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Living

Bringing Egypt's Tourism Back from the Brink

In many ways, Egypt’s tourism industry has been teetering on the brink for the last five years

Man leads camels, photo: The News/Rich Grant
2 years ago

FIRST IN A 10-PART SPECIAL SERIES: EGYPT, LAND OF ETERNAL REBIRTH

CAIRO – On Jan. 25, 2011, thousands of disgruntled Egyptians, inspired by the birth of the so-called Arab Spring in nearby Tunisia, took to the streets in Cairo’s Tahrir Square to demand the resignation of the tyrannical Hosni Mubarak, a strong-fisted military dictator who had run the country for the last 30 years.

Decades of fiscal and monetary mismanagement, along with blatant corruption, had left Egypt’s economy in dire straits, with a dysfunctional structure, rampant unemployment, dwindling foreign reserves, mounting inflation and widespread shortages.

Much of the economy has stagnated because of the drop in tourism. Photo: The News/Rich Grant

The only saving grace for the battered Egyptian economy at that time was its tourism industry, which accounted for more than 12 percent of the nation’s GDP and provided direct and indirect employment to about 13 percent of its workforce.

The eventual overthrow of Mubarak on Feb. 11, 2011 created a sudden vacuum of political power and direction in the Arab World’s most populous nation, and the well-oiled machinery of the Islamist Muslim Brotherhood (MB) quickly maneuvered its way into civil prominence and produced a candidate who promised to fix Egypt’s economy through religious ideals and equality for all.

Four months later, the MB’s Mohamad Morsi was ushered in as Egypt’s first freely elected president and as a champion of the lower classes, which make up a full 42 percent of the country’s population. But Morsi and his fellow MB Freedom and Justice Party administrators were more concerned with imposing sharia law and dispersing the “infidel” Christians (who account for 10 percent of Egypt’s population) than revamping the country’s economic backdrop.

Consequently, the country’s economic woes worsened. As the Egyptian pound fluctuated from day to day, the cost of basic food and household necessities soared. Worst hit was Egypt’s tourism industry, which registered a 70 percent drop-off in worldwide visitors in just 12 months.

Soon disenchanted with their new leader, the people of Egypt once again took to the streets and demanded Morsi’s immediate ouster. With the help of the military, led by the young and charismatic Field Marshal Abdel Fattah el-Sisi, the Egyptian people again deposed their leader on July 3, 2013.

An interim government led by Adly Mansour, then-head of the country’s Supreme Constitutional Court, was sworn in the following day and a roadmap to a new constitution and new elections was quickly charted to redux Egypt’s path to democracy.

The international press and many foreign political pundits, however, had a field day blatantly condemning the ouster of Morsi, claiming that his removal constituted a military coup against a duly-elected president.

Egypt

Photo: The News/Rich Grant

Wary governments around the world again issued tourist advisories recommending that their citizens avoid the Land of the Nile, and again, Egypt’s tourism industry was devastated.

According to the Egyptian Tourism Ministry, 2013 was the worst year on record for the sector, with visitor numbers down another 50 percent comparted to the previous year and hotel occupancy rates in single digits in some regions.

When the much-loved and magnetic El-Sisi was elected president in May 2014 in a landslide victory with 93.3 percent of the votes, he immediately began efforts to revitalize the nation’s waning economy, including the tourism industry with an all-out “Visit Egypt” campaign that included a $40 million deluge of media fam trips, glossy promotional ads and discounted tours.

By early 2015, Egypt’s moribund tourism industry was beginning to show new signs of vitality, and although still in dire straits, there was optimism that the sector was finally back on track for a more stable and lucrative future.

But the unfortunate accidental killing of 12 civilians – including eight Mexican tourists – in Egypt’s western Wahat region in September of last year, and the subsequent downing of a Russian passenger jet of the country’s Sinai Peninsula killing 224 people in the resort city of Sharm el-Sheikh in October have again crippled the industry.

Hisham Zazou and Thérèse Margolis. Photo: The News/Rich Grant

Until last Thursday, Egypt’s Tourism Ministry was led by the dynamic and always-optimistic Hisham Zazou, who has been promoting Egyptian tourism for more than a decade in both the private and public sector (Zazou was replaced by Mohamed Yehia Rashed during a cabinet reshuffling last week).

