Growth in Egypt's Tourism Industry

GROWTH IN EGYPT’S TOURISM INDUSTRY

Copyright © 2015 IQPC Middle East. All rights reserved. WWW.TOURISM-EGYPT.COM GROWTH IN EGYPT’S TOURISM INDUSTRY 1 Produced by IQPC Middle East in association with the Tourism Egypt Summit taking place in November 2015 in Cairo, Egypt. Tourism is one of the industry as new investments are economic mainstays of beginning to make a significant Egypt’s economy, rivalling impact on annual tourism revenues. Confidence is rapidly building once the importance of the more and visitor numbers are on revenues of the Suez Canal the increase once again. and remittances from In 2014, visitor numbers rose to Egyptian nationals living 10 million with estimated annual and working abroad. Having revenues climbing to $7.5 billion experienced a downturn in with official figures from the recent years, the tourism Ministry of Tourism showing that sector is now turning a the average tourist’s expenditure reached $81.3 per day, compared corner and working steadily to $63.3 by the end of the year towards rivalling pre-crisis before.1 levels of tourist revenues. Both the Egyptian Government There is a newfound and international tourism operators confidence in Egyptian have recognised a need for In 2014, visitor stimulation in this industry and the numbers rose to tourism that is backed by resultant change on the country’s government investments tourism sector can already be 10 million with and increasing national seen through the actions of estimated annual stability that is helping organisations such as Egypt’s revenues climbing to to reassure international Tourism Development Agency (TDA). $7.5 billion visitors that the country is a viable holiday destination The TDA is an organisation once again. With dynamic designed to act as the link between plans and innovative government policy priorities and private investors. In the 2013/14 strategies in place, the fiscal year, the TDA received the Egyptian tourism sector highest annual revenues it has is now set to rival and ever earned since its foundation potentially eclipse the 20 years ago. Much of the $81.08 annual visitor numbers and million earned that fiscal year was derived from the advance revenues set pre-2011. payments from the successful bidders for new tourism projects The Road to Recovery along the Red Sea and Ain – Investment and Sokhna.2

Reappraisal 1Daily News Egypt, $7.5 billion tourism income to Egypt in 2014: Minister, 01/02/2014 Oxford Business After the difficulties of 2013, 2Group, Development authority sees record 2014-2015 has proved a turning revenues from investment deals, 2014 point for the Egyptian tourism

WWW.TOURISM-EGYPT.COM GROWTH IN EGYPT’S TOURISM INDUSTRY Planned Tourism total covering over 14 million square I anticipate a tender Investment Projects metres that are currently undergoing considerations for tender bids. taking place in the Ain Sokhna: On the western bank of The previous Minister for Tourism, north coast this year the Gulf of Suez and only a 2 hour Hisham Zaazou announced at a drive from Cairo, Ain Sokhna was press conference in September after the armed forces originally only open to the wealthy 2014: complete some urbanites in the capital but recent “I anticipate a tender taking place of the necessary years of development proposals in the north coast this year after the have turned the area into a lure armed forces complete some of the procedures. The area for tourism. Late last year, new necessary procedures. The area has has four airports and investment plans were announced four airports and close proximity to close proximity to by Ibrahim Ashmawy, investment Cairo and Alexandria thanks to a advisor to the Minister of Tourism, strong transportation network.” Cairo and Alexandria which detailed the development of thanks to a strong over 19 million square metres of Sharm el Sheik: Although already land in Ain Sokhna for the purposes a traditionally tourist-centric area, transportation of tourism-based accommodation, Sharm el Sheik continues to attract network. amenities and utilities.3 new investments in order to solidify its international appeal and generate While much of Ain Sokhna’s higher visitor rates. Last year one investors are Egyptian developers, investor, The Middle East Company greater flows of foreign capital are for Touristic Investment, announced being attracted to the development plans to spend upwards of $14 projects thanks to the combination million to construct an additional of valuable land offerings and 502 hotel rooms to be added to increased commercial opportunities the company’s 40, 000-sq-metre 4 for successful development bidders. compound in the area.5 North Coast: In order to build on its already strong Mediterranean 3Oxford Business Group, Development authority tourism presence, more tourism sees record revenues from investment deals, 2014 resorts are planned along Egypt’s 4Ibid 5Ibid north coast. The development areas consist of five plots of land in Marina and south Al Alamein, in

