Business | Tourism
Egyptians fear repercussions of global financial crisis
Tour operators in the country say that the real effects of the slowdown will not be felt until March next year.
- By Ramadan Al Sherbini, Correspondent
- Published: 23:15 November 25, 2008
Cairo: The tourism industry, one of Egypt's key foreign currency earners, is likely to feel the impact of the global financial crisis, according to experts.
"The current crisis means that Europeans, who make up the majority of tourists in Egypt, have less money," said Tarek Adham, a member of the Tourism Investment Association in the Red Sea resort city. "There will be a decline of between 10 and 15 per cent in reservations for this Christmas, compared with last Christmas," he added.
Tourism, which has boomed over recent years, contributes an estimated $1.6 billion (Dh5.88 billion) per year to Egypt's economy. Concerns about the repercussions of the crisis have prompted Egyptian Minister Zoheir Garranah to set up a committee of tourism officials and experts who meet on a monthly basis to discuss the problem.
"The impact on the local tourism sector will not really be felt until March," Garranah said this month. "Reservations for the winter season were booked before the crisis hit."
The official has advised travel agents and hotels against slashing their prices, predicting that it will take around five years for financial stability to return.
"Hotel owners have already learned this lesson," said Fat'hi Nour, the Chairman of Egypt's Hotel Establishments. "In the aftermath of the 2004 terror attack in Dahab in South Sinai, hotel owners reduced their prices. After the consequences of the attack faded away, they found it difficult to increase prices again," Nour told Gulf News.
Egypt has used the World Travel Market, a major tourism event held in London this month, to promote itself as a less costly tourist destination. The country also plans to target Eastern Europe and other regions that have perhaps been less affected by the global financial turmoil.
"Timely action is key to weathering this storm," said Ahmad Balbaa, a tourism expert. "Negotiations should be held with Egyptian banks that have overseas branches to discuss the possible extension of financing to tour operators." He also suggested operating direct flights from Russian cities to Egypt's tourist attractions.
Despite acknowledging that hotel occupancy rates remain similar to the same period last year, Mona Thabet, a reservation official at a Cairo hotel, is apprehensive. "Local travel agencies and hotels are extremely worried about the repercussions of the economic recession," she said.
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