Before the reshuffling, The News sat down with Zazou in his offices to discuss how the Egyptian Tourism Ministry is redoubling its efforts to ensure the safety of international tourists and to counter the negative headlines with more positive news such as the proposed opening of additional tombs in Egypt’s Valley of the Kings and the possible revealing of the burial site of Queen Nefertiti, as well as the promise of a new and spectacular Grand Egyptian Museum in Giza in 2018.

In many ways, Egypt’s tourism industry has been teetering on the brink for the last five years. What is your government doing now to rescue it after the tragic incidences in the Wahat desert and Sharm el-Sheikh?

Unfortunately, Egypt has had some tough times these past few months. Yes, we had some mishaps in 2015, but we look forward to 2016.

The past few months, particularly after the jet crash in Sinai, our travel business went down tremendously. The losses that we have incurred were to the tune of approximately 2.2 billion Egyptian pounds per month (about $255 million), which is a lot of money for Egypt.

We decided as a government to move very fast and felt that the best way to do that was to deal with reality. As they say, perception is reality, and the perception was that the world thought that we didn’t have adequate control in our airports. That’s what happened with this crash.

We decided to hire an independent body, a third party, to assess the situation. We are following all of their recommendations to the letter and I think the situation on the ground regarding security is moving in the right direction. I think things will be definitely okay in that sense.

Egypt depends a lot on tourism, and having said that, one of the main sources we need for new business is from the United States and Latin America at large. Mexico is a very important market for us, as are Brazil and Argentina. To attract those markets, we have plans to establish direct flights to Latin America sometime in the coming year or so.

We believe the demand for Egypt is there. People in Latin America want to come. We want to establish easy access for them to come on one hand and for them to feel positive about issues of their safety and security on the other hand. We are working on both those issues: safety and security.

What percentage of the Egyptian economy currently depends on tourism?

The Egyptian tourist industry currently represents 11.2 percent of Egypt’s GDP. We have 4 million people directly or indirectly dependent on tourism for their livelihood. Tourism is a very important source of foreign currency for the Egyptian economy. Even in 2014 and 2015, despite the difficulties we faced, tourism contributed $6.1 billion towards the Egyptian economy. The Suez Canal, meanwhile, contributed only $5 billion. So even with all the problems, its contribution to the economy was significant.

Simply put, when the Egyptian tourism industry is doing well, the whole economy moves ahead.

How badly was the tourism industry affected in 2015?

We don’t have exact figures for 2015 yet, but it wasn’t a good year for us. Six months out of 12 were not good. But we ended the year better than we had expected.

We believe the real challenge will come in the next three to four months because a lot of our European business has stopped. It will take some time to get it back.

But we still feel optimistic that the weeks and months to come will be better than the period in the last six months of 2015.

You mentioned that you are looking at developing direct flights between Cairo and destinations in Latin America. Do you know specifically what countries?

Yes. I think the two or three countries, one after the other, should be Brazil, Argentina and Mexico, for starters. Once we have those flights, we believe tourists from the rest of Latin American countries can feed into whichever of those flights is closest to them.

We have already increased our flights to New York, and we look forward to new flights to Los Angeles and the West Coast later on. We are also looking to expand access to Egypt from China and India.

You said that your European market has suffered the most since what happened in Sharm el-Sheikh. Do you feel that the crash had less of an effect on the American and Asian markets?

Luxor Temple

Luxor Temple. Photo: The News/Rich Grant

Because of proximity, we have larger numbers coming from Europe. Basically, 73 percent of our tourism comes from Europe, east and west. They come for their vacation on the beaches. Sharm is particularly attractive to tourists from Russia and Great Britain. The Germans go to Hurghada by the Red Sea. For the Europeans, Egypt is very close, less than four hours, and some of the destinations are less than two hours away for countries like Italy. So we are attractive to them for beach holidays.

But places like the United States or Latin America have fantastic beaches of their own. People don’t come all the way to Egypt from the Americas to lie on the beach. They come to see our ancient treasures, the Nile, for cultural tourism.

