TOURISM-EGYPT: Ailing Tourist Industry Showing Signs of Recovery

By Cam McGrath Reprint | | Print |

Cam McGrath

CAIRO, May 23 2002 (IPS) - The Egyptian tourism sector has taken a heavy beating during the past eight months, but industry insiders believe the worst may be over.

Prior to the September 11 terrorist attacks on the United States, tourism was Egypt’s biggest foreign currency earner, with 5.4 million tourists generating 4.3 billion United States dollars in 2000. Initial fears that the attacks would decimate Egypt’s tourism industry for years to come proved incorrect, but the sector did suffer substantial 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 of Tourism Mamdouh el-Beltagui told a recent parliamentary committee meeting.

“The drop was just 23.6 per cent in December, 11.8 per cent in February and stands now at 10 per cent,” state newspapers quoted him as saying. “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, shares the minister’s positive outlook.

“There are positive signs of recovery in the tourism industry. We can safely say that (hotel) occupancy levels are at 85 per cent of normal and price levels are a little lower, at 70 per cent, but improving,” he told Inter Press Service.

Price cuts, the declining value of the local currency against the United States dollar and reduced tourist traffic, have all contributed to decreased revenues in the country’s tourism sector. There is temptation to increase prices to make up for this shortfall, but Khadem argues that hotels and other tourism services should wait until the tourist numbers return to normal before taking any action.

“We can’t aspire to bring rates to 100 per cent until we build up the numbers first. That will enable hoteliers and others in the sector to increase their rates,” he said.

Occupancy rates are deceptive, insist hotel managers, as the past months have seen not only lower room rates, but also a different kind of traveller. “We usually depend on the Italians and Germans,” said Waleed Mazen, Assistant Manager of Cairo’s Helnan Shepheard Hotel. “But now we are taking Russians and Yugoslavians.”

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. Many can barely afford the air ticket and discount hotel rates, let alone any pricey souvenirs or tours. Tourist shops and services that rely on traffic from hotels have been forced to close due to lack of business. Hotel lobbies, once a hub of activity, are eerily quiet.

“We’re not losing, but we’re making the minimum we can survive on,” Mazen said. “Things are getting better. Everything takes time.” Full recovery may not be far off. June marks the traditional start of the Arab tourism season and local tour operators and hoteliers are banking on a good one.

Every summer, tens of thousands of Gulf Arab tourists visit Egypt to escape the heat in the Arabian Peninsula. Sept. 11 events and the ongoing Palestinian Intifada are unlikely to alter their plans.

Gulf Arab tourists, who usually travel as a family, are known for lavish spending during their stay of up to three months in Egypt. Although illegal, many Egyptians charge Gulf Arabs inflated prices for services, often making enough during the summer season to balance the books for months to come.

The key to this year’s summer season will be to change the travel habits of Arab visitors in a way that increases their participation in the country’s organised tourism. “Arabs prefer to come by themselves and not by organised programmes. They usually rent furnished flats and see the sights on their own” noted Abdou Azeem, General Manager of the Egypt’s largest travel agency, Misr Travel. “However, traffic from Arab countries is slowly changing. They are starting to take organised tours.”

Misr Travel, and other tour companies, are actively promoting their services in Gulf Arab countries. If the response is positive this summer, the increased foreign currency influx could go a long way towards making up for the losses of the past eight months. “If we can make it through May, we’ll survive, God willing,” said souvenir seller Moustafa el-Gamil.