for water-based activities, is bringing renewed life to Egypt’s coastal destinations, despite the absence of traditional source markets such as the UK and Russian visitors. Marsa Alam is one of the key destinations that is benefiting from this type of tourism,” Lund added.
Experts ensure that Egypt has to diversify its touristic base amid promising expectations for removing the Russian travel ban to Sharm El Sheikh
The touristic map or the touristic base is an expression that means the nationalities that top the visitors to Egypt. DNE dug into that matter to learn if the Russian and UK travel ban changed the touristic base or not for Egypt and how it will be in 2019.
The former head of Egypt’s Federation of Tourism Chambers told DNE that before the 2011 Revolution, Russian tourists were ranked number one in the touristic map of Egypt, followed by British and German tourists.
El-Zayat said that the revenues of Russian tourism to Egypt before the 2011 Revolution stood at about EGP 3m, while the British tourism revenues reached about EGP 1.5bn.
He continued that after imposing the Russian and UK travel ban to Sharm El Sheikh, the tourism sector suffered the most.
Thus it led DNE to ask about the expectations about removing the travel ban to Sharm El sheikh, by stating to El-Zayat that many people think that when Russia removes the travel ban to Sharm El sheikh the UK will automatically remove also its ban, he stated that this is not true, explaining that English people are facing serious internal problems, so it’s not in their current interest to remove the ban.
He continued that the Russian case is different as they were here presently on an inspection trip for Hurghada and Sharm El Sheikh airports and they approved Hurgahda airport but they still did not write their report.
Talking about the expected touristic map in 2019, El- Zayat stated that it might include the US, Canada, South America, Japan, Arab countries especially from the Gulf area.
El-Zayat noted that it’s very important to diversify Egypt’s touristic base, noting that this year, Egypt is celebrating the 150th anniversary for the opening of Suez Canal and that on that occasion Egypt is hosting a French exhibition that is about Ferdinand de Lesseps and the nationalisation of the Suez Canal, thus this exhibition will create new visitors to Ismailia and Port Saeed.
Agreeing with El-Zayat, El-Shamy stated that Egypt must diverse its touristic base, stating that through this diversity when any travel ban is imposed, Egypt’s tourism operations will not be affected as it has a different tourists from various countries.
He expected the entrance of new nationalities into Egypt in 2019, explaining that Egypt should not wait until the removal of the travel ban.
On the other hand, abdel Razek expected the return of the Russian Flights to Sharm El Sheikh, due attesting that Russians are very eager for trips to Sharm El Sheikh as they suffer from the freezing cold atmosphere in their country.
He continued that he expected that the top visitors to Egypt in 2019 will be coming from Russia, Germany, followed by England in addition to Eastern Europe.
Disagreeing with all the above experts, El Damary did not expect the removal of the Russian travel ban, seeing an opportunity from this ban in attracting new nationalities to come and visit Egypt.
El Damary explained that since 2015, Egypt began to attract non-traditional markets, including people from Ukraine, and Poland.
He continued that there are now also new markets which began to enter Egypt such as Serbia, Bulgaria, in addition to Korea, China, India, and Malaysia, noting that before 2014, only four markets which are Russia, Germany, England, and Italy were representing more than 75% of the annual tourism revenues of Egypt.
Furthermore, El Damary discussed benefitting turning every obstacle into an opportunity, thus he saw in the travel ban as an advantage. He explained that the average tourism spending in the last two years increased as the touristic base in Egypt changed, elaborating that the average spending of the Russian tourist is low, but now after the travel ban, Egypt witnessed visitors from US, the Gulf, and the Asian markets whose average spending is much higher than the Russian.
He expects that the German people will top the visitors to Egypt.
“Germany remains the largest external source market for Egypt and is forecasted to reach 1.5 million tourists by year-end, according to BMI statistics. The second biggest source market is Russia which accounted for 971,000 tourists in 2018.” Lund shared the same opinion as that of El Damary.