Tourists from the Americas usually represent a higher-end market than their European counterparts. They spend more money and they spend more time. That’s what we need more of at the moment, so we are looking to attract those markets.

In addition to adding direct flights, what are you doing specifically to attract U.S. and Latin American tourists and to assure them that they are safe in Egypt?

We think we are addressing the core problem. The problem resulted in the banning of air traffic to Sharm or other cities basically because of perception or the fear of terrorism. People want to be assured that our airports are safe and secure, so we decided to take the matter seriously. Although we believe our security was already adequate, we are enhancing the level with additional safety requirements and procedures to satisfy our European partners.

In the case of Mexico, there is a lot of negative publicity right now due to the accident in the Wahat desert. What are you doing specifically to court Mexican tourists back to Egypt?

Let me begin by extending my regrets to your country and all Mexicans, and let me add that this incident, which took place last September in our western deserts, has most certainly affected the perception of Egypt in Latin America.

Now, in order to regain the confidence of the Mexican tourists to Egypt, we in Egypt are taking the incident very seriously. Currently, there are two investigations being conducted in Egypt. One is being conducted by the attorney general. The other one is being conducted internally in the ministry here, and we have discovered that this tragic incident was a result of a mistake by the tour company that left the main road.

Hisham Zazou, former Egyptian minister of tourism Photo The News Rich Grant

Hisham Zazou, former Egyptian minister of tourism. Photo: The News/Rich Grant

This Egyptian tour company was responsible because they strayed off the established path. I got that report and I immediately requested the Egyptian tourism industry leaders to come meet me. I told them we needed to do something and I revoked the license of this company.

Also, although our sector is suffering a lot, members of the Egyptian tourism industry have decided they’d like to show a gesture of regret for that incident. The industry is ready to compensate the victims and their families financially and in accordance with Mexican law and whatever else can be done to satisfy them.

And I want to add that the Egyptian government is still moving forward on the external investigation of the case. I do not want to disclose other measures that Egypt will be taking to show our regret on what happened on one side and our respect for the people who lost their lives or were injured and to their families and to Mexico and Mexican people at large.

Going back to my previous question, in addition to establishing direct flights, what are you doing to promote Egypt in Mexico specifically and in Latin America in general? How do you court the Latino market?

I believe once we finish resolving the problem in Mexico, we are going to need to have a promotional campaign in the country. We are willing to enter into a partnership with Mexican tourist agencies and to help sponsor marketing activities on a 50-50 basis, so they pay a dollar, we pay a dollar. We also want to organize activities of interests like a Mexican week in Egypt and an Egyptian week in Mexico. I believe these sorts of activities should continue and complement the airline.

I think that, for the moment, we have to be practical. People coming all the way from Mexico to Egypt, especially those coming for the first time, want to see the pyramids. They want to see the Nile. They want to see Luxor and Karnak temple. So I think we need to focus on attracting more cultural tourism rather than resort tourism.

But we’re open, of course. I would love to see Mexicans instead of coming for a week in Egypt, to come for 14 days, with one week for culture and one week for fun. They could go to the beaches and scuba dive. We have one of the best scuba locations in the world at the Red Sea.

But for now, we want to concentrate on our main product, which is cultural tourism.

Earlier, you made reference to the Suez Canal, which was expanded late last year and is expected to more than double the waterway’s earnings over the next 10 years by better connecting Europe and Asia. Do you see the canal as a possible new area for tourism and investment in tourism?

The Suez Canal itself has a story to be told. I think people who come to Egypt, particularly to Cairo, can in one hour or so visit the Suez Canal, so it could be a tourism destination, besides offering investment opportunities. I think it’s an interesting tourism product to tell the story of how the Suez Canal was built and our latest achievement enlarging it.

We have plans to build hotels and resorts around the Suez Canal, but they are still in the infancy stage.

Do you have anything else you want to add?

Only that Egypt is open to tourism and that we have a wealth of cultural and other attractions. And as for the safety of coming to Egypt, when you are here, you can see for yourself how safe it is to walk around and feel at home. Egypt is safe and we are doing everything we can to make it even safer so that our guests feel welcome and secure when they visit.

The pyramids at Giza The News photo Rich Grant

The pyramids at Giza. Photo: The News/Rich Grant

THE NEWS

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