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Egypt tourism shows little recovery in 2012
Despite a growth in tourist arrivals up to November 2012, the performance of the industry remains disappointing
Dalia Farouk, Ahram Online, Thursday 27 Dec 2012
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Egypt tourism
A bikini-clad tourist reads a book at the beach of the Red Sea resort town of Sharm el-Sheikh (Photo: AFP)

Around 10.5 million tourists visited Egypt in the first 11 months of 2012, a 17 per cent increase on the same period last year, Tourism Minister Hisham Zaazou said Wednesday evening.

During a meeting with the Tourism Chamber of Commerce, Zaazou told industry professionals and reporters that tourism generated some $9.4 billion in 2012, a slight increase over the $9 billion seen in 2011.

Despite the increase, such figures are still well below the $12.5 billion the sector generated in 2010, the most successful year in its history.

Minister Zaazou blamed political unrest and violent clashes that followed President Mohamed Morsi’s constitutional declaration of 22 November for the unimpressive performance of the industry.

“Occupancy rates have dropped by about 25 per cent due to the current state of affairs in Egypt,” Zaazou explained.

The month of December usually marks the beginning of the peak tourism season in Egypt. But early indicators are disappointing. The Associated Press reports that arrivals this month are down 40 per cent from November while industry officials complain of slow business.

“We are in the middle of the season and some hotels in certain areas are nearly empty,” Elhamy El-Zayat, head of the Egyptian Tourism Federation, said.

El-Zayat explained that many establishments have cut their prices significantly to lure in tourists and that this is taking its toll on revenues. “In some places you can get a room for the night plus three meals for just $15. No wonder that many companies are just unable to pay their employees,” he said.

The tourism sector was dealt painful blows following the 2011 popular uprising that unseated former president Hosni Mubarak. The ensuing security vaccum drove tourists away and left the foreign currency earning industry at a near halt.

The sector was projected to stage a strong comeback in 2012 following the coming to power of an elected president in summer and the political stability this was supposed to ensure.

“We had expected a rebound to normalcy by the end of this year, but we are still stuck at 2011 levels,” Mohamed Essam, an operator at Tiran Tours in Cairo, told Ahram Online.

Tourism accounted for 10 per cent of Egypt's economic activity during the final years of the Mubarak era. The industry employs some four million people, more than 10 per cent of Egypt’s total workforce.

The drop in tourist activity coincides with rough economic conditions Egypt is increasingly facing. Last Monday, Standard and Poor’s (S&P) downgraded Egypt’s credit rating to junk level, casting strong doubts on the ability of the state to meet its obligations. On Tuesday, it downgraded three major Egyptian banks, citing their heavy exposure to government debt.

These troubles reflect a lack of trust in the Egyptian economy, especially after a $4.8 billion loan deal was indefinitely postponed due to the political unrest in the country over the new constitution. 

In the past few weeks, the Egyptian pound lost 1.5 per cent of its value to the dollar, reaching the level of LE6.19 to the dollar. A black market has been reported to have reappeared.

"Tourism is one of the main nerves of the Egyptian economy; it saves the country from possible crises. We just need stability," Zaazou added.





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