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Russian plane crash could hamper tourism recovery in Egypt: Tourism chamber head

Tourism industry chiefs say there has already been an impact on bookings

Dalia Farouq , Waad Ahmed , Friday 6 Nov 2015
Sharm
Tourists ride camels in Egypt's Red Sea resort of Sharm El-Sheikh on November 4, 2015, four days after the Russian plane crash over Sinai (AFP)
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Egypt’s tourism ministry has labeled the UK’s decision to cancel flights to Sharm El-Sheikh a prejudgment, coming ahead of the official investigation results.

But the ambiguity surrounding the crash of the Russian jet in Sinai on Saturday could prove to be one more obstacle in the way of the recovery of Egypt's ailing tourism sector.

The United Kingdom, a country that sends a high number of tourists to Egypt every year, has suspended all flights by UK-based airlines over Sinai after fears that an explosive device was the likely cause of last weekend's crash. Accordingly up to 20,000 British tourists are awaiting flights home following the UK’s “precautionary” decision.

Russia also suspended all flights to Egypt on Friday. Around 45,000 Russians are currently on holiday in Egypt, Oleg Safonov, the head of Russia's state tourism agency, Rostourism, said on Friday, according to Tass news agency. 

US President Barack Obama said on Thursday that a bomb on board was a “possible” cause of the crash.

Germany and France have also warned their citizens against traveling to Sinai, where major tourism hub Sharm El-Sheikh is located. German airline group Lufthansa said its low-cost carrier Eurowings and Edelweiss units are halting flights to the resort town for the time being as a precautionary measure given the situation in Sinai.

"The main concern is that the incident and the subsequent reactions could hamper tourism recovery," Amary Abdel Aziz, head of the Tourism and Aviation division in the Cairo Commercial Chamber, told Ahram Online by phone.

The tourism ministry has said the UK’s decision is a prejudgment ahead of the investigations results, adding that the Egyptian government oversees tourists’ safety while in the country.

"There is already an impact on future bookings following conflicting statements around the incident," the head of the Federation of Tourism Chamber El-Hamy El-Zayat said.

Tourism over the upcoming Christmas holidays will most likely suffer as tourist companies refund holidaymakers who cancel their trips to the country, El-Zayat added.

"We were hoping the 2016 season would be better than the weak 2015 season," Abdel Aziz said.

The ailing tourism sector is one of Egypt's main sources of foreign currency, of which the country is in dire need to buy basic foodstuff and fulfil its international obligations.

Foreign currency reserves are almost at a critical level, standing at $16.41 billion at the end of October.

In the first eight months of this year, Egypt received 6.6 million tourists, according to the state-run statistic body CAPMAS.

Egypt's tourism revenues surged 45.3 percent to reach $7.4 billion in the fiscal year ending 30 June 2015, compared to $5.1 billion in the same period the previous year, according to the central bank.

Although street protests in Egypt have decreased over the past two years, the recovery in tourism revenues remains well below the $12.5 billion generated in the peak year of 2010 prior to the uprising that unseated long time autocrat Hosni Mubarak.

The Russian plane crash could possibly prove to be more harmful to tourism than the recent incident in which a number of Mexican tourists were killed, Abdel Aziz said. But the final impact would depend on what investigations reveal, he added.

In September, an accidental attack by Egyptian security forces killed 12 Mexicans and Egyptians, also injuring 10 people, while they were on a safari tour in the Western Desert.

"Businesses are not yet closing but they are cutting costs and reducing labour," Abdel Aziz concluded.  

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Neo
08-11-2015 03:22pm
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Can’t agree more, Expat
As an observer of the tourism sector for many years I saw it deteriorating year after year, even before the revolution and terrorism. Egypt Tourism, planned and run correctly, could generate easily $50b/year. We have 3 strengths: Historical (ancient civilization), Geographical (climate/beaches), and Cultural (multi-religion); each should be fully developed. We have a major opportunity in a captive market of 1b people who love to visit Egypt, conditions permitting. The external threats could be mitigated with proper security and cooperation with other states. The main issue is internal weaknesses in term of planning, operations, and funding. The sector begs for major Turnaround experts to capitalize on the strengths and opportunities and resolve these weaknesses. Maybe Egypt should treat it like Oil; they need a joint venture with a competent international entity to lead the Turnaround!
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Rob
07-11-2015 07:10pm
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I would also like to visit Egypt, but not in these conditions
Egypt need to stop their own citizens which is causing much bigger problem than it was before.
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Neo
06-11-2015 08:35pm
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Egypt Tourism needs Structural reform
There is no doubt the plane crash would have a major impact, regardless of cause, on the already battered Tourism sector. However, before we blame the world reactions let’s step back and look at this objectively. (1) The sector collapsed in part due to local terrorism and over-reaction by security apparatus. (2) Even before the revolution, the sector was running on half capacity with major need for modernization and overhaul. (3) Isolated accidents serve as a mirror to see how the world really think about Egypt. We should accept the fact that the sector will not recover for a while, take a 2 year break to rebuild and structure it properly ready for relaunch in 2018 with a revenue target of $20b reaching $50b by 2025. Accelerate the creation of new economic sectors to rebuild the economy, not to cry over spilled milk when it comes to tourism and the canal. Take this disaster as an opportunity, no disrespect to lives lost, and recalibrate the economy, the policies, and the strategies.
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expat
08-11-2015 12:10pm
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have a closer look at egypts tourism
try to go in the details: you have 2 kind of tourism,first the classic beach tourism at sharm and the hurghada area(in the moment the last resort of income) and secondly the cultural/historic tourism in cairo,luxor,awsan,which is simply already dead due to lack of existing security. now one of the two last working destinations is hit directly before the winter season,and the russians might also fly out their hurghada tourists. the industry was already before this blow in dire state financially, but should support the country with hard currency...this with hotels,which havnt been refurbished/modernised at least for 5 full years since the revolution,but mostly much longer. there is simply NO MONEY to re-establish over a course of two years the closed sector and set it up in 2018. And the worst part is,egypt is loosing the last of its tourism credibility and public relations towards its visiting tourists
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expat
06-11-2015 06:36pm
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i am wondering...
didnt these tourism chiefs from egypt learn anything the last years???? they got beheaded forreigners in their country,shot to dead by military tourists, and now a full jet brought down by faulty security and they complain,that tourism might be hurt??????? you didnt got enough brains to get your government on track to secure the few places where tourists actually walk and fly...so blame yourself first! this egyptian drama is going on now since 2011 and nothing else than complaints, NO ACTION!!!!!!
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