State, banks should strongly support tourism sector in current period: Tourism Investors Association head

Operating costs have risen at rates ranging from 15% to 25%

Head of the Tourism Investors Association in South Sinai, Hesham Ali, called the government to focus its support on hotel investments, as they are dying after a crisis that has been ongoing for almost five years.
He told Daily News Egypt, for the second time in less than a month, that tourism is an important economical activity for Egypt, and should be given more attention.
Ali believes that there are a lot of burdens imposed on the sector that should not be imposed at this time.
The Ministry of Tourism announced that Egypt's tourism income during the first half of this year amounted to $3.3bn. How do you see that?
This income is very weak for Egypt's tourist resources. However, it is better than nothing under these difficult circumstances experienced by not only Egypt but the entire Middle East region.

You see what is happening in Syria and in Libya, Tunisia and Yemen, in addition to the recent events in Egypt during June and July where terrorist organisations assassinated the Prosecutor General. All of these events, of course, affect the tourism flow to Egypt.

How much is the hotel occupancy rates in Sharm El-Sheikh now?
Hotel occupancy rates in Sharm El-Sheikh are now range between 55% and 65%. These rates fall in other areas in southern Sinai, both in Taba or Nuweiba.
We hope that these rates improve during the next winter season when Europeans usually fly to Egypt.
During an interview with the Minister of Tourism this week, the minister announced that there is a slowdown in bookings for the winter season. How do you see that?
There is already a slowdown in the winter season booking, especially during August. This is because of the terrorist events in Egypt during the past two months, June and July.
But I hope bookings get better for the winter season through September and for the occupancy rate to improve during winter.

Some hotels complain of lower prices in Egypt, which impacts their earnings and their ability to develop their hotels. How do you see the crisis?

The tourism sector is approaching the fifth year of the crisis afflicting all of its corners. People with working experience flee Egypt, and accommodation prices drop down. In addition, the tourism demand on Egypt is declining.

This four-year continued crisis has made the price of hotel rooms fall by more than 30% compared to the price in 2010. You should bear in mind that operating costs have risen at rates ranging from 15% to 25%.

This crisis has made some hotels sell their rooms for less than $15 during the past four years. It has improved last year to reach $25, but there are hotels that offer much higher prices.

Five-star hotels had to lower their prices, which affected the four-star hotels. Eventually five-star hotels suffer.

Maybe hotels are forced to since working is still a better option than not working or laying off labour.
How do you find the state's support of hotels at present?

The state should strongly support the hotels in the current time, after four years. These hotels and that sector is one of the important economic sectors to Egypt.
The workers in the tourism sector know that taxes and charges imposed on the sector are the right of the state, and should not evade paying them. However, the sector is suffering a crisis, and the moment is not suitable to bear more burdens.
As for the banking sector, the banks are should support hotels more. We know that the banking sector bore a lot of burdens in regard to supporting the sector.
The financial dues on hotels were delayed more than four times over four years. However, the banks' abandonment to lend the hotels will negatively impact them, which will make them suspend their operations, and consequently, threatens the banks' dues, in addition to the laying off of workers.

Do you believe that the sector will overcome the current crisis?

Yes, I am optimistic in spite of everything. We cannot help but to be optimistic. Over the last four years, the sector was able to gain wide experience in facing crises.
With the occurrence of stability, the circumstances will improve.

But there are some hotels that stopped working, which affects Egypt's capacity. Do not you consider that situation a threat to the tourism?
Yes, to close hotels is a great danger, in addition to the laying-off of their trained employees. They are the main partner in the sector's success.
Halting operations of some hotels has a negative impact; however, they halt operations because of the lack of finance needed for the operations to replace, maintain, and develop. Hotels have not had maintenance since four years ago.
I ask all the officials to kindly support the sector, especially in this time.

Is Egypt, under these circumstances, a country that attracts tourism investments?
Yes, in spite of everything, Egypt will remain a country that attracts tourism investments, as beaches and monuments are everywhere.
However, we have to differentiate between hotel investments, as they make revenues for Egypt, and investments related to housing and villas. I do not like to call the latter hotel investments.