Egypt tourism making a comeback
The Egyptian economy’s biggest foreign currency earner staged a comeback over the summer and fall, revealing that the global slowdown’s impact on the sector has turned out to be relatively moderate.
The Ministry of Tourism announced in October that Egypt saw a 6.4% drop in tourism revenue in the first nine months of 2009. The number of tourist arrivals fell 5.4% in the same period, indicating that tourists had reduced their vacation spending during the crisis.
In January, investment bank EFG-Hermes reported hotel occupancy rates of only 40-45% in Egypt. Its forecast that tourist arrivals would shrink 18% in 2009, however, has not proved true.
In November, the ministry announced Egypt had received 10.9m tourists this year, only a 4.5% drop over the same period in 2008.
Low occupancy levels at the start of the year were partially attributable to the addition of 25,000 new hotel rooms to the market. By the second quarter however, figures had stabilised and hotel owners in beach hotspots Hurghada and Sharm El Sheikh reported 80% occupancy.
The Ministry of Tourism targets 14m visitors by 2011, which looks possible as Egypt returns to its pre-crisis levels.
With 70% of Egypt’s tourists arriving from Europe, the tourism bodies have focused on marketing the country’s closeness and affordability.
The numbers are not in yet, but 2009 should see a change in the demographic make-up of tourists to Egypt. Travellers from Russia have surged in recent years, accounting for a quarter of visitors to Sharm El Sheikh in 2008, but their market was one of the most severely affected in the financial crisis due to the decline of the rouble. On the other hand, tourism from Arab countries has been on a steady ascent and, as a demographic, they spend more money on average on luxury hotels and restaurants. This activity in the high-end segment has become increasingly vital, offsetting the damages to the tourism industry seen at the start of the year.
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