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Cairo Conflict and Tourism

Situation in Egypt

David Scowsill, World Travel & Tourism president & CEO  Feb 07, 2011

Egypt is one of the most successful destinations of recent years, working to attract new tourism business despite frequent crises. The US$12.5 billion spent there in 2010 represents 16.5% growth on the previous year and a three-fold increase since 2000. Such growth is reflected in the hospitality sector where hotel occupancy rates grew by 4.8%, with average daily rates up 20% and revPAR up 26%.

The North African country has enjoyed mass-market growth, particularly in the Red Sea resorts, following huge investment in infrastructure, hotels and attractions. Today it welcomes 16.6 million arrivals – up 18% last year and not only from the western world, but from the Gulf and Saudi Arabia too.

Benefiting from one of the world’s biggest budgets for tourism promotion and marketing, Egypt’s government has always recognised the value of its visitor economy, stepping in with major campaigns after crises. Indeed it has worked with industry to adopt sensible policies that have helped Travel & Tourism thrive, for instance liberalising air access to stimulate aviation growth and offering minimum seat and load guarantees to give tour operators and carriers the leeway to kick-start market demand. In coming weeks and months, many will be looking to any new government to offer similar support when the time is right.

For the current situation is unprecedented – at least since the Suez Crisis in 1956, Uncertainty about whether violence will escalate into civil war makes it difficult to predict how or when the situation will end.

Certain practicalities are already hindering the country’s industry, such as the closure of the Pyramids – one of the destination’s greatest attractions – and the curfew is disrupting flights. The shutting down of internet services has its own impact with Skyscanner searches for the summer months being worst hit, and those for Sharm el Sheikh down by 60%. Any damage may not be resolved as quickly as Egypt and the industry would like.

What will be crucial for the economic success of Egypt’s Travel & Tourism industry in 2011 and potentially beyond, is their ability to attract travellers in the winter season between now and April. Losing the winter season could mean more significant repercussions, especially if coupled with a possible summer downturn as customers, planning and booking trips now, are put off by news coverage.

Wider predictions about the region’s instability and its impact on oil availability and prices, may seem dire, but are something that many at the top of the industry will be giving close attention. Another certainty is that it will raise debate surrounding government travel advisories, reiterating that such information needs to be accurate, location specific, timely and updated regularly: ensuring that an entire country’s economy need not suffer if incidents affect only one part.

Despite this, there is much to remain positive about. While part of Egypt may be on its knees right now, many key tourist destinations are isolated and away from the cities where incidents have taken place. Demand still remains as people continue to enjoy their holidays around Red Sea resorts. The realistic appreciation about the extent of the violence by other governments and the industry also sends positive messages to consumers and may reduce the long term damage. If the situation is resolved within the next couple of weeks, then the impact will be less and the tourism recovery will be quick – as it has proven so before.

Egypt and the ripple-effects in its neighbours present an unpredictable situation that the industry continues to monitor closely. What we can count on is that the Travel & Tourism will do all it can to protect the safety and security of its customers. And that, when the time comes, the WTTC will be there to help remind the world of the power of Travel & Tourism to put Egypt on its feet once again.

Situation in Egypt
David Scowsill, World Travel & Tourism president & CEO

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