Revolution leaves Egypt without dictator, but also without tourists

As political turmoil and sectarian strife continue to afflict post-uprising Egypt, the tourism industry is struggling to get its high season – which runs from March through September – off the ground.

“Usually after some kind of tumultuous incident the industry in Egypt bounces right back up,” said Ulrich Huth, managing director of the hotel sector at Travco, Egypt’s largest travel company. “I’ve been here through 9/11, the Luxor massacre and the Taba bombings, and every time it sprang right back up. But this time, I just don’t see that happening anytime soon.”

Egypt’s tourism sector accounts for six percent of the country’s GDP, having brought in 14.8 million tourists and approximately US$12.9 billion in 2010 alone.

According to statistics from the Ministry of Tourism, these numbers have dropped dramatically, with February 2011 bringing in only 20 percent of what it did in 2010 – followed by a rise to 40 percent in March, and 65 percent in April.

“These numbers might lead one to presume an optimistic view,” said Huth. “But I predict that we’ll be back to around 50 to 55 percent in May. The market is being shuffled around; last month we saw a record number of Egyptians travel to local destinations like Ain Sokhna. This distorts the ministry’s statistics because Egyptians are not the ones going into the souvenir stores or taking camel rides to the pyramids.”

With each new incident of political upheaval in Egypt, the number of tourists compared to last year’s fluctuates immediately and accordingly, with the occasional 1 percent rise when things quiet down.

“When the churches were torched earlier this month, we had 15 percent cancellations, creating a massive market dip in just one weekend,” said a tourism specialist from the ministry who wishes to remain anonymous.

She blames foreign media more than the political environment for provoking fear in potential tourists. “The media loves to hang on to that ‘million-man protest’ catch phrase, as well as play on people’s prejudices about Islam and the brotherhood, because it sells. But those headlines are seriously affecting the industry and sending tourists elsewhere,” she said.

Some tour operators abroad, who already booked packages to Egypt are now offering to send tourists to other destinations, and offering bonuses for the inconvenience.

The Egyptian tourism sector is employing a number of strategies to protect against this problem, but none of them guarantee a solution.

“The first thing that happens is all the hotels and tours immediately drop the prices,” said Youssef Fayez, owner of Eastmar tourism agency. “But what that does is shift the clientele, because everyone who was determined to come will now stay in a five star hotel because they get it at two star prices. Fair enough, but that means that the smaller hotels and agencies, who usually bring in a large bulk of the tourists, are now going to be hard pressed to make it through the summer.”

Some hotels now offer as much as an 80 percent discount from their normal rates.

This is leading to a rivalry within the market between privately-owned hotels and rented hotels because of differencing market benchmarks. Privately owned hotels only need 20 percent occupancy to turn a profit, as opposed to 60 percent with rented establishments. The price drops are leading to unhealthy competition within the industry itself.

“Dropping the prices is a temporary solution and ultimately, a careless one,” said Fayez. “It allows for the privately-owned institutions to stay afloat, while crushing the long-term sustainability of Egypt’s tourism sector by devaluating Egypt’s public image.”

Despite the prices dropping and the internal industry turmoil, safety continues to be the biggest issue affecting the industry at large. This has lead to various safety campaigns through tour operators abroad, as well as a persistent search from local agencies to attract new markets.

“I am constantly telling our partners abroad to stress on the safety factor,” states Huth, the German MD from Travco. “I tell them that I feel safer at 1am in Tahrir than I would in Frankfurt. But campaigns will only go so far until more time passes and the foreign media calms down.”

Now, Huth says, the industry has to change its focus. “So what we are trying to do is sell the uniqueness of Egypt once again. Tourists might be able to change their beach destination, but they can’t change their pyramid or their Valley of the Kings destination. So in search of new markets in India, China and Europe, we are now getting tour operators to stress the irreplaceable attractions of Egypt, in combination with the low prices.”

Though analyses of the current season remain bleak, travel experts predict that tourism should pick up in November, when bookings for the coming year’s high season usually peak. How substantial the recovery is remains to be seen.

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