Sherine Nasr examines the challenges facing Egypt's tourism sector Amid attempts to streamline business and explore new ways to promote the tourism industry the last thing anyone in the tourist sector needed was a bombing in the heart of Islamic Cairo. Last Sunday's incident evoked images of earlier, more devastating attacks, one of which took place in nearby Al-Azhar in 2005. This time, however, life appears to be moving back to normal in almost no time. "So far I can't say the bombing has had any effect on my business," says Fathi Amer, owner of a brass workshop in Khan Al-Khalili. Amer's main concern is whether or not the attack will be followed by others. "We have started to feel the recession biting. If similar attacks were repeated we would be looking at a worst case scenario." "It is premature to talk about the repercussions of the bombing. It will take time before it becomes clear what impact it has had on potential visitors from abroad," says Ilhami El-Zayat, chairman and CEO of a number of tourist companies and former chairman of the Egyptian Tourism Federation. "I believe tourists were not the target in this particular incident." That did not prevent those working in the tourism industry from holding their breath when news of a bombing spread. Egypt's once blooming, now stumbling tourist sector, is particularly vulnerable to the current international financial crisis. For three years the number of tourists visiting Egypt has been steadily growing. In 2008 12.8 million tourists spent 129 million tourist nights in Egypt, according to Ministry of Tourism figures. Last year the sector accounted for 5.6 per cent of GDP, with tourism sector feeding industries accounting for a further 6.2 per cent. The labour intensive hospitality industry has created many new jobs. All that, though, could easily change. "It is true that no cancellations have been reported. But new bookings, particularly for the coming Easter season, do not at all level with the same period last year," said one general manager of a tourist company who requested his name be withheld. "We have a hard season ahead of us," he said, adding that profit margins have been squeezed as tight as they will go. The outlook, though, is far from uniform. Cairo, for example, remains fully booked, thanks to conference tourism and other activity based attractions. Sharm El-Sheikh and Hurghada are also reporting occupancy rates of between 40 and 50 per cent, while Luxor and Aswan are also expected to manage as the two main centres for resilient cultural tourism. But there are shadows elsewhere. Three hotels are reported to have closed in Marsa Alam on the Red Sea, and lay offs have occurred in other Red Sea resorts. It is Nile cruises, however, that have been worst hit. "This is supposed to be the peak season for Nile cruises. The typical tourist is European. Yet cruise boats are reporting their weakest performance in years," comments the source. Many fear the current slowdown in tourism to Egypt could precipitate the kind of price cutting last seen in the 1990s. According to El-Zayat, it took the best part of a decade for hotels and other tourist establishments to become fairly priced after they slashed their charges in the wake of the series of terrorist attacks that rocked the industry in the mid-1990s. "Let's face it, lower prices mean a lower quality service. This will ultimately result in losing customers," says El-Zayat. Although steps have been taken to launch more effective marketing campaigns promoting Egypt as a destination, charter flights have been given lucrative breaks and increasing attention is being paid to local as well as Arab tourism, the fact remains that the industry continues to lack a single, coherent vision. "There are laws but they are not compelling. Those who violate the regulations are seldom punished and it remains as difficult as ever for the industry to act in unison in times of crisis," comments El-Zayat. A good example is the Crises Fund, established in 2002 with the aim of helping employees in sectors facing a sudden crisis. While many tourist companies paid their dues others did not. "The fund never materialised. We have lost our money and there is little to do to stop trained labour from being laid off," said El-Zayat. Despite all the odds, El-Zayat remains optimistic. "Tourists have become resilient. They will continue to travel. There are great opportunities to seize," he says, stressing that competitive pricing, fine weather and a full package of diversified attractions and activities will allow Egypt to continue to compete.
