CAIRO: The Egyptian Company for Touristic Resorts has struck a deal with Al Shahin Group for Investments, a Jordanian company, to sell 1.5 million square meters of Sahl Hashish on which the group intends to build a resort with a marina for a total investment cost of $300 million.
Recently, the Egyptian government has been selling off land in the North Coast and Sinai to foreign investors and developers as a means to increase FDI in the country and boost the economy, as the tourism industry (one of the largest markets in the world and ranked as the 28th biggest tourism destination) is considered the bread and butter of the Egyptian economy.
Tourism is the number one contributor to the Egyptian economy, amounting to 22.1 percent of Egypt s foreign exchange earnings. By the end of 2005, the tourism industry had grown by five percent, and investments in the sector have increased due to this.
The number of companies established in the country increased from 86 in 1994 to 1,352 in June 2003, according to the General Authority for Investment and Free Zones (GAFI). The Number of hotels and tourist villages has also increased within the last decade, going from 752 in 1995 to 909 in 2004. Currently, the industry directly and indirectly employs 2.2 million people, which equals to around 10 percent of the country’s labor force.
In 2004, the tourism industry brought in $6 billion and the Suez Canal nettled more than $3 billion, making the industry one of the largest contributors to the increase in reserves in the country and one of the largest industry foreign currency earners in the country.
According to Minister of Tourism Zuheir Garana, the government is intent on selling land to developers, both local and foreign, at a nominal rate in order to encourage growth in the industry.
At the end of 2006, the tourism industry is expected to have garnered $7.2 billion, compared to the $6.4 billion it netted last year. Tourists in Egypt are also forecasted to reach 9.6 million in 2006, in comparison to the 8.5 million who visited the country last year (up by six percent from 2004). The country is also planning to attract 16 millions tourists in the next six years, said Minister on Investments Mahmoud Mohieddin at the World Economic Forum on the Middle East held recently in Sharm El Sheikh.
In order achieve this goal, the country needs to build 50,000 hotel rooms annually, requiring an annual investment of $1 billion.
According to GAFI, the greatest growth in the industry is expected to come from the European generating markets of France, Germany and Italy. Statistics from the Central Agency for Public Mobilization and Statistics (CAPMAS) found that a total of 4.3 million tourists visited Egypt from May to October 2005. The report also found tourists to have spent some LE 4.5 billion in 2005.
A CAPMAS report also stated that European tourists topped the list of tourists who visited Egypt, making up 29.9 percent of all tourists who visited that year, followed by Asian tourists, at 3.9 percent, African tourists, 3.1 percent and tourists from North America, making up 2.6 percent of all tourists. In 2005, the number of American tourists also increased by 15 percent from 2004. The number of Arab tourists who visited Egypt in July 2005 amounted to 270,942, an increase of 21.1 percent compared to the same period in 2004.
Currently, Egypt leads in the industry’s growth in the Middle East region, with a 25 percent market share.
International Tourism Receipts in 2004 reached $6.12 billion. The direct and indirect impact for tourism on GDP represents 11.3 percent.
