OBG talks to Mounir Fakhri AbdelNour, Former Minister of Tourism

Interview: Mounir Fakhri AbdelNour

How has the tourism industry been affected by the revolution? What signs of recovery have you seen?

MOUNIR FAKHRI ABDELNOUR: The tourism industry has been severely affected, particularly during the last quarter of 2011. Revenues dropped by 30% last year, due in large part to political unrest. Tourism revenues overall dropped to $8.8bn, compared to $12.5bn in 2010.

We saw a decline not only in tourist arrivals but also in terms of the daily expenditures of those visitors who did come. Tourists spent fewer nights in Egypt in 2011 than in the previous year, and spending on average was $13 less per person each day. Visitors spent a total of 114m nights in Egypt in 2011, compared to 141m nights in 2010, with spending per day dropping to around $72 per day versus $85 per day in 2010.

In terms of how the downturn has played out in specific markets, there are obviously some countries more affected than others – perhaps because some tourists are less courageous than others. Our top country for visitor arrivals continues to be Russia.

Ultimately, the short-term future of the sector’s performance all depends on the security situation. However I am confident the situation will improve in 2012, which will help make up for losses from 2011.

How can niche tourism segments be expanded?

ABDELNOUR: Egypt has a wide array of products for visitors, but the majority of our visitors come for leisure tourism. Cultural tourism only accounts for between 17-20% of revenue, which is quite low.

Obviously, given the historical sites and cultural legacies of Egypt, we ought to be able to raise that percentage. Our cultural heritage deserves more attention, which could even extend to forms of religious tourism, whether designed for Muslims or Christians.

In the medium term, it is important to diversify our markets and leave the beaten path. In the past Western Europe has represented the backbone of our tourism industry, but in the future significant growth will not just come from Western Europe. We need to attract the attention of visitors from new economic players, such as developing economies and emerging global markets.

We also need to raise the level of our services. We have beautiful hotels and resorts but we must improve the quality of services provided. Unfortunately, Egypt is often perceived as a cheap or budget destination. We need to change that. We can increase the value of our services and get an adequate price for them. For example, in order to give a boost to higher-end tourism in Upper Egypt we are now resuming a long Nile cruise, running from Aswan to Cairo.

How can Egypt balance demand in both the high-end and low-end segments of the market? What can be done to increase sector effectiveness?

ABDELNOUR: We need to expand different segments in different areas. We must take very good care of Upper Egypt in terms of upmarket facilities and in terms of targeting this market segment. I do not think we need to improve the numbers there, but we certainly do need to increase quality.

The government has been spending a lot of money to train workers and employees in hotels and transportation companies – whether in languages, skills or managerial ability – and we need this to continue.

What do you consider to be the main obstacles for investors looking to invest in Egypt’s tourism?

ABDELNOUR: What I see are some bureaucratic obstacles, but the government is committed to reducing these through appropriate reforms. Developers require permits from different ministries, for example, which can sometimes be difficult, but we are creating a one-stop shop within the country’s tourism development authority in order to overcome this.

We continue to welcome foreign investors and we are trying to give them all the possible support we can. There are a large number of projects under construction already, especially in the Red Sea area and we are putting lands, mainly in the coastal areas, up for sale.