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Thursday, 24 June 2021

Winter in Egypt: A cold season for tourism

Increased coronavirus infections across the world are threatening Egypt’s tourism sector

Safeya Mounir , Thursday 22 Oct 2020
A cold season for tourism
Egypt’s tourism revenues are declining due to Covid-19 (photo:AFP)
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Egypt may see its worst tourism season for years this winter if reservations continue at their present rate, with bookings from Eastern Europe at the moment providing the only ray of light.

Due to increasing numbers of infections with the coronavirus in many countries and enforced lockdowns, many “previous reservations have been cancelled. Save for the Eastern European countries such as Belarus and Ukraine, we haven’t received booking requests from Europe,” said Karim Mohsen, a member of the steering committee of the Egyptian Tourism Companies Chamber and a tour operator.

Increasing numbers of coronavirus infections have led a number of countries to apply a nighttime curfew, including France. More countries are likely to follow suit.

In August, the International Monetary Fund (IMF) estimated that Egypt’s tourism revenues would drop by over two per cent of GDP as a result of travel restrictions imposed by countries to curb the spread of the virus.

Egypt’s tourism revenues decreased by 11.2 per cent on an annual basis during the first quarter of this year, recording the lowest quarterly level in the past two years, according to figures from the Central Bank of Egypt (CBE).

On the outbreak of the pandemic, the IMF expected Egypt’s tourism revenues to record $2.7 billion, down from $10 billion in the previous fiscal year. Before the emergence of the virus, the IMF had expected Egypt’s tourism revenues to increase to $17.8 billion, after its forecasts for the previous year had stood at $15.9 billion.

The IMF anticipates that the tourism sector’s contribution to Egypt’s GDP will retreat to 0.08 per cent in the current fiscal year, down from 2.8 per cent in 2019-20 and 4.2 per cent in 2018-19. The Fund has also projected that the sector will contribute 2.3 per cent of GDP next year.

It expects Egypt’s tourism sector to contribute 4.2 per cent to GDP in 2022-23, 5.1 per cent in 2023-24, and 5.7 per cent in 2024-25.

Hisham Al-Shaer, a member of the Egyptian Chamber of Hotels, believes there will be no reservations for the coming months, saying previous promises of bookings have not materialised. He added that while the UK market had planned to send tourists to Egypt, in fact there was only one weekly charter flight operating to Sharm El-Sheikh in southern Sinai.

Al-Shaer stated that occupancy rates in the resort city of Sharm El-Sheikh were estimated at 10 to 15 per cent and added that the majority of tourists were coming individually, not via tour operators, and through individual hotels’ efforts to market themselves as destinations.

Mounir Wissa, a member of the Association of Hotel Chambers and the owner of a floating hotel, seconded Al-Shaer’s words. Wissa said that with the current limited reservations, his hotel was hoping for just 10 per cent of last year’s occupancy rates and expected revenues to stand at five per cent of last year’s.

However, Wissa said that Egypt’s tourism would revive by October 2021 and expected the number of tourists to reach 50 to 60 per cent of 2019 figures. He said that local tourism should also be encouraged to save tourism companies from closing down.

On 27 September, the prime minister met with a committee from the Ministry of Tourism and Antiquities, a number of other ministers, and the head of the Egyptian Federation of Tourism Chambers. It was agreed that the tourism sector should be backed during the winter season from 1 November 2020 to 30 April 2021.

Three days later, the committee presented a set of recommendations to the cabinet for the support of the sector. The cabinet agreed to extend the exemption on visa fees for tourists arriving in the governorates of South Sinai, the Red Sea, Luxor, and Aswan from 31 October 2020 to 20 April 2021 in order to encourage tourists to visit Egypt, particularly amid the global economic crisis.

When the coronavirus pandemic first started to spread, the government took a number of steps to mitigate the crisis on the tourism sector. The CBE offered easy loans to tourist establishments and postponed the banking obligations of the sector as well as insurance and electricity payments.

Rami Rizkallah, a member of the Hotels Chamber in Sharm El-Sheikh, expected the tourism slowdown to continue through the spring, particularly with the rising number of infections in Europe.

He said it was essential to encourage the local tourism market to save hotels from closing down. International companies operating in Egypt should be invited to hold company meetings at Egyptian hotels to make up for losses from tourism, and Egyptian families not able to travel abroad due to coronavirus fears should be encouraged to visit Egypt’s tourist destinations, Rizkallah said.

*A version of this article appears in print in the 22 October, 2020 edition of Al-Ahram Weekly

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