Egypt: Reviving tourism

Prospects are brightening for the Egyptian tourism industry, with renewed growth expected this year after a difficult 2011. Tourism revenues could grow by more than a third in 2012, returning to 2010 levels, the tourism minister, Mounir Fakhry Abdel Nour, told the international press in late December.

In fact, Nour told OBG he is “confident that the situation will improve in the coming year to make up for the losses of 2011”. In 2010, some 14.7m tourists came to Egypt, generating $12.5bn in revenue. According to Nour, a similar performance is possible this year if the country can change the perception that it has become less safe in the wake of the protests that brought down President Hosni Mubarak in early 2011. The tourism minister noted that the country has long been a safe and secure place to visit but that it was important to remind potential visitors of this fact.

Nour also reported that tourism earnings reached $9bn last year, down almost 30% on 2010, while the 10.2m visitors in 2011 represented a 31% drop on the previous year. Tourist nights – that is, the number of nights spent by tourists in the country – declined by 22%, to 120m. These figures were broadly in line with the ministry’s forecasts, which took into account the effects of the political upheaval earlier in the year, as well as sporadic outbreaks of unrest since that time.

In addition to reminding potential visitors that the country is safe and stable, political leaders are also looking to reassure prospective tourists that any incoming government installed after the ongoing parliamentary elections and forthcoming presidential poll is expected to maintain Egypt’s tourist-friendly policies.

Islamist parties, which have performed well, have issued statements in support of the sector and addressed concerns that they could enact legislation damaging to the industry. In the past, hardliners have suggested segregated beaches and covering up Pharaonic sculptures, but given the importance of earnings from visitors, any government is likely to maintain a pragmatic stance.

Indeed, tourism is a large and important component of the Egyptian economy, providing millions of jobs and acting as a major source of crucial foreign currency earnings. According to the World Tourism and Travel Council (WTTC), a global organisation of industry leaders, tourism directly accounted for 7.3% of the country’s GDP in 2011. But the sector’s overall contribution – including the indirect impact of tourism on other sectors – is considerably larger, at 15.8% of GDP, according to the WTTC.

Despite the 2011 downturn and some international and domestic downside risks, the medium- and long-term prospects for the tourism sector are excellent. Egypt has swiftly bounced back from previous setbacks to tourism in the past, including terrorist attacks, outbreaks of disease, social unrest and international economic difficulties.

Indeed, Egypt’s timeless appeal to visitors remains undimmed. The country has some of the world’s finest ancient and Islamic monuments, art and architecture; a long, beach-fringed coastline; excellent weather year-round in much of the country; and abundant natural beauty, from the mountains of the Sinai Peninsula to the lush Nile Valley. Furthermore, the global tourism market is growing steadily, particularly given an increasing number of travellers from emerging markets, such as China and India.

That Egypt attracted more than 10m tourists in 2011, despite an uncertain political situation and a sluggish global economy, is testament to its enduring appeal as a destination. The immediate priority of making clear that the country is open for business has already seen considerable success. Promotion is likely to be stepped up this year, while industry leaders will be keen to work with the incoming government to try and ensure that foreign visitors are not deterred by new legislation.

Once there is a greater degree of clarity on Egypt’s political direction, the private and public sectors are likely to seek to work together on long-term development of the tourism sector, including building up sustainable and value-added segments and supporting growth in emerging destinations.