ECONOMY-EGYPT: Tourism Getting Back on Track

By Cam McGrath Reprint | | Print |

Cam McGrath

CAIRO, May 23 2002 (IPS) - The worst may be over for tourism in Egypt after a bad eight months.

Tourism was Egypt’s biggest foreign currency earner before the September 11 attacks. In 2000 about 5.4 million tourists spent 4.3 billion dollars. After September the industry took heavy losses as tourists steered clear of the Middle East.

Tourism dropped 18.2 per cent in late September, 41.8 per cent in October and 54.5 per cent in November before showing signs of recovery, Minister for Tourism Mamdouh el-Beltagui told a recent parliamentary committee meeting.

Business began to turn the corner from the end of the year. “The drop was just 23.6 per cent in December, 11.8 per cent in February and stands now at 10 per cent,” he told the committee. “This means that we are moving back on track, unless other shocks come out of the blue.”

Ahmed el-Khadem, general manager of the Egyptian Federation of Tourism Chambers, says occupancy levels in hotels are currently around 85 per cent, and price levels a little lower at 70 per cent, but improving.

Price cuts, the declining value of the local currency against the dollar, and reduced tourist traffic have all led to decreased revenues. There is a temptation now to increase prices to make up for this shortfall, but Khadem argues that hotels and other tourism services should wait until tourist numbers return to normal. “We cannot aspire to bring rates to 100 per cent until we build up the numbers first,” he told IPS.

At 85 per cent, occupancy rates are impressive but deceptive, hotel managers say. Egypt is getting the numbers back, but not enough Western tourists.

“We usually depend on the Italians and Germans,” says Waleed Mazen, assistant manager at the Helnan Shepherd Hotel in Cairo. “But now we are taking Russians and Yugoslavs.”

With big-spending North American and Western European travellers shying away, budget-oriented Russian, Eastern European and Chinese visitors are filling some of the gap. Lower spending has meant that several tourist shops and services have closed down. Hotel lobbies that were once a hub of activity are eerily quiet.

“We’re not losing, we’re making the minimum to survive on,” Mazen says. “But things are getting better. Everything takes time.”

June marks the traditional start of the Arab tourism season, and local tour operators and hoteliers are banking on a good one. Full recovery may not be far off. And it may not have to wait for Western tourists.

Every summer, tens of thousands of Gulf Arabs visit Egypt to escape the heat of the Arabian Peninsula. The September 11 fallout and the Palestinian Intifada are unlikely to alter their plans.

Gulf Arabs, who usually travel with families, are known for lavish spending during their stay of up to three months in Egypt. Many Egyptians charge Gulf Arabs inflated prices for services, often making enough during the summer season to balance the books for months to come.

This year tour operators want to attract Arab visitors into organised tourism. “Arabs usually prefer to come by themselves and not by organised programmes,” says Abdou Azeem, general manager of Misr Travel, Egypt’s largest travel agency. “They rent furnished flats and see the sights on their own.” But traffic from Arab countries is changing slowly and “they are starting to take organised tours.”

Misr Travel and other tour companies are actively promoting their services in the Gulf. That business could go a long way towards making up for the losses of the past eight months.