WWW.TOURISM-EGYPT.COM GROWTH IN EGYPT’S TOURISM INDUSTRY Appealing to both Innovative Marketing New and Established and Partnerships Markets The Ministry of Tourism is looking By necessity of falling visitor rates, even further afield than Russia Egyptian hotel and tour operators in order to attract new tourists to have been offering high discounts consider Egypt, and as such it has and attractive packages to encourage prepared a $40 million marketing tourists to return. This strategy has plan that is to be implemented over met with mixed success but it is the course of the next three years. ultimately encouraging a shift in the The ministry’s ultimate aim is to profile, nationality and destination achieve annual visitor rates of 20 choices of visitors to Egypt. million visitors as well as annual national tourism revenue rates of $20 The numbers of high income and billion by 2020.8 luxury tourists coming to Egypt have declined markedly since “We seek to be present in new “We seek to be 2011 and they remain low despite markets, especially in Latin America and East and South Asia, in order present in new the prevalence of competitively priced holiday packages and to encourage tourist arrivals and markets, especially accommodation options. This is visits to archaeological sites that in Latin America because they are less sensitive to were the hardest hit during the past price points and remain more acutely four years,” said previous Tourism and East and South sensitive towards the considerations Minister, Hisham Zaazou. Asia, in order to of the safety, security and political The marketing contractor for the encourage tourist stability levels of their choice of ministry’s $40 million, three-year holiday destination.6 arrivals and visits to advertising campaign is due to be announced in late 2015. While the archaeological sites However, while luxury tourists from the US, and Western European countries specifics of the marketing strategy that were the hardest have declined, low-to-middle income have not yet been announced, the newly appointed Minister for hit during the past tourists from Russia, Georgia, India and China have assumed a greater Tourism, Khaled Ramy, was keen four years,” proportion of Egypt’s annual visitor to point out that it would highlight Hisham Zaazou, previous numbers as they respond to the heightened security conditions in key Tourism Minister attractive prices on offer. Russian tourism regions as well as the more tourism remains particularly key to traditionally appealing qualities of Egypt, with more than 3 million visitors Egypt: from that country in 2014 despite “The message is right on my face: the fall in value of the Rouble.7 This it’s seven o’clock in the morning demonstrates the growth potential of and we already have this beautiful new national markets as well as the sunshine here in Sharm El-Sheikh,” established return visitor markets. he said during a poolside interview at 9 Domestic tourism is also increasing a luxury hotel given in March 2015. for the same reason of economic expediency. Top tier luxury hotels 6Euromonitor International, Travel and Tourism in have become markedly more Egypt Report 2014, Nov 2014 7Daily News Egypt, $7.5 billion tourism income to affordable to Egyptian holidaymakers Egypt in 2014: Minister, 01/02/2014 as hotel groups and the national flag 8Reuters, New Egypt Tourism Minister sets out 2020 growth plan, 15/03/2015 carrier EgyptAir continue to market 9Ibid competitive deals and packages.

WWW.TOURISM-EGYPT.COM GROWTH IN EGYPT’S TOURISM INDUSTRY Egyptian Tourism – With the support Revitalised and Ready and cooperation for 2020 Renewal of government The combination of a stabilising political scene coupled with agencies, there heightened security measures has currently exists caused many travel warnings to be lifted, encouraging the return of a significant holidaymakers to Egypt. Egypt is opportunity to now seeing annual visitor numbers increase from the low point of offer these new 2013 as tourists from both new markets exciting and established markets decide to experience the well-known delights and increasingly and charms of Egypt. competitive Negotiation agreements are already This process of renewed market products and underway for the partnering with confidence in the tourism sector is establish a national flag carriers such as Etihad being markedly aided by affirmative Airways and Emirates Airline for this action from Egyptian Government greater presence national tourism revival campaign. organisations as they encourage in this rapidly This will ensure the continuation of new investments as well as attractive flights and accommodation innovative new marketing strategies regenerating deals to entice visitors as the that will keep Egyptian tour operators sector. government also seeks to prevent competitive and relevant. the double taxation of airlines and tourist agencies so that they can In order to capitalise on this stage keep their prices competitive.10 of revitalising the Egyptian tourism sector, vendors need to understand Agencies such as the General the requirements of the rapidly Authority for Tourism Promotion are diversifying market as it extends to adding to the international Eastern Europe, Latin America and awareness of Egypt’s tourism Southeast Asia. With the support potential. In July 2015 it established and cooperation of government its first office in the GCC, located in agencies, there currently exists the UAE’s capital, Abu Dhabi. The a significant opportunity to offer newly opened office’s directive is to these new markets exciting and support the “20 million visitors by increasingly competitive products 2020” initiative in any way possible. and establish a greater presence in Its primary objective is to cooperate this rapidly regenerating sector. with all domestic and international airlines that have flights to Egypt while encouraging the creation of 10Reuters, Egypt announces plans to revive flagging tourism sector, 04/05/2014 new flight routes to further improve 11Daily News Egypt, Egypt implements first office in the convenience of travel and UAE to revitalise tourism, 27/07/2015 from the country’s main tourism destinations.11

WWW.TOURISM-EGYPT.COM GROWTH IN EGYPT’S TOURISM INDUSTRY Sources: http://www.theguardian.com/world/2014/aug/29/egypt-tourism-revenue-falls- 95-percent http://www.euromonitor.com/travel-and-tourism-in-egypt/report http://www.dailynewsegypt.com/2014/02/01/egypt-tourism-recover-modestly- 2014-oxford-business-group/ http://www.travelweekly.com/Middle-East-Africa-Travel/Insights/Egypt-on-the- road-to-tourism-recovery http://www.oxfordbusinessgroup.com/analysis/looking-ahead-development- authority-sees-record-revenues-investment-deals http://www.oxfordbusinessgroup.com/news/egypt%E2%80%99s-tourism- sector-hopes-return-holiday-makers http://www.dailynewsegypt.com/2015/02/01/7-5bn-tourism-income-egypt- 2014-minister/ http://www.reuters.com/article/2014/01/21/egypt-tourism- idUSL5N0KV0TQ20140121 http://www.dailynewsegypt.com/2015/07/27/egypt-implements-first-office-in- uae-to-revitalise-tourism/ http://www.reuters.com/article/2015/03/15/us-egypt-tourism-minister- idUSKBN0MB0EX20150315 http://www.reuters.com/article/2014/05/04/us-egypt-tourism- idUSBREA4305B20140504

WWW.TOURISM-EGYPT.COM GROWTH IN EGYPT’S TOURISM INDUSTRY 6 To find out more about the latest in the Egypt’s tourism sector, don’t miss the Tourism Egypt Summit (24 - 26 November 2015, Cairo, Egypt) developed with input from the government authorities and tour operators including Egyptian Tourism Authority, Egyptian Tourism Federation, Egyptian General Company for Tourism and Hotels, Travco, Meeting Point, Emeco Travel, EgyptAir and more. Visit www.tourism-egypt.com for more information.

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