The ongoing violence in the Egypt's Sinai and in Gaza has taken its toll on tourist activity in the peninsula, tourism professionals tell Ahram Online.

While most of the violent incidents have taken place in northern Sinai, at least 200 km away from the main tourist hubs in the south, workers in resort towns such Sharm El-Sheikh, Dahab and Taba are struggling to make ends meet.

Following the Israeli attacks on Gaza, the governorate of South Sinai on Sunday announced a state of alert, whereby hospitals and security apparatus were put on stand-by in preparation for possible attacks on tourists. Such a decision comes ahead of the Christmas season in which occupancy rates are expected to be 80 per cent.

Official government figures show that occupancy rates in South Sinai hotels are around 65 per cent, according to Salem Saleh, head of the governorate's Tourism Promotion Authority. "Such rates are not bad," he said.

But occupancy rates are not an accurate indicator of the state of tourist activity in Sinai.

"Occupancy rates do not matter by themselves. The problem is that revenues are going down because of the discounts hotels offer to attract tourists," Ahmed Balbaa, head of the tourism division at Egyptian Businessmen's Association, told Ahram Online.

"Revenues have dropped by over a third in most hotels due to discounts," Balbaa explained. "And the types of tourists such discounts attract are not the high spenders."

Following the killing of 16 Egypt border guards in August in the northern Sinai town of Rafah, the Egyptian army launched a campaign against militants in the peninsula. Since then, violent incidents have reoccurred with police stations and convoys being attacked at least once per week.

"Now 'Sinai' is associated with terrorist groups, military operations and a lack of security in international media," Balbaa added. "This is extremely harmful to our business and the Egyptian economy."

Tourism accounts for some 11 per cent of the Egyptian economy, with beach tourism attracting the largest portion of visitors. Southern Sinai, along with the Red Sea town of Hurghada, have become popular destinations for Europeans seeking warm weather, immaculate beaches and spectacular snorkeling and diving sites.

"Most of the violence takes place in the northern part of Sinai, but when the media just says 'Sinai' this wrongfully implies that a town like Sharm El-Sheikh is unsafe," Balbaa adds. "And this is not the case."

For Nagy Arban, vice chairman of the hotels division at Cairo's Chamber of Commerce, violence in Sinai is closely connected with the general lack of political stability in Egypt.

"British trip organisers often ask me about the constitution and the return of security to Egyptian streets," Arban said. "Cheap prices will not attract tourists if instability persists."

Violence, however, is not the only problem tourism in Sinai is facing. Fuel shortages are also taking their toll.

"We get the diesel we use to power water heaters from the black market at LE3 pounds a litre which is more than three times its normal price," Adel Abdel-Razek, a member of the Tourism Federation, told Ahram Online. "Even buses have to endure long queues to get fuel from petrol stations."

Egypt's tourism saw a major drop in 2011 following unrest resulting from the uprising that unseated Hosni Mubarak. The sector began to recover in 2012 with around 8.1 million tourists visiting Egypt over the past ten months, injecting some $10 billion into the economy.