Egypt pushes tourism sector

Tourism plays a huge role in Egypt's economy, accounting for nearly 7% of the country's income and 10% of its workforce.

The industry had witnessed a steady recovery since the Sharm Al Sheikh bombings in 2005, which killed 88 people and devastated tourism in the country.

The country received 12.8 million visitors in 2008, generating 111 million tourist nights and about $11bn in income, Egypt's Assistant Minister of Tourism Hisham Zaazou told AME Info.

In the first half of last year the country's tourism industry was growing about 25% compared to the same period in 2007, he noted, but then the global economic meltdown began to have an impact.

'The media started to cover the financial crisis and it had a psychological effect on people and they became more cautious,' Zaazou explained.

'In December we were down four and a half percent compared to the same month in 2007. But for the entire year tourism was up 15%.'

However, Egypt's tourism industry has slumped further in 2009, having fallen 12% in the first quarter of this year compared to the same period last year, he said.

'The first quarter has not been great. Egypt is a part of the world, just like everyone else, so we are affected by the crisis, but it has not been catastrophic,' he said.

New tourism measures

To help shore up this vital pillar to the Egyptian economy, officials from the country's Ministry of Tourism met with major tour operators in Europe - the main feeder market to Egypt - who were asking for help in light of the economic slowdown.

Egyptian officials agreed to take several steps to help the operators, including offering to help pay for promotions targeting the country. 'We told them that we would give them a dollar against a dollar on promotions. If they spend a dollar to promote the country we will also pay a dollar,' he said.

The ministry also agreed to help pay for empty seats on the charter flights from Europe to Egypt that the tour operators arrange as part of their packages.

'We guaranteed to pay a certain amount of money for each empty seat, up to a maximum 70% of the seats on each flight. We want to make sure that they do not cancel their operations because to restart them after the economy recovers would be much more costly,' he said.

The ministry also agreed to exempt hotel establishments from tourism promotion fees which the ministry collects from the hotels, and it has changed its broadcast advertisement campaigns to focus on promoting Egypt as an affordable leisure destination.

A working group has also been set up to evaluate the progress of these initiatives each month, which means that some of these measures may be adapted as the need arises.

Zaazou says the ministry does not want to see a fare war, and has urged hotels to offer value for money rather than lowering rates. 'Unfortunately some people are panicking. They are seeing no light at the end of the tunnel, and the easiest way to attract business is to lower rates,' he said.

As winter is the high season for Egypt, tourism officials expect the industry to face a difficult summer. 'We believe 2009 will be a tough year, but 2010 will be better,' he said.

Hilton doing 'well'

Not all of the hotel brands based in the country have suffered too badly in the current crisis.

With 16 hotels in Egypt across all of its brands, Hilton says it has been doing 'very well' despite the economic downturn.

'We measure our success in terms of market share,' says Azza Serry, Hilton's senior director of business development for Egypt, Jordan, Lebanon, and Africa. 'We recognized the economic trends well in advance and were ready with our promotions and sales coverage.'

Egypt also relies on the GCC market, and Hilton has been trying to push more of that traffic to the country. The hotel chain is also trying to promote the idea that Egypt offers a number of great destinations besides Cairo.

Some Hilton hotels in the country have had to lower rates, but mostly they have been adding benefits. 'Our hotel guests in Egypt tend to stay longer and use our amenities more, so we are offering strong food and beverage and entertainment activities. We are also providing free transfers from the airport to the hotels. They want to be pampered and taken care of,' she said.

She noted that the most of the added benefits that the hotels are offering are free of charge. 'We recognize that this part of the world is also affected by the crisis. Everyone is trying to stretch the dollar, and that is what we are doing for them,' she said.