The Egyptian tourism sector is poised to experience a rebound, despite challenges, leading to a more positive outlook in the near to medium terms, according to Oxford Business Group (OBG)’s Egypt economic update issued on Monday.
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OBG associated the recovery to the recent uptick in foreign arrivals, as well as the expected boost from the resumption of direct flights to and from Russia, one of Egypt’s major sources of international visitors.
Egypt Air and the Russian Aeroflot announced, in March, that flights between Moscow and Cairo would recommence on 12 and 11 April respectively. The resumption will end the two and a half years of flight suspensions between the two countries following the downing of a Russian Metrojet plane over the Sinai Peninsula in October 2015.
Egypt witnessed a significant drop in tourist arrivals following the downing of the Russian plane, already in decline after the 2011 revolution. Consequently, the number of tourist arrivals dropped from 14.7 million people in 2010 to 5.4 million by 2016, with annual revenue falling from $12.5bn to $3.8bn.
One of the main drivers behind the decline in tourist arrivals, was the drop in Russian tourists, whose share of foreign arrivals fell from 68% in 2015 to 13% by mid-2016.
According to the OBG report, the positive outlook for Egypt’s tourism sector is backed by the increase in visitors by 54% in 2017 to 8.3 million, while tourism receipts more than doubled to $7.6bn. Group travel jumped 66.5%, indicating resurgent interest from package tour operators, and the January-February period saw a 39% year-over-year increase in the number of tourists from the UK—another traditional source of arrivals.
OBG believes that the Egyptian authorities’ efforts to improve the domestic security situation was one of the drivers behind the stronger arrival numbers, in addition to the currency flotation, as the value of the Egyptian pound has halved, making Egypt a more affordable travel destination.
Furthermore, the positive trend is expected to continue into 2018, according to Hamed El-Chiaty, chairperson of local travel company Travco, who forecasts 2018 arrivals will increase by a further 40-50% to reach roughly 12 million. He pegged this to the rise in visitors from traditional partners such as the UK and Ukraine, along with new markets in Eastern Europe.
Additionally, OBG’s report indicates that the diversification of Egypt’s source markets aims to reestablish the sector as one of the main drivers of the economy and end its reliance on one nation.
To this end, a three-month tourism promotional strategy has been prepared to air on the National Geographic channel in April. The campaign will focus on the UK, Germany, Poland, the Czech Republic, Belgium, and countries throughout the Middle East, and will consist of videos featuring information about Egypt’s tourism industry and holiday attractions.
Moreover, the Tourism Development Authority (TDA) is undertaking a campaign, running from February to April, to promote the country in the Spanish market. It includes the promotion of specific attractions, such as hosting Christian pilgrims at the Egyptian Orthodox Church.
The Ministry of Tourism will issue a tender for August’s tourism promotion, when its existing contract with US-based consultancy J Walter Thompson expiries. The move aims to reflect developments in the global tourism market and Egypt’s overall economic strategy, according to Minister of Tourism Rania Al-Mashat.