Egypt: Promoting a crucial sector

An ambitious growth plan for Egypt’s tourism industry, a major contributor to the wider economy, is under way to steer the sector forward after political revolution in 2011 put a damper on arrival numbers and revenues.

However, taking into account the revolution’s effects on the sector, Egypt still attracted an impressive 10m visitors in 2011 and maintained its position as the most-visited country in the region. While this was a good performance given the circumstances, industry leaders and the government are determined to support further recovery to growth. The aim is to ensure that business not only regains its pre-revolution strength but rapidly outstrips it.

In March, Amr El Ezabi, the head of the Egyptian Tourist Authority (ETA), announced an urgent plan for reinvigorating tourism that aims for 15m tourist arrivals per annum as soon as possible. El Ezabi, speaking before the parliamentary Media, Tourism and Culture Committee, said that priorities would include reassuring potential visitors that Egypt remains a safe place to visit and focusing on important established and high-income markets, including the UK, Germany and Italy. These three markets accounted for more than half the 4.5m European visitors to Egypt in 2010, according to the Central Agency for Public Mobilisation and Statistics (CAPMAS).

Advertising campaigns worth a total of $10m have been launched in such countries, including a high-visibility poster campaign in the UK. El Ezabi also drew attention to the importance of promotion in the Gulf and suggested that an Egyptian tourist office should be opened in the region, potentially in Kuwait.

In March, Egypt became the first Arab nation since 1966 to be the official “country partner” at the ITB Berlin, the world’s premier travel fair. The ITB, a forum for representatives of businesses across the international tourism industry, is considered an important event for marketing and networking. Egyptian industry leaders, from both the public and private sectors, were actively engaged in promoting the country at the ITB.

For some time, Egypt has been looking to develop higher value-added niche tourism in an effort to diversify the sector, increase margins and promote regional development. El Ezabi implied support of this trend, suggesting that safari tours and Nile trips are areas of particular potential. The ETA chief noted that the Sinai Peninsula would be ideal for safaris. Nile cruises are a significant business that draws some well-off visitors, but the famous route from Cairo to Aswan – home to many ancient sites – has been suspended for 16 years due to concerns about security and the environment. The government has now signalled it wishes to throw its weight behind re-launching the service as part of the tourism revival strategy.

Indeed, new vigour in tourism promotion and diversification is deemed particularly important due to last year’s drop in visitor numbers to 9.8m from 14.7m in 2010, according to official figures from the tourism minister as quoted in local press. Sector revenues fell to $9bn in 2011 from $12.5bn a year earlier, nearly a 30% drop. This was a better performance than expected, however, given the unrest seen in several major cities and the difficult economic situation in several of Egypt’s key tourism markets, notably the eurozone.

The Red Sea resorts, however, which are central to the tourism industry, were largely unaffected by protests. Nonetheless, a degree of uncertainty about the political and social situation has had an effect on the wider industry, and Egypt’s reputation as a safe and stable place would benefit from a bit of restoration.

Still, the sector was growing strongly until 2011 and should continue to play a central role in reinvigorating the economy. The World Tourism and Travel Council (WTTC), a global body of sector leaders, estimates that tourism and travel directly contributed $15.41bn to GDP in 2011, accounting for 6.7% of GDP overall. (The WTTC uses a broader definition of the sector than official statistics, including some domestic transport and government spending, hence the higher figure.) The industry’s total contribution, including the “indirect and induced” impact on other sectors, was much higher, at $33.44bn, or 14.8% of GDP. The importance of tourism, even in a slow year for the sector, is clear enough.

Thus the new drive to promote Egypt is imperative. The partnership between the government and private sector to send the message that Egypt is open for business, and to look to a rapid recovery of visitor numbers, is a positive sign for a country in transition.