“We understand there is an on-going discussion regarding the resumption of UK and Russian flights to Sharm El Sheikh. The successful return of flights from Moscow to Cairo last year was viewed as a positive development. Obviously, it’s impossible to predict if flights from UK and Russia will be reinstated this year to the Red Sea destinations, but a prolonged period of stability would assist in the matter,” Lund expressed Colliers’ opinion on the resumption of the UK-Russian flights to Sharm EL Sheik.
Disagreeing with El Damary and Lund, Benoudi expects England and Russia to remove the travel ban, explaining that the English airline companies are putting pressure on the UK government and parliament to remove the ban.
Meanwhile, concerning the Russian ban, he forecasted that Russia will remove the ban in March, explaining that the Russian travel companies began to promote Egypt trips for March, thus this means that they might have information that the ban would be removed in March so that they may return back to market trips to Egypt.
Types of tourism that will lead the tourism movement this year
Experts argue that Egypt must deal in all kinds of tourism as it has different strengths to attract tourism. They all agreed on that Egypt has a large market share in the cultural tourism while the biggest market share is in beach tourism.
For his part, abdel Razek forecasted that beach tourism will continue to lead the movement this year.
Agreeing with abdel Razek, El Damary stated that beach tourism will remain number one as it is a global trend that increases every year, followed by the cultural tourism, conferences, and events tourism as Egypt will host many important events in 2019, the most prominent the African football cup, in addition to the medical tourism.
Talking about the cultural tourism which is currently ranked number two, Benoudi stated that Egypt should make an effort to regain the cultural tourism in the first rank as the cultural tourism revenues are much higher than beach tourism, elaborating that it brings income to the country through the ticket prices of the tourist attractions, in comparison with beach tourism where the tourist might come and stay in the hotel without doing any activity.
He continued that he is optimistic of the return of the cultural tourism in the first rank as many airlines companies began to have direct charter flights to Luxor and Aswan from Europe including Germany, Belgium, and Holland.
New types of tourism are expected to re-enter in 2019
Despite the traditional known types of tourism, experts spoke about some new types of tourism to enter the market.
For example, the ministries of environment and investment recently had a campaign to benefit from nature reserves in Egypt as tourist areas, thus this will add a new type of tourism to Egypt which is nature reserves.
Commenting on this campaign, abdel Razek stated that it is a very important kind of tourism as the world is currently focusing on the environmentally-friendly tourism and green tourism, so as much as we are enhancing this type of tourism, the more powerful Egypt tourism will become. He expected that this type of tourism will enter the Egyptian tourism market in 2019.
Meanwhile, Benoudi stated that nature reserves tourism is very important but Egypt will take about two or three years to compete in this type of tourism, explaining that the problem in this type of tourism is that there are some nature reserves that are already present or nearby touristic sites while, there are other nature reserves that are far away from the touristic sites, thus tourists will need safari cars which require special security forces, so he thinks it would take about two years to revive safari tourism.
El-Shamy and El Damary noted that the medical tourism began to thrive in Egypt which could have a great position in 2019.
El Damary also forecasted renewing religious tourism in Egypt, explaining that the holy family came to Egypt, travelling for about three-and-a-half years across the country.
Egypt started this project about two or three years ago, picking eight locations in four cities and reading them from the infrastructure perspective to receive the customers, clients, and tourists.
He continued that Pope Francis visited Egypt later in April 2017, performed mass and acknowledged the holy family’s journey in Egypt as an official Christian pilgrimage. This announcement puts the holy family tour on equal footing to Fatima in Portugal, suggesting that thousands of Christian tourists would visit Egypt in 2019.
Tourism Ministry seeks to launch new private equity fund to overhaul sector
The Egyptian government came a long way in renewing and recovering the tourism industry in Egypt, including the previously mentioned holy family tour, launching many promotional campaigns, and ensuring the security of all airports.
