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Egypt tourism revenues down in Q3 of 2009 - Daily News Egypt

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Egypt tourism revenues down in Q3 of 2009

CAIRO: Tourism revenue has decreased significantly in the first four months of 2009 compared to a year ago, as the financial crisis continues to impact revenue sources in Egypt dependent on the global economy. According to figures compiled by Reuters, tourism receipts in the third quarter of fiscal year 2008/2009 totaled $2.19 billion. This represents …


CAIRO: Tourism revenue has decreased significantly in the first four months of 2009 compared to a year ago, as the financial crisis continues to impact revenue sources in Egypt dependent on the global economy.

According to figures compiled by Reuters, tourism receipts in the third quarter of fiscal year 2008/2009 totaled $2.19 billion. This represents a 17.3 percent decline from the previous year’s figure of $2.64 billion.

However, these figures were disputed by Omayma El-Huseini, the Ministry of Tourism’s spokesperson.

“I don’t know where these figures came from, this is not true at all, she said.

El-Huseini asserted that during the January to March period, tourism revenue decreased by 11 percent, not 17.3 percent. She also said that the number of tourists decreased by 9.3 percent.

Reuters had previously reported in May that tourism revenue in Egypt fell during the first four months of 2009 by 13.2 percent compared to 2008. The number of tourist arrivals during this period also declined by 10.3 percent.

Despite the disputed figures, it is clear that the financial crisis has negatively impacted tourism, a vital component of the Egyptian economy. In 2008 tourism receipts totaled $11 billion, accounting for 11.1 of the gross domestic product.

The sector employs about 12.6 percent of the Egyptian workforce.

According to Magdy Sobhy, an economics analyst at the Al-Ahram Center for Strategic Studies, the fall in tourism may have serious repercussions for the Egyptian economy as a whole.

Sobhy explained that tourism is the main source of hard currency in Egypt, and the fall in tourism has already impacted the exchange rate of the Egyptian pound.

“If the fall in tourism continues, he said, “the government will further devalue the Egyptian pound. If you devalue the Egyptian pound, then imports will be higher in prices, and exports will not rise enough to match the higher price of imports.

This, Sobhy explained, is why he expects Egypt’s current account to be negative this year.

Sobhy also pointed to the impact of tourism on other sectors of the economy. “Tourism is dependent on other sectors to deliver services and commodities, he said. “If there is a decline in tourism than you will have unemployment in other sectors.

Before the economic crisis began, officials outlined ambitious plans to increase tourism in Egypt. In April 2008, Minister of Tourism Zoheir Garannah proposed a plan to increase tourism revenue to $12 billion by 2011.

Since the global downturn, however, Egyptian officials have had to focus on preventing loses in tourism revenue. The Ministry of Tourism began to anticipate the fall in tourism in November 2008 and has implemented measures to lure tourists to Egypt, El-Huseini said.

According to El-Huseini, 70 percent of tourism in Egypt is beach tourism, with a majority of visitors coming from Eastern Europe and Russia. Egypt has implemented an extensive marketing campaign in these countries.

El-Huseini also pointed to an increase in “added-value packages from Egyptian hotels, however noted that hotel promotions fall outside the responsibility of the Ministry of Tourism.

Reuters also reported on Jan. 4 that the Ministry of Tourism has decided to exempt hotels from paying tourism promotion fees to the government. The ministry also reduced fees for charter flights as well as landing and takeoff fees for commercial flights.

Along with the fall in tourism revenue, other areas of the Egyptian economy have been negatively impacted by the financial crisis.

Suez Canal revenues have plummeted in the first five months of 2009. From January to April, canal receipts were 20 to 25 percent lower than in 2008. Reuters reported that canal revenue in May 2009 was $342.4 million, a decrease of 29 percent from the May 2008 figure of $479.4 million.

The fall in canal revenue is primarily due to decreased demand for consumer goods, which has resulted in less shipping traffic. Furthermore, piracy off the coast of Somalia has encouraged some shipping companies to change routes avoiding the Horn of Africa.

Natural gas exports have also suffered. According to figures published by the Information and Decision Support Center (IDSC), export revenues declined by 38.5 percent in May from the 2008 figure, from $382 million to $235 million.

It was reported, however, that remittances from Egyptians working abroad were $2.3 billion in the first quarter of the 2009, an increase of $335 million from the same period last year.

However, economic analyst Magdy Sobhy questioned the data showing an increase in remittances.

“Some feel that this increase reflects that people just returned to Egypt after losing their jobs abroad, he said, and cautioned that it was too early to tell if remittances would continue at this level.

Topics: FJP

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https://www.dailynewsegypt.com/2009/06/18/egypt-tourism-revenues-down-in-q3-of-2009/
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