Wednesday,18 October, 2017
Current issue | Issue 1285, (3 - 9 March 2016)
Wednesday,18 October, 2017
Issue 1285, (3 - 9 March 2016)

Ahram Weekly

Reviving tourism

Nesma Nowar reports on attempts to rebuild Egypt’s tourism sector

Reviving tourism
Reviving tourism
Al-Ahram Weekly

The government is pressing ahead with plans to revive and support Egypt’s battered tourism sector. On 23 February, the Central Bank of Egypt (CBE) launched an initiative to support tourism, similar to the one launched in 2013 but with significant amendments.

The initiative includes the deferral of debts owed by the tourism sector to the banks for a maximum of three years, according to a statement from the CBE, which added that the initiative will be valid for a year from the launch date.

The statement said the initiative came after meetings with sector representatives and in light of the tourism sector’s importance as a mainstay of the economy, being one of the country’s main foreign-currency earners.

It added that the meetings had highlighted the need to establish a special unit in the CBE that would contribute to the restructuring of the tourism sector’s debts and coordinate between clients and banks taking part in the initiative.

Elhami Al-Zayat, the head of the Egyptian Tourism Federation, praised the initiative, but said that not all the banks were cooperating in implementing it. “I’d expect more support from the banking sector because it has gained a lot from tourism,” Al-Zayat told Al-Ahram Weekly.

He praised the Ministry of Electricity for agreeing to postpone the tourism sector’s dues for six months and then allowing them to be repaid in installments over two years. However, he said that these initiatives were simply “painkillers” that will not solve the problems of the sector, even if they are much needed as support at this critical juncture.

The tourism sector has suffered since the 25 January Revolution because of the political instability that followed. It was more recently battered by the downing of a Russian plane in Sinai that killed 224 people on 31 October last year.

Egypt’s tourism income dropped to $6.3 billion in 2015, compared to $7.3 billion in 2014, with a total of 9.3 million tourists visiting Egypt last year, 600,000 fewer than in 2014.

Besides the Russian plane crash, the problems of the tourism sector have been exacerbated by Egypt’s current dollar crunch, and foreign airlines operating in the country have been unable to repatriate revenues because of the dollar crisis.

Air France-KLM said it has been unable to repatriate upward of LE100 million in revenue, and added that the delays are making it increasingly difficult to operate in the country.

Cees Ursem, Egypt country manager for KLM, told Reuters that the company is facing a “very serious” problem because the revenues are blocked at the banks, making it hard for the company to sustain operations that have to be paid in dollars. All foreign carriers have the same problem, he said.

Minister of Tourism Hisham Zazou said in a TV interview last week that negotiations are underway with the airline companies that would allow the CBE to reschedule the overdue revenues.

The murder of Italian student Giulio Regeni in Cairo recently has added to the tourism sector’s blues, with Zazou saying that it has had a very bad effect on tourism. Samir Abdel-Fattah, CEO of the Red Sea Hotels Company, said the murder has “put an end” to the flow of Italian tourists to Egypt, which he said was already weak before the student’s death.

“The current crisis is the worst in Egypt’s tourism history,” Abdel-Fattah told the Weekly. He said that since the Russian plane crash, hotel occupancy rates in Sharm El-Sheikh have fallen by 90 per cent and by 80 per cent in Hurghada.

He added that many hotels in both cities have shut down as a result, and that the hotels that have remained open are operating at an occupancy rate of five per cent at most. This in turn has led to many layoffs, Abdel-Fattah said.

Al-Zayat said the tourism sector has lost some 900,000 workers since the 25 January Revolution, representing half of the sector’s workforce.

Abdel-Fattah said the sector’s losses are piling up every day, and he is not optimistic about the upcoming summer season. He said that tourists usually make reservations well ahead, but they could not do this because of the halting of flights to Sharm El-Sheikh.

Following the Russian plane downing, the UK, Russia and other countries halted flights to Sharm El-Sheikh, and there has been no indication of when the flights are likely to resume.

Abdel-Fattah is optimistic that tourism would recover, but he is not sure when it will happen. “The tourism sector may get sick, but it will never die,” he said, adding that the sector has weathered many crises in the past.

The Tourism Ministry is also expected to launch a marketing campaign for Egypt soon. The launch of the campaign was originally planned for November of last year, but was postponed following the Russian plane crash, Zazou said.

Zazou said the ministry is working to revive the sector by exploring new markets that could export tourists to Egypt, such as Morocco, Kazakhstan, Azerbaijan and the Czech Republic.

During his visit to Kazakhstan this week, President Abdel-Fattah Al-Sisi said he was looking forward to an increase in the number of Kazakh tourists visiting Egypt, and he welcomed the direct flights from the Kazakh capital Astana to Sharm El-Sheikh starting next March.

Zazou added that his ministry is also working to increase the number of Chinese tourists visiting Egypt, which increased from 61,000 in 2014 to around 115,000 in 2015. He said the ministry will ask for an increase in flights from China to Egypt in order to encourage more Chinese tourists to visit Egypt.

The ministry also signed a cooperation protocol with the United Nations World Tourism Organisation (UNWTO) last week, with the purpose of strengthening and developing the tourism sector.

According to the protocol, the UNWTO will provide long-term technical and political support for Egypt’s tourism sector, in addition to crisis-management expertise. The agreement was announced during UNWTO Secretary-General Taleb Rifai’s visit to Cairo last week.

During his meeting with Prime Minister Sherif Ismail, Rifai discussed measures to accelerate the recovery of tourism in Egypt and praised the support being given to the sector.

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