24 January 2016

Egypt's tourism sector is losing USD 255 million a month as foreigners shy away.

Egypt is counting on Arab and domestic tourism to help jump-start a vital economic sector that has been floundering since the fatal crash of a Russian passenger jet last year and a string of militant attacks.

The Egyptian Tourism Authority (ETA) said the sector has been losing around USD 255 million a month since the plane crash in October which killed 224 people, most of them tourists vacationing in the Red Sea resort of Sharm al-Sheikh.

Several countries suspended some flights to Egypt after the crash, which militant group Islamic State claimed responsibility for. Egypt has said it found no evidence of terrorism or illegal action, but Western governments said the jet was likely brought down by a bomb and voiced concern over security at Egyptian airports.

ETA head Sami Mahmoud told Zawya that tourism receipts fell 10 percent to USD 6.5 billion in 2015 compared with the previous year. "This is due to the dwindling tourism activity coming from Russia and the United Kingdom, the two biggest markets for Egypt," he said.

Mahmoud voiced hope that new security measures would reassure tourists in time for the normally busy summer season and result in a 15 percent rebound in the industry by the second half of the year.

To address security concerns, Egypt has hired consultancy Control Risks to review airport security and is installing new detection equipment and boosting security at popular resorts like Sharm al-Sheikh and Hurghada, where suspected militants armed with knives wounded two Australian tourists and a Swede earlier this month, according to Reuters.

REVIVING TOURISM

Vacation resorts account for 80 percent of tourism activity in Egypt, with cultural tourism coming in second with 20 percent while conferences, trade fairs and desert safaris account for only 5 percent, according to the ETA.

In a bid to compensate for the declining number of foreign tourists, the ETA and the tourism ministry are encouraging domestic tourism through the "Egypt in our Hearts" initiative and the ministry is studying setting up a budget charter airline with Egypt Air to serve the domestic market.

The initiative, which promotes cruises to the historic sites of Luxor and Aswan, has attracted 9,000 local tourists since it was launched last October, according to Mahmoud.

ETA also launched a campaign "This is Egypt" in December to target Arab markets, which account for 20 percent of Egypt's tourism traffic, particularly wealthy Gulf nations such as Saudi Arabia, Kuwait and the United Arab Emirates.

Tourism remains a crucial component of Egypt's economy. At its peak, it contributed around 11.3 percent of gross domestic product and provided employment to 12.6 percent of the labor force before the 2011 uprising, which ushered in years of political unrest.

Following the election of former army chief Abdel Fattah al-Sisi as president in 2014, authorities had high hopes for the tourism sector as political stability returned to the country.

The tourism minister said last year that Egypt hoped to generate USD 20 billion in revenue by 2020 by attracting 20 million visitors. But only 9.5 million tourists came to the country last year, compared with more than 14.7 million in 2010.

© Zawya 2016