Egypt’s Sharm el Sheikh on the rebound

Egyptian Minister of Tourism Ahmed el Maghraby expressed enthusiasm about the state of the Arab republic’s tourism after the recent incidents on the Red Sea resort of Sharm el Sheikh challenged the country’s topmost foreign currency earner. He said “Although we have experienced this month a 15 percent drop in arrivals this time last year, there are clear signs the industry is on the way to recovery.”  Late July, a series of bomb attacks in Naama Bay that hit the heart of the well-established tourism industry in Sinai took the lives of 88, most of them locals; a handful, Western and Arab tourists.

But previous to that from January to August 2005, Egypt was soaring by almost 8.5 percent from year prior; a growth Maghraby said was not as encouraging as the year previous when the increase was over 25 percent from 2003.

However at the opening today of the 6th Mediterranean Travel Fair (MTF) taking place September 6-8 at the Cairo International Conference Center in Nasr City, el Mahraby indicated the crisis is truly over.  “To say that Sharm el Sheikh is in crisis is incorrect. I have every confidence that the demand will build up in the coming months until the end of the year. We shall bring the numbers up to previous levels and it will be impressive. Egypt’s numbers will be higher compared to that of our neighbors,” Maghraby said alluding to a recent diversification of the product he calls residential tourism.

“Egypt has not even barely scratched the surface. All ideas for the promotion we come up with fly.”
In the last 3-4 months, tourists / foreigners came in droves to the non-touristy areas and invested in residential units, a sign he says that Egypt has not been impaired by the recent events in the Sinai Peninsula and Cairo. Investors showed a great level of satisfaction in the project tourism has embarked. While Spain built 750,000 rooms but sold 3.6 million residences, Maghraby would like to see Egypt replicate the success even if only 1 percent of the Spanish cut could be achieved in the beginning.

World Tourism Organization’s secretary-general Francesco Frangialli remains hopeful despite the tragedies that seem to impact not only on Egypt, but also on the entire world. He said the immediate response of the state’s emergency services and security forces kept the situation under control from the outset. The destination has 132 hotel establishments with a total capacity of 30,000 beds, he said adding “In general, there is a difference between Sharm el Sheikh and the rest of Egypt’s destinations whether on the Sinai itself or in other traditional urban or cultural destinations. Most of the experts we consulted affirm that the forecast performance of other Egyptian destinations should not be significantly affected.”

“When a destination has occupancy of about 60 percent, it does not mean it is in crisis, just because it has constantly enjoyed over the years occupancy rates of 90 to 100 percent this time of year. We have a significant decrease but there is no crisis in Sharm el Sheikh,” Maghraby said.
Oversupply of rooms has neither slowed-down nor increased cost of running the facilities in Sinai. The Egyptian government has significantly put a tighter grip on building aids and licenses. “We have made it slightly more difficult to initiate addition of number of rooms in Sharm el Sheikh. There are however other targets we have in the destination. And there, the supply does not outnumber the demand. Definitely not. Actually, the problem of tour operators is to secure a large number of reservations,” Maghraby said. The decision to control the expansion of hotel rooms does not reflect supply and demand but the concern to preserve the natural landscape and coastal areas of the resort.

Trip cancellations and postponements are occurring but it is too early to assess the significance. “The trend seems to point to a reduction in cancellations and a rise in new bookings over the next 2 – 3 months. Recovery will be different in each source market in terms of perceived security, price and accessibility,” said Frangialli.

On the US market, Maghraby indicated his ministry hopes to up the numbers of American travelers. Definitely the opening of the King Tutankhamun and the Golden Age of the Pharaohs exhibit in Los Angeles has been a great success in encouraging the Americans to look at Egypt as their next travel destination. “The US travelers coming to Egypt has increased by 13 percent. This market has always been an important business for us, in fact, not in the distant past, Egypt had been the number one partner of the US in the tourism exchange. And I believe, the US can compete aggressively for that position now held by Italy, Germany and Russia.” Definitely the launch of the Pharaoh show in Fort Lauderdale, Florida this December will rev-up the cycle for the US inbound market.

According to World Travel and Tourism Council’s 2005 forecasts, Egypt is one of the leading travel and tourism economies in the Middle East, and indeed in the world, ranking second and 14th respectively in 2005 in terms of projected annual increase of total demand. Egypt will be able to boost international arrivals to 13.4 million per year by 2011 (compared to 11 million if no policy changes occur), increase travel and tourism industry gross domestic product (GDP) by 12 percent in 2011, adding US$1.6 billion to travel and tourism GDP (compared with projections made in the absence of liberalization), generate 223,000 more jobs in the travel and tourism industry by 2011 than would be generated in a non-liberalized aviation environment and push up overall real GDP across the economy by 1.8 percent by 2011. Last year, Egypt enjoyed an unprecedented 8 million arrivals.

At the trade fair, Prime Minister Ahmed Nazif together with el Maghraby welcomed scores of Arab and foreign tourism ministers, senior officials and hundreds of tourism leaders and representatives from 28 participating countries. On top of 33 new exhibitors this year, new participants Cuba and Kenya have also come on-board in a bid to attract buyers. Tom Nutley, Chairman of the MTF’s organizer Reed Travel Exhibitions said the number of buyers this year has increased almost 25 percent adding there had been a significant increase in stand space and a wealth of new features in this 2005 fair including Tunisia as a feature country and the creation of an Egyptian Pavilion which houses the pillar of Egypt’s tourism including the Egyptian Tourism Authority, the Egyptian Travel Agent Association, the Egyptian Hotel Association and all governorates.

Amir Fahim, Reed Travel Exhibitions in Cairo, projects the Eastern Mediterranean region to flourish and develop at an impressive rate as more visitors flock to Egypt to take advantage of the climate, culture and resort leisure.

Egypt has, in the last years, employed Sharm el Sheikh to promote the tourism industry, diverting attention from the classical offerings to the country’s Mediterranean appeal. When Cairo was not all that sizzling, the Red Sea was made to put the heat on the sun-sand-sea allure of the coast.

The Land of Turquoise, the Land of Enchantment or the Bridge to Asia, as Sinai is affectionately called, rose to fame without much dependence on the kingdoms’ citadels and monuments that had put Upper and Lower Egypt on the international culture and archaeology maps. In the last decade, Sinai has enjoyed fame and popularity such as had never been seen in the days of the Ramses the King and Tuthankhamun. The peninsula has gained global attention more from its rich religious history, its wealth of coral reefs and marine life, its verdant oases, its haunting deserts, the battles fought under Ramses II, Alexander the Great, Napoleon Bonaparte against Salah El-din and later, the 1973 war between Israel and Egypt.

Shaped roughly like an inverted triangle in shape stretching from Port Said and Rafah in the north and Ras Mohamed as vertex in the south, bordered by the Mediterranean Sea, the Red Sea, and the Gulf of Suez and Gulf of Aqaba, Sinai can be easily reached by air, land or water with the domestic carrier EgyptAir flying from Cairo twice daily and a hosts of European charter airlines coming on a regular schedule. From Hurghada, approximately 730 kilometers from Sharm El Sheikh, a ferry makes a 90-minute trip available mornings. A hydrofoil operates every now and then, depending on passenger load. Otherwise, the affluent many and the moneyed tourists can leisurely slip in for few days on their luxury yachts and speedboats as there are ample marinas in the area. Another option: charters from Aqaba in Jordan are readily available on their circular itineraries.

By Hazel Heyer

CAIRO, Egypt (eTurboNews)

September 7, 2005   Posted in: Egypt