Moreover, earlier, the Minister of Tourism, Rania Al-Mashat, announced that the government plans to establish a new private equity fund to upgrade Egypt’s hotels as well as provide new investment opportunities in the sector.
Al-Mashat explained during her TV interview with Bloomberg that this step would be part of a comprehensive sector strategy, called ‘E-Trip’ that would include new legislation for the industry which would be introduced to the House of Representatives.
Commenting on this announcement, El-Zayat told DNE that if this private equity fund is activated, it will lead to great progress for Egypt in general, and to the tourism sector specifically.
He explained that the role of this fund is simply to help the financially troubled investors.
El-Zayat elaborated that this fund will buy shares from investors that are financially troubled, noting that the fund will buy the share by its current market’s value, and then it will sell it again by its market value during the selling time, either to the same investor or another, after an agreed period of time.
“Thus, this fund will benefit by the differences in prices between the time of the share’s purchase and sale, and on the other hand, the investors themselves will benefit by maintaining their investments without having the pressure of asking for bank loans,” he continued.
El-Zayat pointed out that activating this fund is crucial, as this it was launched before in March 2015, but it was not activated.
In March 2015, the Minister of Tourism, Hisham Zazou, declared during the Egypt Economic Development Conference in Sharm El Sheikh, the launch of a Tourism equity fund, in coordination with AYADY for Investment and Development, Cairo Capital Group, and the National Investment Bank, explained El-Zayat.
Meanwhile, the former minister said at that time, that the fund’s aim was to revive the tourism industry through restructuring finance for tourism projects, without imposing additional financial burdens on the state, declaring that the tourism fund would contribute with EGP 50m, targeting the collection of investments of nearly $250m to enhance the tourism sector.
Meanwhile, agreeing with El-Zayat, abdel Razek stated that this private equity fund is very important, calling for the government to take practical steps to activate it as soon as possible, because it will not only enhance tourism, but also the whole economy.
Also, El Damary explained that this fund will support tourism in many key areas including charter flights, and promotional campaigns.
Suggested procedures for government to implement in order to enhance tourism
Talking about the governmental efforts to attract more tourists, the Head of Hotels at Colliers International MENA stated that the government has been proactive in enhancing security across the country’s airports which has led to increased security perceptions amongst travellers.
“We are hopeful that the security incident in Giza at the end of December was as isolated incident and a period of stability returns. Second, significant opportunities exist in marketing Egyptian tourism abroad, especially to attract growing source markets such as China,” he added.
For his part, abdel Razek stated that the private sector, in collaboration with the Egyptian Tourist Chamber, should cooperate with the president to enhance this sector, explaining that the president is eager to see a strong tourism union that would benefit the sector.
abdel Razek noted that the promotional campaigns for tourism in Egypt are not enough, thus the minister of tourism should meet with the private sector and the Egyptian Tourist Federation to coordinate and set up a great marketing campaign.
He said that there is a huge difference between the marketing and promoting, explaining that what Egypt is doing now is promoting, but it has now to implement a good marketing strategy.
El Damary stated that the biggest obstacle facing tourism anywhere in the world is the stereotypical image of the state, noting that Egypt overcame most of the issues in this area.
He continued that Egypt must maximise the tourism experience because the tourist needs to remember Egypt with something especial, thus Egypt needs to develop a clear tourism strategy, including developing the aviation system as well as developing its airports.
It’s also necessary to spread a good community awareness, as tourism is directly linked to more than 17 or 18 industries and is indirectly linked to over 50 industries, thus the tourism strategy should be part of the general strategy of country, El Damary noted.
Agreeing with El Damary, El Shamy, stated that the most important thing in order to promote tourism is combating the stereotypical image of Egypt.
He added to that the need to launch a good marketing strategy for tourism, pointing out to the importance of including the private sector in the marketing strategy, explaining that every owner in the private sector could market for his hotel or resort, then the tourism promotion board authority could pay part of the cost of the marketing.