Although tourism figures are on the rise, much is still needed to reach the industry's full potential, writes Sherine Nasr Against a backdrop of escalating violence in the region, the number of tourists visiting Egypt continued to grow by two per cent during the first half of this year. "Egypt expects to receive some nine million tourists this year, compared to 8.6 million last year," announced Minister of Tourism Mohamed Zohair Garana, during his meeting with the Egyptian Junior Business Association (EJB) recently. "Under current regional circumstances, it was rather unrealistic to hope for substantial growth in the number of tourists to Egypt." The growth is partly due to the increase in the number of Arab tourists to the country, estimated at 15.6 per cent more than the same period last year, according to Garana. Last year, tourism was one of the top earners of hard currency for the country with $6.4 billion in revenues, and an unprecedented growth in the number of tourists who spent 85 million tourist nights -- a seven per cent increase compared to 2004. The tourism sector provides more than two million direct and indirect job opportunities, which amount to at least 12 per cent of Egypt's total workforce. "The potential in the sector is huge," stressed Garana. "We are planning to increase the number of tourists to the country to 15 million within the next 10 years." To achieve this goal, a $40 million promotion and marketing campaign was launched a few years ago to target tourists in potential markets. A tailored campaign for the European market proved successful, with a 33 per cent increase in European tourists in 2004 when the campaign was first released. The campaign in Arab countries yielded equally satisfying results. Despite the good performance of the sector, the hurdles which investors need to overcome to create a successful business are many. Topping these obstacles is the lack of financial services. "Credit facilities given to the tourist sector are only 11 per cent of the total credit extended by banks to different sectors," according to Hesham Shoukri, head of EJB's tourism committee. "This is a very modest figure which by no means reflects the importance of the sector as a main supplier of hard currency and new job opportunities." Shoukri continued that banks are still reluctant to extend facilities to what they see as a high-risk activity, which leaves investors bewildered at not finding suitable credit facilities. "Establishing a specialised tourist bank through a consortium of major banks in Egypt may provide an answer to this urgent need," he suggested. In the past, Egypt had failed to attract Foreign Direct Investment (FDI) to this vital sector. Egyptian law does not facilitate ownership, rental or sale of property by foreigners, which for Shoukri bodes ill for the industry. "Foreigners should be given the same rights as Egyptians in this respect," he said. "This will encourage more foreign investors to come to Egypt and market our tourist products." Nonetheless, early this week Emaar Egypt -- a consortium of the UAE-based Emaar Properties and the Egyptian Artoc Group for Investment and Development -- won a bid for LE1billion, paying LE160.5 for each metre of the 6,200 million square metre area which lies on the North Coast of the Mediterranean at Kilo 125. Emaar Egypt plans to develop two five- star hotels, a marina, a luxury golf course, shopping centres, helipad and sports facilities. The project will be completed in six years time at a total investment of LE11billion. The aim is to ultimately develop the site into a source of attraction for European and Arab tourists all year round. Once completed, the project will perhaps provide the first fully developed tourist resort on the Mediterranean in Egypt. "The coastline of the Mediterranean has been wasted by building numerous tourist villages which lack proper vital services," complained Garana, "which has driven tourists away." Although Egypt is renowned for its ancient history, cultural tourism to Egypt accounts for only 20 per cent of the total number of tourists visiting the country every year. According to Shoukri, Egypt has a comparative advantage in other types of tourism, such as conference and yatching. "The unique position of Egypt, the good weather all year round and the extensive coastlines on the Red Sea and the Mediterranean necessitate more attention to developing these two types of tourism in particular," insisted Shoukri. According to Garana, serious steps have already been taken to develop conference tourism to Egypt. An international Chinese company was contracted to build a five-star hotel at the Cairo International Conference Centre (CICC), and the government is considering "handing over the management of the CICC to international marketing," divulged Garana.
