ECONOMY-EGYPT: Tourism Drops in the Wake of Terror Attacks

By Cam McGrath Reprint | | Print |

Cam McGrath

CAIRO, Nov 5 2001 (IPS) - Egyptian government officials have said Tourism has dropped by 40-45 percent in the wake of the Sep 11 terror attacks on New York and Washington, and warned that the worst was yet to come.

“The fall in tourist activity in Egypt in October was between 40 to 45 percent,” Minister of Tourism Mamdouh el-Beltagui said last week. “There will be a steeper fall in the number of bookings in the months to come.”

Tourism is Egypt’s biggest foreign currency earner, generating 4.3 billion U.S. dollars in 2000. The Ministry of Tourism said 5.4 million tourists visited Egypt in 2000 and the industry was directly or indirectly responsible for 2.2 million jobs.

Travel agents reported a rush of cancellations following the Sep 11 attacks, both by tourists planning visits to Egypt and Egyptians whose visa applications for western countries were declined. They said the biggest problem facing the tourism industry was the sharp decline in new bookings.

At many travel agencies and airline offices the phones and faxes lie dormant.

Abdou Azeem, general manager of the country’s largest travel agency Misr Travel, said that more than 50 percent of all individual bookings to Egypt through his agency were cancelled.

“New bookings are down to almost nothing,” he said, adding that prospects for improvement were slim given the current international situation.

Tourism officials say occupancy rates throughout Egypt are averaging 52 percent approaching the peak winter season, compared with the usual 78 percent at this time of year. Some areas have been harder hit that others.

In Sinai, where a 13-month-long Intifada — uprising — in the Palestinian Territories had already scared away most tourists, entire tourist villages were forced to shut down and lay off employees due to lack of tourists.

Major hotel chains like Sheraton, Marriott and Club Mediterranean reported occupancy rates down by up to 70 percent, with branches in Sinai and Southern Egypt either shutting down or scaling back operations.

The effect on smaller hotels has been more variable, as the presence of a single tour group often makes the difference between being empty or full.

Wafik Doss, owner of the three-star Windsor Hotel in Cairo, said his hotel’s occupancy rate was 60 percent in October, only 25 percent lower than usual, but the forecast for November was discouraging.

“What is most dangerous is the low rate of new reservations. Many people had planned their trip (before Sep 11] and still came, but the lack of new reservations is affecting us really badly,” he said.

Doss added that tourists who cancelled visits to Egypt would likely wait for the cessation of U.S.-led military strikes on Afghanistan before re-booking them. Other tourists have chosen alternative destinations for their annual vacations and will skip Egypt altogether.

If the conflict does not end soon, businesses that rely on tourist revenues say they will be forced to close.

A souvenir shop manager near the Egyptian Museum watches his television every day, praying for news that the war in Afghanistan has ended.

“Usually we get about 10 tourists a day and at least one of them spends big,” said Mohammed el-Sayed, 30, manager of Meridien House souvenir shop. “Now there are none.”

Sayed said it had been eight days since a tourist visited his shop. “He bought a postcard and left,” he said.

In Khan el-Khalili, Cairo’s main tourist bazaar, the devastation is obvious. Where two months ago tourists jostled in the maze of shops in search of deals on souvenirs and traditional handicrafts, today the alleys are empty of tourists and many shops have closed. The remaining hawkers spend their days sipping tea, waiting for tourists to return.

“It’s better to go home or find work elsewhere than sit around hoping for customers,” said coppersmith Hamdy Ismail, 46, a father of three.

He admitted that having worked as a craftsman his entire life, his job prospects were dim. “I tried to find a job in construction or sales, but Egypt is at the bottom of a three-year recession and there is no work.”

Bankers said the Sep 11 attacks hit all Egyptians hard and account holders had stopped making deposits and were increasing their withdrawals to make up for income shortfalls.

At foreign exchange offices, which attract both tourists buying local currency to purchase local goods and merchants seeking hard currency to pay for import shipments, business has all but dried up.

“Two months ago there were many people here and the place was always full. Now it is empty,” said Sallah Kasseb, manager of Horus Exchange. “Our business is down by 50 percent, both in terms of foreigners and Egyptians.”

The economic effects of the tourism slump have trickled into other sectors. A salesperson at state department store Omar Effendi said the number of people browsing remained the same, but the volume of sales had fallen by at least 30 percent in the last month.

A florist in Giza claimed weddings were postponed because young men had lost their jobs and were unable to afford an apartment for their future bride.

A butcher in the northern resort town of Alexandria keeps the lights off in his shop to cut operating expenses.

“People trying to save money stopped buying meat and farmers have no place to sell their livestock,” said Iman Girgis, the butcher. He said cash-strapped farmers raised the price of livestock to compensate for lost sales, but the move backfired and left everyone for the worse.

“It’s one vicious circle and we’re all in it together,” he sighed.