Sharm El-Sheikh is sometimes called “the city of peace”, not only because of the inner peace people can find from its mountainous backdrop and golden beaches but also because of the international peace conferences and summits the city has hosted over the years. Located on the southern tip of the Sinai Peninsula, where the Gulf of Aqaba and Gulf of Suez meet with the Red Sea, Sharm El-Sheikh is the biggest and most important city in Sinai and one of the most renowned tourist resorts in Egypt. The city's beautiful landscape, warm sun and long stretches of natural beaches have made it one of the main attractions in Egypt for tourists and travellers from across the globe. The city also hosted a number of peace conferences during the rule of former president Hosni Mubarak. These included the 1996 Peace Summit, attended by many Arab and foreign heads of state, and the G-15 Summit, held for the first time in Egypt in 1998, which saw the conclusion of the Wye River Agreement between Palestinians, represented by leader Yasser Arafat, and Israel, represented by then-Prime Minister Ehud Barak in September 1999. Sharm, as it known by Egyptians, also hosted the Trilateral Summit, attended by then-President Mubarak, Saudi Arabia's Prince Abdullah and Syrian President Bashar Al-Assad. to discuss the ongoing peace process in the Middle East. The “city of peace” is now, however, regarded by some countries as unsafe following the Russian plane downing over Sinai that killed all 224 people on board on 31 October. Russia and some Western states claim that the plane was brought down by a bomb in an act of terrorism. However, Egypt has said that investigations are still underway and that the Egyptian-led investigative committee, which includes Russian representatives, has not found any proof that a criminal act caused the crash. Though reports of a criminal or terrorist attack have not yet been confirmed, the plane crash has had a negative impact on tourism in Sharm El-Sheikh at one of the highest seasons of the year. November and December are peak season for foreign holiday-makers seeking the winter sun in Egypt, and thousands of British and Russian tourists were evacuated from the city in November, with some countries halting flights to Sharm El-Sheikh. UK tour operators and airlines cancelled flights to the Red Sea resort shortly after the crash, while Russia also halted all flights to Egypt. A British government delegation visited Cairo on 18 and 19 November to discuss with Egyptian officials a joint plan that would allow for the return of British flights to Sharm El-Sheikh. Though progress in the talks has been reported, it is not yet clear when British flights will resume. Halting the flights has led to cancellations at Sharm El-Sheikh hotels, and the number of tourists in the city has dwindled by the day. Russia and the UK send the largest number of tourists to Egypt, and in 2014 Egypt received around three million Russian tourists. The tourism sector, a mainstay for Egypt's economy, was hard hit by the political turmoil following the 25 January Revolution. Tourism has fallen sharply from its peak in 2010 when it earned a record $11 billion for the country, with more than 14.7 million tourists visiting Egypt. With greater political stability now in place, tourism had started to recover and saw a remarkable recovery in the second half of last year. Tourist arrivals increased by nearly 70 per cent in the third quarter of 2014, compared with the same period the preceding year. This year, around 6.6 million tourists had visited Egypt by the end of September, producing revenues of $4.6 billion, compared with 6.3 million in the same period last year when $4.5 billion was generated. Tourism Minister Hisham Zazou told Reuters in an interview in September that he expected around 10 million tourists to visit Egypt this year or even more. However, this figure may now not be reached because of the blow that the Russian plane crash has had on tourism in Sharm El-Sheikh, responsible for about 30 per cent of Egypt's tourists. During a recent visit by Al-Ahram Weekly to Sharm El-Sheikh, it was found that the number of tourists was decreasing because departing tourists were not being replaced as incoming flights to the city were still suspended. Shops, bazaars and restaurants were competing to attract the remaining tourists in a bid to fill the almost abandoned hotels and facilities. Hotels have made competitive offers to attract foreign and domestic tourists to the city. However, the number of tourists is unlikely to rebound as long as the UK and Russia continue their suspension of flights to the Red Sea resort. The hit to the tourism sector will also negatively impact the economy at large. The situation could put thousands of Egyptians working in the tourism industry out of a job, adding to Egypt's soaring unemployment rate, which currently stands at 13 per cent. Tourism is one of the country's main hard currency earners, and a drop in tourism means a lower hard currency income, which in turn will put more pressure on the Egyptian pound with greater potential for quick depreciation. The pound currently stand at LE7.73 to the dollar. Since January 2015 it has lost around 10 per cent of its value. The drop in tourism revenues is particularly critical given that the other main source of foreign currency, the Suez Canal, saw its revenues drop by close to seven per cent year-on-year in October. Revenues from the canal in October fell to $449.2 million, compared to $482.3 million in October 2014. The drop in receipts from the international waterway is attributed to the slowdown in global economic activity, but they are expected to pick up in early 2016. Any drop in Egypt's foreign currency earnings not only affects the country's ability to import its basic needs, but could also have repercussions on its credit rating. In November, the international credit ratings agency Standard and Poor's cut its outlook for the Egyptian economy from positive to stable on the back of expectations that deficits in the country's balance of payments would persist in the light of reduced Gulf aid. But despite the gloomy scene in Sharm El-Sheikh, workers and businesses there are hopeful that the situation is only temporary and that the clear blue waters and warm sun will bring the tourists back. Egypt's tourism has survived setbacks in the past, and this one may be no exception.
