Positive tourism numbers likely to drop in 2009

Manar Ammar
4 Min Read

CAIRO: Egypt received 12.8 million tourists in 2008, with a 15.3 percent increase in tourist arrivals, said Tourism Minister Zoheir Garranah at a press conference Monday.

Over the year, the industry grew at a rate of 25 percent until the global economic crisis hit in September. Since then, tourism numbers began dropping in the last four months of 2008.

The global tourism sector grew by only 2 percent.

In fiscal year 2008, tourism contributed around 7 percent to Egypt’s GDP with revenues rising 16 percent to reach $11 billion.

Despite the growth, the minister said there will be layoffs within the tourism sector in the coming period, with forecasts of a sharp drop in tourism numbers.

According to CI Capital Research, tourism will witness depressed growth “despite the 11 percent growth in tourism revenues over the first quarter of 2008/09.

“We maintain our estimates for a depressed growth of around 2.7 percent in fiscal year 2008/09.due to the global liquidity squeeze that will affect tourism spending but also due to the political instability in the region nowadays with the severe Israeli attack on Gaza at the border of Sinai, the firm said.

To deal with the ailing international economy, Garranah said Egypt will implement a crisis plan in 2009. “It is a tsunami that we must handle carefully.no one will know the real consequences, Garranah said.

Instead of reducing prices, the plan will rely on adding value to tourists’ visit by offering more free nights or enhancing tour packages. The strategy will also entail a more vigorous marketing strategy abroad in collaboration with travel agencies. Charter flights will see reduced taxes in order to increase the number of planes coming into the country.

A number of personalized services will also be introduced to familiarize potential visitors with Egypt’s culture and history.

Other countries dealing with the crisis are cutting back on advertisements and laying off a large number of employees, Garranah said. However, while “Egypt will increase advertisement money, layoffs will be inevitable.

It will be “survival of the fittest, Garranah said.

Asked how the rise in the number of traffic accidents will affect the vital sector, Garranah called it a “tragic issue, adding that the ministry is building a center that will provide mandatory safety training to all bus drivers. The center is set to be inaugurated in 18 months.

Approximately 6,000 people die in road accidents in Egypt annually as a result of speeding and poor road conditions.

Around 10 Russian tourists were killed in a road accident near Sharm El-Sheikh in December. Russia comes as the number one country with visitors to Egypt.

As a whole, the sector contributes around 20 percent to the total foreign currency flow, the minister said.

Minister of Trade and Industry Rachid Mohamed Rachid said Monday Egypt has trimmed its forecast for economic growth to below an annualized 5.2 percent in the first six months of 2009.

According to local reports, the minister said growth would fall below “previous expectations of 5.2 percent due to “sudden variables, adding, “there is no escape from this crushing financial crisis. -Additional reporting by Amira Salah-Ahmed and agencies.

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