In search of the lost tourist
Since 2011, Egypt is struggling with visitor numbers, which have plummeted even faster since the end of last year. The country is betting on international promotion and new tourist spots to get foreigners to come back.
Cairo – Egypt’s tourism industry had its best year ever in 2010, with close to 15 million foreign visitors and USD 12.5 billion in revenue. Since then, however, there was the Arab Spring, the political and social volatility that ensued, and the crashes of Russia’s Metrojet plane on the Sinai, in October 2015, and of Egyptair’s on the Mediterranean last May. All of that had widespread repercussions on Egyptian economy.
Last year, 9.3 million people did tourism in the country, with revenues clocking in at USD 6.1 billion, i.e. less than half as much as 2010. And the slump tends to go on. H1 2016 saw tourist numbers drop 50% from H1 2015, with total revenue projected to fall in the USD 4 billion-to-USD 4.5 billion range.
“Tourism is still struggling [with the aftermath of the events of the past few years],” said Egyptian Tourism Authority chairman Samy Mahmoud. “The activity is crucial to the economy; it accounts for 11.3% of GDP and 4 million direct and indirect jobs,” he added. The percentile of the Gross Domestic Product he names is from the industry’s peak period.
According to Mahmoud, tourism brings in 20% of foreign currency inflows to the country. The drop in visitor numbers, shrinking remittances from Egyptian expatriates worldwide, and stagnant global trade, which translates into weak income at the Suez Canal, widened the current account deficit, forcing the government to rely on foreign financing. Last month, for instance, Egypt struck a deal with the International Monetary Fund (IMF) for a USD 12 billion loan over a three-year period.
The shortage of dollars on the market weakened the Egyptian pound, creating inflationary pressure, an additional economic issue. Annual inflation hit 15.5% in August, the highest in seven years. There’s a wide gap in the foreign exchange market – while the official exchange rate is 8.88 pounds per dollar, the going rate on parallel markets is occasionally higher than 12 pounds.
That doesn’t mean Egypt’s economy is on its knees. In the last few years, the country had financial aid from Gulf nations including Saudi Arabia, the United Arab Emirates and Kuwait, and the government is working to encourage exports and attract foreign direct investment. President Abdel Fattah El-Sisi is taking trips abroad to “sell” Egypt around the world. He recently attended the G20 summit in China in the capacity of guest.
Promotional actions are taking place in several countries, including Brazil – next November should see it host a conference of the Egyptian General Authority for Investment (GAFI). “I get frequent queries from Brazilian companies interested in Egypt,” said the Brazilian ambassador to Cairo, Ruy Amaral.
The IMF estimates that Egypt’s GDP will grow 3.3% this year and 4.3% in the next. “The economy is better now than two or three years back; stability increased and investments are coming in,” said Ali Al-Idrissi, an Economics professor at 6th of October University, in the Cairo metro area.
Apart from reining in the current account deficit, Egypt faces other challenges, like fighting unemployment and poverty, and getting government finances in order. Tourism also plays a pivotal role in this respect. “The economy is growing at a quite respectable rate, but Egypt has big problems whose solutions are complex,” said Amaral. “And I don’ see any short-term solution other than a rebound in tourism,” he stressed.
In this sense, the Egyptians are taken a series of measures to attract the visitors back, such as negotiations with the countries that suspended flights after the explosion of the Metrojet plane, especially Russia, which, at the time, was the largest source of tourists to Egypt. The minister of Tourism, Yehia Rashed, told ANBA that he is expecting flights from Russia to resume soon,and for the United Kingdom to lift its ban on flights to beach resort Sharm El-Sheikh. “Egypt is a safe destination and we have more potential than other destinations,” said the minister.
Despite the recent events and activities of armed groups in isolated parts of the country, usually trips to Egypt are indeed safe. Urban violence and muggings are rare events in the big cities and main tourist spots. “I have been traveling throughout Egypt and I feel perfectly safe, more so than in Latin America, and particularly in Brazil, and I never hesitate to recommend the country to my friends,” said ambassador Amaral.
And he’s not alone. A former player of Botafogo, Santos and the national team, Rildo Menezes has been working for two years as coordinator of the youth categories of Zamalek, one of the main Egyptian soccer clubs, and says that he and his wife, Teresa, walk the streets of Cairo late at night without fear of being attacked. “Besides, they really like the Brazilians,” he said.
According to Rashed, the strategy to attract tourists includes digital marketing campaigns, modernization of tourism services and infrastructure, encouraging the addition of more flights to the country, searching for new markets, etc.
Regarding the flights, Amaral said that an agreement between Brazil and Egypt to prevent double taxation of airlines is ready to be signed, and will definitively pave the way for the inauguration of a non-stop route. “We tried to pressure Egyptair [to create the route], but they don’t have enough airplanes at the moment,” said Samy Mahmoud of the Egyptian Tourism Authority.
Flight or no flight, the agency plans on advertising the destination in Brazil. In March, for instance, it sent Egyptian tourism industry executives to World Travel Market Latin America expo in São Paulo. “We have begun the work in Latin America, especially Brazil, Argentina and Mexico,” said Mahmoud. Last year, according to him, Egypt welcomed 33,000 Brazilians, 21,000 Argentinians and 16,000 Mexicans. From January to July 2016, however, the number of visitors from these countries declined in comparison to the same period of 2015, in line with the global trend.
ANBA visited the traditional tourist spots in Cairo and surroundings in the second week of September, such as the pharaonic necropolis of Saqqara, Old Cairo (the Coptic Christian Cairo) and Islamic Cairo (the medieval Cairo), and confirmed that foreigners are in smaller numbers than in the past, although it’s still the off-season. This situation drove down prices in the capital. Discount sales are plenty. .
But the country has the capacity to welcome a lot more tourists. “If we do more promotion activities, public relations and advertising, we will succeed,” said Samy Mahmoud.
The Egyptians are also betting on offering more attractions, such as the Pyramid of Unas, in Saqqara, an important landmark of Ancient Egypt (read more in the Tourism section) that reopened to visitors after 20 years. Other measures already announced are the reopening of the tombs of Queen Nefertari, in the Valley of the Queens, a masterpiece of the pharaonic period, and of Seti I, in the Valley of Kings, both in Luxor.
The minister of Antiquities, Khaled El Enany, pointed out to ANBA the reopening of Cairo’s Museum of Islamic Art, which was closed for two years, and of the Mallawi Museum, in Minya, Upper Egypt, which was plundered in 2013; the nighttime opening of the famous Egyptian Museum in Cairo, the inauguration of the National Museum of Egyptian Civilization, and of the Grand Egyptian Museum in Giza.
The initiatives also include the creation of a single pass to allow several attractions to be visited instead of having tourists buy separate tickets, as in many European cities. The maintenance and restoration of monuments depends on tourism, since ticket sales are an important source of revenue. “We have a budget problem, but the government is helping plug the deficit to enable the maintenance [of museums and monuments] and the execution of major projects,” said Enany. “We are optimistic regarding the near future,” he asserted.
The country has set an ambitious target of reaching 2020 with 20 million tourists and revenues of USD 25 billion. “I hope we can achieve it, since we are facing tough times,” concluded Samy Mahmoud.
*Translated by Gabriel Pomerancblum and Sérgio Kakitani