Wednesday,13 December, 2017
Current issue | Issue 1291, (14 - 20 April 2016)
Wednesday,13 December, 2017
Issue 1291, (14 - 20 April 2016)

Ahram Weekly

Going the extra mile

Sherine Abdel-Razek reports on a new plan to revive Egypt’s ailing tourism sector

Economy
Economy
Al-Ahram Weekly

Political instability and a series of violent events following the 25 January Revolution has driven tourists away from Egypt.

Incidents involving tourists, like the accidental killing of Mexican tourists last year and the downing of a Russian airliner over Sinai in October, have put the safety of Egypt as a touristic destination in question. The case of the Italian student whose tortured body was found in Cairo last month further darkened Egypt’s reputation abroad.

The figures spell it out. The losses of the sector over the last five years are around $24 billion. The number of tourists visiting Egypt declined from a peak of almost 15 million in 2010 to around 9.5 million in 2015.

The importance of the sector lies in the fact that tourism is Egypt’s main foreign currency earner and employs 12.6 per cent of the workforce either directly or indirectly, with dozens of professions depending on it.

Government figures show that, on average, tourism contributes 11.3 per cent of GDP and 14.4 per cent of foreign currency revenues in Egypt.

The first quarter of this year saw the number of tourists decrease by 40 per cent compared to the same period in 2015, according to the newly appointed tourism minister, Yehia Rashed.

Speaking to Reuters on Sunday, however, Rashed said he was confident about luring back millions of foreign visitors to Egypt. “The first quarter is down about 40 per cent compared to last year. However, there is a positive with every negative. The Gulf business is up about 45 per cent from last year,” Rashed said.

He said he is embarking on a plan to attract 12 million tourists to Egypt by the end of 2017, adding that the new plan will include increasing the presence of national carrier EgyptAir abroad and working with low-cost airlines.

Focussing on the airlines is the cornerstone of the plan, Samy Mahmoud, head of the General Authority for Tourism Promotion (GATP), told Al-Ahram Weekly. He said that without the airlines there could be no tourism so GATP is investing a lot of effort to support both regular and charter flights.

“We are planning to offer incentives to charter flights to encourage more such trips to Egypt. There is a plan to finance joint advertising campaigns in which we are paying a percentage of the cost.”

Last month, an Egyptian private airline revealed plans to purchase up to 10 Russian-made jets in a deal with the Russian Sukhoi Company. The deal would include the creation of a tour agency to restore the flights between the two countries that were stopped after the plane crash in October. The following month, Moscow suspended all flights to Egypt pending an investigation into the plane crash.

An anonymous source close to the deal told Reuters in February that the agency could be a vehicle for resuming tourist links, as it would provide the Russians with more flexibility than they might have working through state-owned EgyptAir.

However, Roman Skory, deputy head of Russia’s Federal Agency for Tourism, told the TASS News Agency last week that Russian tourists will not be back in Egypt this year, citing a lack of safety.

“By way of example, Britain and a number of European countries are not rushing to resume flights to Egypt either. Safety is the key issue, the number one problem,” he said.

The government hired the UK-based Control Risks Group, a consultancy firm, last month to evaluate security at three international airports, in Cairo, Sharm El-Sheikh and Marsa Allam. The first phase of the evaluation will take six months and cost an estimated $700,000.

“Improving the perception of Egypt in the foreign market is another pillar of the plan as the recent incidents have tarnished Egypt’s image in the minds of foreigners as it is now linked to terrorism and human rights abuses,” one commentator said.

The job of improving Egypt’s image is being undertaken by the New York-based J Walter Thomas (JWT), a multinational company that won a $68 million contract last September to promote Egypt worldwide.

Mahmoud explained that the three-year contract with JWT covers public relations, including communications with media representatives, buying advertising space on billboards and social media, and holding cultural and artistic events.

In the first six months of the contract, Mahmoud believes the company’s performance has been negatively affected by the recent incidents, however.

“It spent months preparing for an event like that of the Greek composer Yanni at the Pyramids. The event attracted a lot of attention, but all this was in vain when on the following day the Russian plane crash happened,” he said.

JWT is currently promoting Egypt  in 11 markets, with its activities in the UK, Italy and Russia halted due to the recent events.

The ministry’s plan includes supporting the hospitality sector and upgrading the quality of services. More than 50 hotels in Sharm El-Sheikh have closed because of the drop in tourism, in addition to tens of others in Taba, Nuweiba and Marsa Allam, according to the South Sinai Investors Association, an industry group. South Sinai is home to 80 per cent of Egypt’s beach tourism destinations.

“The prime minister’s decision to postpone repayment of the tourism companies’ dues to the banks for six months to one year is aimed at making things easier for them,” said Adla Ragab, economic advisor to the minister of tourism.

Ragab noted that the postponement of the decision on the property tax on hotels also gives them space before imposing new taxes on them.

The GATP is currently targeting new markets other than the Russian and European ones. “We are focussing on opportunities in China, Japan and India, and we are also targeting the Gulf counties,” it said.

Visitors from the Gulf have the highest spending rate, with a Gulf visitor spending on average $150 per night while the average tourist does not spend more than $70.

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