Eliot Benman
Last updated: 3 April, 2012

Sunnier Forecasts for Egyptian Tourism

Recently published government figures suggest a brighter outlook for Egypt’s suffering tourism industry. A report by the state statistics agency reveals a steady increase in arrivals and better than anticipated performance in 2011.

The Egyptian Revolution left the Egyptian tourism industry reeling. In January of 2012, tourist arrivals had increased 9% year-on-year, but as street protests in major urban areas began to galvanize, tourists headed for the airports.

Government statistics showed that 1 million tourists left the country during the 18 day revolution, leaving hotels and tourist destinations empty. According to a report by Business Monitor International, tourist arrivals dropped by 70% during the first half of 2011. 

Tourism is a vital sector in the Egyptian economy, accounting for around 12% of Egypt’s GDP and employing around 3 million people. The drop in tourism has also affected related industries, such as telecom and IT, card payment and transportation.

In 2012, the industry’s outlook has improved, showing an uptake in numbers in the second half of 2012. The sector has been bolstered by improving security and the prospect of increased stability following presidential elections set for May.

“The future of tourism in Egypt will be great,” Samy Mahmoud, undersecretary of Egypt’s Ministry of Tourism and head of the International Tourism Sector, told Reuters in an interview in Dubai in February. “By the end of 2012, we expect between 12 and 13 million tourists. The contribution to the economy will be around $11 billion.”

With total revenues falling to $8.8 billion from $12.5 billion in 2010, the tourism sector’s performance in 2011 was better than anticipated. According to a report published April 1 by the state-run Central Agency for Public Mobilization and Statistics (CAPMAS), tourist numbers fell to 10 million last year from 14.7 million in 2010.

The report showed that Europeans made up 4.5 million of the 2011 total, falling from 7.1 million the previous year. The majority came from Britain, Germany and Italy.

A less dramatic decline was seen in Arab tourism, with arrivals decreasing to 1.8 million from 2.1 million in 2010. The report shows a sharp decline in tourism from Saudi Arabia.

The number of Arab arrivals was bolstered by people fleeing from conflict in other revolution-hit countries such as Libya and Syria. It is estimated that over 500,000 Libyans crossed into Egypt during the conflict that toppled former Libyan leader Muammar Al-Gadhafi. Libyans made up 29% of Arab arrivals, according to the report.

The industry has been severely affected by political turmoil in the past, including the Luxor massacre of 1997 and bombings in the Sinai in 2004 and 2005. Tourism always quickly recovered, but the impact of the revolution has proven to be much more tenacious. The spontaneous nature of political turbulence and violence continues to scare off tourists, says Hani Abdul Aziz, Tourism Manager and Vice Chairman of Sunrise Tours Egypt.

“No one can ensure their safety,” he explains. “Every week something unexpected happens.”

“Tourists are still not coming to Cairo and Alexandria,” says Ayman El Shafei, General Manager of Egyptian Travel Agency Wedjat Tours. “They are afraid of Tahrir Square, but in the last months security has improved.”

The remarkable diversity of Egypt’s tourism sector has proven a key factor in its rebound. Politically turbulent urban areas are avoided, but Egypt also offers numerous sea side resorts and various desert and oasis destinations.

“The Red Sea has been a favored destination. Tourists arrive to Sharm El-Sheikh directly by plane, spend a few days and then go directly back home. Then after that is Luxor and Aswan,” says El Shafei, referring to two destinations in the Upper Nile region known for their ancient ruins.

Traffic at Sharm El-Sheikh’s international airport increased by 55 per cent in the first two months of 2012 compared to the same period last year, Hassan Rashed, head of the Egyptian Holding Company for Airports and Air Navigation (EHCAAN), told Egyptian newspaper Al-Ahram. Traffic at Hurghada airport has increased at an even higher rate, Rashed said.

Tourism agencies cope with the gradual return to normalcy by pursuing new strategies. 

“We go and participate in travel fairs,” says El Shafei. “The most important thing is we do video testimonials showing tourists who explain that Egypt is still safe, showing people enjoying Egypt.”

Like many travel agencies, Sunrise Tours has been focusing on outbound tourism. Outbound tourism helped many travel agencies to survive. The Hajj season (the annual Islamic pilgrimage to Mecca) saw high demand, while wealthy Egyptians looking to escape the unrest and political tension also helped bolster the sector. The number of foreign trips fell by just 13% in 2011.

“2011 was a good year, considering the situation,” says Abdul Aziz. “We did a lot of religious trips. There were hardly any incoming trips, only 10% was from the outside, mostly it was outgoing.”

The Egyptian Tourist Authority has taken numerous steps to revive tourism, such as frequent participation in international tourism fairs to rebuild Egypt’s image in foreign markets.

In November of last year, the Ministry of Tourism announced that Nile cruises between Cairo and Aswan in the south would be resumed after a 16-year suspension due to security and environmental concerns. The Ministry announced the cruises are set to resume in May and that funds are being invested to improve cultural attractions and ports along the way.

Many in the tourism industry believe the presidential elections slated for May will be a turning point.

“Next summer we expect everything to go back to normal,” says Abdul Aziz. “Stability will return and we will have a new president.”

A return to political stability, however, may not put an end to the industry’s woes. Islamist parties dominate parliament and several Islamists candidates are running in the presidential elections. Concerns have been raised that they may try to force the industry to conform to traditional Islamic regulations.

The Muslim Brotherhood’s Freedom and Justice Party (FJP) has made numerous statements reassuring those working in the tourism industry that the current parliament will not place harmful restrictions on tourism and will work to develop the sector. Comments by Salafi politicians have not been as reassuring.

“The Pharaonic culture is a rotten culture,” said Abdel Munim Al Shahat, a spokesman for the Salafi group Dawa, to the London-based daily Alsharq Al-Awsat, adding that the faces of ancient statues “should be covered with wax, since they are religiously forbidden.”

Surprisingly, Islamists fared well in electoral districts where the tourism trade is concentrated. Along the Red Sea, and in Luxor and Aswan, the FJP took the lead, with the Salafi Al-Nour party coming in second in Luxor and Aswan and liberal parties claiming second place in the Red Sea region.