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The Egyptian tourism sector started to gain momentum in the second half of the year thanks to factors such as the return of Russian tourists to Sinai in August and the lavish ceremonies of the Golden Pharaohs Parade in Cairo in April and the opening Avenue du Sphinx in Luxor at the end of November.
The rejuvenation of the industry came after a severe setback caused by the spread of Covid-19 in early 2020. However, the Omicron variant of the virus is now casting shadows of uncertainty over the industry, at least in the short term.
Without the discovery of the new variant in November, Egypt would have achieved the strong tourism growth seen in 2019, said Kamel Abu Ali, head of tourist company Albatros.
According to figures from the Ministry of Planning, Egypt’s hotel and restaurant sector grew by 181.8% in the first quarter of this fiscal year, indicating that the negative effects of the coronavirus on the sector were fading.
Many decisions have been made to support the sector since the start of the pandemic. In July, the Department of Health updated procedures for visitors, saying fully vaccinated passengers did not have to take PCR tests.
Abu Ali said the return of Russian tourists to Egyptian Red Sea resorts has boosted tourism to Sharm el-Sheikh and Hurghada, topping the list of travelers arriving in Egypt. Russian tourists returned to Hurghada on August 9 after a six-year ban on flights to Red Sea cities and Sinai following a 2015 plane crash that killed 224 passengers, for the mostly Russian.
August also saw an increase in the number of tourists to Egypt from Eastern Europe and Spain, said Mohamed Hassanein, director of Galaxia Tours, a travel agency.
Another decision to improve services offered to tourists in early December was taken by the Ministerial Committee on Tourism and Antiquities, which raised the minimum price for overnight accommodation to $ 50 in five-star hotels, $ 40 in four-star hotels, $ 30 in three-star hotels, $ 20 in two-star hotels and $ 10 in one-star hotels, as of May 1, 2022, with the exception of the governorates of Luxor, Aswan, New Valley and the cities of Taba and Nuweiba, where the decision will be applied from November 1, 2022.
Fixing a minimum price for tourist hotels has been a demand made by the country’s tourism sector for years to avoid the deterioration of services in some hotels. Poor service has affected the reputation of tourism in Egypt, and the reduction in prices adopted by some hotels in recent years has attracted low-spending tourists, many in the tourism industry believe.
The decision to set a minimum price for hotel rooms was taken at the same time as the gradual revival of the tourism sector, Abu Ali said.
However, Tarek Shalabi, head of the Marsa Alam Investors Association, believes the move could be a double-edged sword because while some hotels in MarsaAlam raised their prices, many tour operators who had contracts with hotels for prices ranging from $ 18 to $ 20 had refused to accept the further increases.
Shalabi added that outsourcing other companies requires the organization of more international exhibitions, which are currently limited due to the pandemic.
Karim Al-Miniawi, Board Member of Chamber of Tourism Enterprises and CEO of IMCO Tourism Enterprise, said Egypt received large numbers of tourists from Ukraine, USA, Poland and the Czech Republic.
According to the Ministry of Tourism and Antiquities, Egypt received 3.5 million tourists in the first six months of 2021, representing revenues of $ 3.5 billion to $ 4 billion, almost the same income earned during all year 2020.
The economic and social development plans drawn up by the parliament approve objectives bringing the flow of tourists per month to 400,000 in the first semester and to 750,000 in the second semester. They aim to increase tourism revenues in the current fiscal year to $ 6 billion, which is lower than the $ 6.8 billion forecast by the World Bank.
The Pharaohs Golden Parade which saw 22 mummies belonging to kings and queens of the Ancient Egyptian New Kingdom moved from the Egyptian Museum in Tahrir Square in Cairo to the National Museum of Egyptian Civilization (NMEC) in Fustat and the celebration marking the The opening of the Avenue of the Sphinxes in Luxor made international headlines, promoting Egypt as a premier tourist destination.
Al-Miniawi said the two events highlighted the cultural aspects of tourism in Egypt and helped promote it as a leading brand, especially as international media competed to cover the ceremonies.
But the spread of the Omicron variant of Covid-19 has led to a decrease in the number of tourists coming to Egypt, with Abu Ali and Shalabi reporting that cancellations have taken place in the German and French markets, respectively. Shalabi said hotel occupancy rates in Marsa Alam fell from 80 percent to 60 percent after the Omicron variant appeared.
France and Egypt have decided to only accept travelers with negative PCR tests, resulting in the cancellation of 30% of reservations.
Hassanein said few companies had canceled customer bookings, adding that the industry was holding its breath in anticipation of World Health Organization (WHO) statements on the Omicron variant. If the variant does not respond well to vaccinations, tourism rates are unlikely to increase more than last year.
Shalabi said that before the coronavirus outbreak, Marsa Alam received a large number of tourists from Germany, Italy and the United Kingdom, while this year the majority of tourists came from Poland, Ukraine and from the Czech Republic.
Al-Miniawi said state initiatives to support the tourism sector had helped, but they were not enough. The problem was not the decisions that had been taken, but their implementation. Banks had not fully implemented the decisions announced by the Central Bank of Egypt (CBE) to support the sector, he said, adding that only a fraction of tourism businesses had benefited from the initiatives.
In February, the CBE extended its efforts to help finance tourism businesses with guarantees from the Ministry of Finance. This includes allocating LE 3 billion of the LE 50 billion dedicated to financing tourism businesses to credit facilities, with the aim of helping them pay workers’ salaries and operating and maintenance costs. .
The initiative was originally scheduled to end by June 2021 or when LE3 billion has been spent, whichever is earlier. The grace period has been extended until December 2021, with the first installments due in January 2022 for the following two years. The state also decided to postpone insurance and electricity payments.
Shalabi said Marsa Alam did not benefit from the deferral of electricity bill payments since the city is lit by diesel generators. He praised the help received from funds set up to support the unemployed and state support for the tourism sector, even though this is done through loans. However, banks have not always been willing to give loans to tourism businesses, seeing them as a high risk sector, he added.
He said expectations for the tourism industry looked very bright before the Omicron variant appeared. The future of tourism in Egypt in 2022 will be determined by the effectiveness of the vaccines available against Covid-19, he said.
Without the emergence of the Omicron variant, Egypt’s tourism sector would have fully recovered by the first quarter of 2022, Al-Miniawi said.
* A print version of this article appears in the December 23, 2021 edition of Al-Ahram Weekly.
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