Hit hard -- but looking to rebound
While there's no denying the US invasion of Iraq's drastic impact on Egyptian tourism, Rehab Saad finds industry insiders confident of a recovery by year's end
There is no question about it. Egyptian tourism is currently deep in crisis mode, the Anglo- American invasion of Iraq the primary cause of its malaise. According to Minister of Tourism Mamdouh El-Beltagui, last month saw a 22.3 per cent drop in the number of tourists who came to Egypt compared to March 2002. Travel agencies, meanwhile, have been reporting massive cancellations from various markets around the world, and hotels have seen occupancy rates dip by almost 50 per cent, with no increase of future bookings in sight.
A detailed report by a Tourism Ministry- affiliated crisis management centre highlights the specific effects that the war on Iraq has had on the industry's various sectors. The British market, according to the report, saw nearly 15 per cent more cancellations between March and May 2003, compared with the same period last year. Making matters worse, EgyptAir has decided to halt its direct London-Sharm El-Sheikh route until further notice.
EgyptAir has also reduced the number of New York-Cairo flights it operates from four to three a week, reflecting the drop in arrivals from the United States. According to the report, New York travel agencies have cancelled their Egypt bookings for April en masse, and a number of Chicago bookings have also been postponed.
Although the French market has experienced fewer cancellations, indications are that summertime bookings will be down, while Paris- Cairo air travel saw a 30 per cent cancellation rate for March. Other European markets have also been affected. Dutch airline KLM has reduced its number of trips to Egypt from seven to five a week. Bookings from Belgium for March- September are expected to experience a devastating 40-60 per cent drop compared to the same period last year.
The Italian market, traditionally one of Egypt's top ten, has also been affected, with 1460 trip cancellations reported for the period between March and May. Twenty-two charter flights scheduled for March and April have also been cancelled. The German market, one of Egypt's top three, witnessed a 20-25 per cent drop in tourist reservations over the last couple of months, while a 12-35 per cent drop in regular and charter flight reservations has also been reported.
According to the report, the Japanese market might see a drop of 10-80 per cent compared to last year. Here again, EgyptAir has reduced the number of trips -- this time from five to three a week after bookings fell some 10-65 per cent compared to last year.
Despite the above mentioned facts, travel agents and hoteliers anticipate a recovery by the second half of the year. According to Mounir Wissa of Escapade Travel, things should be back to normal by October, "if everything goes well". Wissa expects Spanish and Italian tourists heading for Egypt's Red Sea and Sinai resorts in August to play a large part in the recovery.
Many travel agents and hoteliers are also depending on the Arab market to save the day. Wissa thinks that "other than Egypt or Lebanon, Arabs won't have much of a travel choice this summer". The influx is expected to begin in June.
Maha Saad, director of public relations for Starwood Hotels, Middle East, agrees. "After 11 September and the war on Iraq, Arabs feel more comfortable travelling within their region. The lengthy process involved in getting a visa to travel abroad, as well as the tightened security measures at airports, makes them want to spend their holidays within the Middle East." Saad sees the 6-9 May Arabian Travel Market in Dubai as a great opportunity for hotel chains and travel agencies around the region to re-establish their share of the Arab travel market.
Other industry insiders are focussing on the East European, and especially the Russian market, as a way out of the crisis. According to tourism officials, arrival numbers from Russia and other countries from the former Soviet Union have traditionally shown more stability during times like these. In fact, according to El- Beltagui, the Russian market was Egypt's second highest in March, with an astounding 14 per cent increase in visitor numbers compared to last year.
Tour experts are also looking to business travel as a potential boom market once the war is over. According to Sayed Moussa, "the talk of re- building Iraq and the international companies involved in that mission will certainly mean those companies will be forging a strong Middle East presence in the coming period." Moussa thinks Egypt will end up benefiting from that presence.
Although Moussa also sees October as a tipping point for the sector's recovery, he says a lot depends on "Egypt's marketing efforts and how international airlines are doing." Moussa said several airlines went bankrupt after 9/11 and the war on Afghanistan, and even more will go under after the war on Iraq. "We have to keep in mind that 80 per cent of the tourist movement to Egypt arrives by air."
The Tourism Ministry, meanwhile, has set up a comprehensive crisis management plan in an attempt to contain the crisis. Promotional campaigns have been tailored for each market; with those directed at the Arab market set to start before summer. Japanese campaigns will begin in June, Russian efforts in July, and Scandinavian, Spanish and Portuguese campaigns are set to start in September.
The ministry's charter flight incentive programme, which is to be extended to mid-October, will also figure high in these promotional campaign. The programme was launched in mid-November 2001 to rejuvenate tourism in the aftermath of 11 September, and involves the Egyptian government paying 30 per cent of the cost of charter seats when at least 50 per cent of the seats on a plane are booked.
Familiarisation trips have also been organised for representatives of foreign newspapers and magazines, with the aim of allowing these journalists to experience the peace and stability Egypt enjoys for themselves, as well as keep abreast on the latest developments in the sector.
Although Wissa thinks major steps should definitely be taken to encourage people around the world to visit Egypt, he is "against the policy of drastically cutting our rates to make up for our losses". Instead, Wissa suggests more moderate cuts. "If I am selling a room for $100, I could make it $80, for example. This would encourage people to come."
Starwood's Saad agrees. Once the crisis is over, she said, "we have to head back to the market with special offers, packages and weekend breaks to attract clients. However," said Saad, "these offers should not be available forever."
Al-Ahram Weekly Online : 17 - 23 April 2003 (Issue No. 634)
Located at: http://weekly.ahram.org.eg/2003/634/eg5.htm