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Egypt: Egypt Tourism Profile


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Egypt losing competitive edge in 2013

According to the travel and tourism competitiveness report published by the World Economic Forum in 2013, Egypt dropped 10 places in the global assessment to 85th position. This drop was mainly because of the deterioration in the safety and security environment in the country. Both, number of tourist trips and tourism receipts recorded a significant drop in 2013.

Inbound tourism hit by political clashes in Egypt

The first half of the year 2013 started on a good note when the number of tourists increased compared with the first half of 2012. This was driven by aggressive marketing efforts from the hospitality industry to attract more tourists by providing attractive and discounted offers.  However, during the second half of 2013, Egypt witnessed one of the worst tourism seasons in modern history. The growing tension and violence post President Moursi’s ouster, decreased tourism in the following month significantly. The tourism went further down post the bloody clashes and the dispersal of the sit-ins during August. A large numbers of governments issued travel warnings to Egypt across all its cities. Russia and Germany, which are considered the largest source markets, cancelled all their organised group trips to Egypt until the end of September 2013.

A shift in tourist profile, nationality and destination

Since the Arab spring, hotels and tour operators have been offering high discounts and attractive packages to lure in tourists. This strategy has attracted lower income travellers in comparison to 2010. Another reason contributing to the low flow of luxury tourists is that they are usually less sensitive towards the offers and quite sensitive towards the security and political instability. Given the political instability, this trend is expected to continue for the coming year. Given the current turmoil had reduced the flow of tourism stemming from European countries and Russia, Egypt is aiming to attract tourism from other countries, primarily Georgia, India and China.

Domestic tourism grows in response to attractive hotel offers

Despite the unrest in the country, domestic tourism witnessed improvement versus 2012 especially to the top tier hotels which were usually expensive to stay in. The growth comes in response to the initiatives from hotels and EgyptAir that offer reduced rates and packages to stimulate domestic tourism.

Domestic tourism to tourist attractions declines

While the luxury domestic tourism increased, the frequency of domestic tourism for touristic attractions or other cities in Egypt decreased, especially from the middle and lower strata of society. This had to do with the high inflation rate and hence lower disposable income. Furthermore, the security conditions in some cities reduced the day trips to touristic attractions.

At the end of January 2011 the country was hit by a wave of massive political protests, which came to be known as the Egyptian Revolution. The move led to the resignation of a 30 year long autocratic regime led by Hosni Mubarak. Despite some violence, the outcome of the revolution was rather positive, especially compared to other regional markets where the uprisings have dangerously degenerated like in Libya, Yemen and Bahrain. During the uprising, additional than 1 million tourists present in the country fled Egypt, and scepticism remains about how tourists will react during the upcoming transition period which is plagued by sectarian tensions and a difficult readjustment to democracy. Nonetheless, the long term repercussions could be additional than positive for Egypt, although some significant changes in terms of source markets may start to become visible.

Speedy recovery in 2010

After a sharp decline in 2009, Egypt’s inbound and outbound travel markets recovered to record positive increase rates in 2010, driven by improving economic conditions and dissipating concerns over the spread of the H1N1 virus. European and other source markets amount recorded positive increase in number of arrivals, with the fastest growing destinations coming from the GCC. Meanwhile, in the outbound travel category, departures to Saudi Arabia surged dramatically after a sharp decline caused by the H1N1 outbreak in 2009. The recovery of tourism flows led to a recovery across the board, in the travel accommodation, air transportation, car rental, travel retail and health and wellness categories, amount of which increased in price in 2010 after worrying declines in 2009. Egypt remains a highly competitive destination in terms of pricing. It is as well strategically located only a short distance away from Europe and the Middle East.

New increase from the GCC

Amount eyes are now turned to the GCC for next increase in Egypt’s travel and tourism industry. In 2010, Air Arabia increased the frequency of its flights to Arab cities, flydubai entered the market, EgyptAir introduced new routes to the GCC and Middle East, while travel retailers started targeting GCC residents additional entirely. This is a direct result of the Ministry of Tourism’s vision to grow the number of trips taken to Egypt by Arabs. A new advertising campaign targeting Arabs only was launched in early 2010 and its impact was visible, with close to 20% increase in arrivals from markets like the United Arab Emirates and Saudi Arabia, and further increase from Jordan, Qatar and Syria.

Targeting luxury

Another key area targeted by Egypt for next increase is the luxury segment and high-end tourism. Egypt already has the infrastructure for luxury tourism, and is attractive to high spenders as luxury Nile cruises are highly sought after by wealthy regional and international tourists, and visits to the Giza Pyramids and other archaeological marvels can be expensive. In 2010, and even in 2009, the performance of luxury cruises and occupancy at luxury hotels proved that the high end of the market was less vulnerable than others during tough economic times, and this has further encouraged the government to better target this segment.

Creating a health and wellness destination

Egypt is emerging as additional and additional of a health and wellness destination, primarily for spa goers, but as well for medical tourists. The country has a history of health and wellness in addition to which it offers the ideal natural environment and resources for this type of tourism. Medical tourism actually generates higher revenues than spas, but the number of hotel and resort spas is growing at a fast rate and this area is proving highly attractive as well. The government has recognised the potential of medical tourism and has launched strategies and tools aimed at increasing this type of tourism. Meanwhile, several new hotel and resort spas opened in 2010, including the Kempinski Nile and the Mercato Hotel. Egypt is as well getting its first Senses Spa, which marks a significant development in the industry.