Tourism suffers from losses for 6th consecutive year

Aisha Zidane
5 Min Read

Workers in tourism have estimated the losses of the tourism sector resulting from terrorist acts, affecting inbound tourism to Egypt, at tens of billions of Egyptian pounds.

Tourism has been declining since January 2011 and several events, such as the downing of the Russian Metrojet over Sinai in 2015, have stalled its recovery.

Elhamy El-Zayat, former chairman of the Egyptian Federation of Chambers of Tourism, said that there are no accurate calculations of the losses, but they are estimated at tens of billions of pounds, adding that terrorist acts have certainly affected the income from tourism, making the state’s hard currency income decline as well.

“The impact from terrorist acts has become huge lately compared to previous years, because they are now merged with political matters. El-Zayat explained.

He went on to explain that tourism income was estimated at $12.5bn in 2010, and has declined over the years to $6bn; however, the difference in numbers is not considered a calculation of the real losses.

He demanded a base according to which a comparison can take place between the income, losses, and profits in order to better estimate real losses.

Ahmed Balbaa, chairperson of the tourism committee in the Egyptian Businessmen’s Association, said Egypt’s losses during the past six years are estimated at $60bn—at minimum.

He noted that the crisis of the Russian aeroplane crashed in Sinai has eliminated over 80% of inbound tourism due to the gruesomeness of the accident and the lack of proper management of the situation by the Egyptian side.

He requested attributing the management of airports in tourist areas to specialised international companies, and issuing an exceptional law for two years which includes exempting the sector from financial commitments and not taking legal action against the sector. Balbaa said the state should also refrain from collecting fines in order to provide liquidity to the tourism and hotel sector. He added that the state should also train workers and solve the salary crisis.

Abdel Rahman Anwar, head of the Tourism Investors Association for floating hotels, said the Russian aeroplane accident had the largest impact on tourism since 2011, followed by the January 2011 revolution; however, not much else impacted tourism.

He noted that tourism losses since the 25 January revolution range between $8bn and $9bn annually as a minimum, which means that total losses exceed $50bn.

He stressed that the recent terrorist attacks will not have a large impact, because the bombings did not target tourism-related facilities and activities.

Maged Fawzy, head of the Tourism Investors Association in the Red Sea, said that losses of tourism investors exceed $70bn since 2010 with the successive sector crisis, most prominently, the Russian aeroplane accident in Sinai in October 2015. Investors, he added, have been unable to survive the crises, and the aeroplane crash caused the current foreign currency crisis.

He also said that the sector bore EGP 14bn in tax burdens in 2010, which declined to EGP 1bn in 2016.

Fawzy added that the tourism sector is suffering significantly in the current period due to the lack of visitors, and that the crisis has intensified in the aftermath of the crash of the Russian aeroplane in late October 2015.

Head of Taba-Nuweiba Tourism Investors Association, Sami Soliman, said Egypt’s losses due to terrorism operations have not been accurately calculated yet, as they vary between the lives lost, which are the greatest loss, and the material losses.

Soliman said that the region is suffering several crises which jeopardise Egyptian investments of approximately EGP 15bn. The most prominent of these crises are the local banks’ intransigence in saving the hotels from bankruptcy, which led to them suffering losses approaching EGP 500m, and the lack of commitment from insurance companies to compensate the losses resulted from the terrorist operations and floods that the country has faced recently.



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