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Egypt tourism still struggling despite upswing: Industry insiders

Despite rising tourist numbers in this year's first quarter, industry insiders say talk of full-fledged recovery is still premature

Bassem Abo Alabass and Deya Abaza, Sunday 12 May 2013
Sharm el-Sheikh
People ride on a banana boat at the Red Sea resort of Sharm el-Sheikh in the South Sinai governorate, about 550 km (342 miles) south of Cairo (Photo: Reuters)
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Local tourism industry insiders are not impressed with the recent pick-up in touristic activity recently trumpeted by Egyptian Tourism Minister Hisham Zaazou.

Last week, Zaazou announced that the number of tourists visiting Egypt had reached some 2.86 million in the first quarter of 2013 – 14.4 percent more than in the corresponding period last year.

Since the January uprising that toppled former president Hosni Mubarak in early 2011, Egypt has suffered unprecedented political instability, prompting several foreign governments to advise their nationals to exercise caution when travelling to Egypt.

While Zaazou asserted that the recent upswing could signify a return to the sector's pre-revolution 2010 peak – when some 14.7 million tourists visited Egypt generating $12.5 billion in revenue – industry sources express reservations regarding the seeming improvement.

'Not a full-fledged recovery'

"Egypt is seeing larger numbers of domestic and foreign tourists, but this cannot be considered a full-fledged recovery until it translates into higher revenues," Elhamy El-Zayat, head of Egypt's Federation of Tourism Chambers (EFTC), told Ahram Online.

"Prices are significantly lower than they were in 2010, so the number of tourists isn't a correct gauge of the sector's current performance compared to 2010," he added.

In the wake of 2011 revolution, many Egyptian tourism agencies and hotels dramatically cut prices to maintain occupancy levels. While each tourist spent an average of $85 a day in 2010, this number dropped to $70 in 2012, according to El-Zayat.

"What current tourist numbers show is that Egyptian beaches are the only active tourist destinations," the EFTC head said. "Cultural tourism, however, is dead."

Hotel occupancy in Egypt's Red Sea governorate reached roughly 70 percent in the first quarter of 2013, "which is higher than the percentage recorded during the same quarter in the two previous years," Hatem Mounir, secretary-general of the Red Sea tourism chamber, told Ahram Online.

Thanks to the recently-concluded Easter holidays, hotels in the area enjoyed occupancy levels of 85 and 88 percent in April and May respectively, explained Mounir.

Domestic tourism in particular has helped bolster hotel occupancy rates, especially as prices have been reduced to lure vacationers. After Egyptians, Russian and German nationals have recently represented the most common visitors to the Red Sea coast, according to Mounir.

"Some five-star hotels were completely booked earlier this month due to their very attractive offers," he explained.

Tourism to more 'cultural' destinations in Upper Egypt, however, has failed to pick up in the same manner.

Luxor, for example, the Upper Egyptian governorate famous for its ancient Egyptian heritage sights, has seen average hotel occupancy rates of only 20 percent, according to El-Zayat. Tourism activity in Aswan to the south, he added, was even weaker.

Only 30 out of approximately 280 floating hotels operating between Luxor and Aswan were currently active, El-Zayat elaborated.

Political turmoil takes toll on tourism

Along with Luxor and Aswan, Cairo's hotels have been badly hit, especially given that Egypt's capital has become a venue for frequent political protests and clashes.

"Occupancy had been picking up in October and November of last year, reaching as much as 75 percent," said Karim Ahmed, a reservations manager at Novotel in Cairo's upscale Zamalek district. "But after the constitutional declaration in November and the subsequent commotion, occupancy plunged to between 28 and 40 percent in December."

Egypt was rocked by massive demonstrations and frequent political clashes late last year, as a constitutional battle between the ruling Islamists and the opposition spilled onto the streets.

Tensions flared up again in late January, when a court sentenced 21 Port Said residents to death for the murder of rival football fans one year earlier, igniting widespread unrest in Cairo and the cities along the Suez Canal.

"Occupancy rates picked up again in March and April, reaching 60 percent, but have since dipped again because of the academic exams season," Ahmed explained.

"This latest upswing, however, is due mainly to conferences and corporate events," he added. "Vacationers stopped coming after November and have yet to come back."

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