Tourism needs support based on clear plan from state: Balbaa

Abdel Razek Al-Shuwekhi
5 Min Read

Ahmed Balbaa, chairperson of the Tourism Committee of the Businessmen’s Association, said that the tourism sector needs real support from the state based on a clear plan for a period no less than three years with the help of all government agencies.

In an interview with Daily News Egypt, Balbaa said that the real inbound tourism in 2016 was at most 3.5 million tourists, not 5.3 million as advertised.

How do you see the flow of tourists in the past year?

Last year saw the least inbound tourism to Egypt. We should not refer to the people fleeing their countries and coming to Egypt to avoid turmoil as tourists.

On the ground, the real number of tourists was 3.5 million at most, not 5.3 million as the Ministry of Tourism claims.

This means that inbound tourism in 2016 was the least in 20 years. This was the result of suspended Russian flights since October 2015, along with the travel ban imposed by Britain on flying to Sharm El-Sheikh.

English and Russian tourism are the two major markets for the Egyptian tourism sector. The suspension of their traffic recently caused the drop in the number of tourists.

But there has been some improvement over the past three months. What is your forecast for 2017?

Yes, there is some improvement in tourism inflow, especially from Germany, which I expect to register a growth of 30%, boosting the number of German tourists to 1 million up from 655,000 in 2016.

The rest of the major markets still have travel bans to Egypt, including Russian, British, and Italian.

If travel bans are lifted, inflow from Russia and Britain will be a huge benefit for Egypt, especially as we still offer relatively cheaper tourism.

What is your opinion about raising visa fees from $25 to $60 in July?

We thought that the state will waive all visa fees in light of the current circumstances.

We have to know that other competitors, such as Turkey and Tunisia, allow the entry of foreigners into its territory without a visa—especially the Russians.

The tourism sector has many financial burdens that the state should re-examine. The value-added tax (VAT), the visa fees, and the real estate tax are all making matters worse.

The government must develop a strategy to support the sector until it fully recovers. This will take, at the very least, three years. We have reached a very difficult stage after six years of suffering.

But the Central Bank of Egypt (CBE) launched an initiative allocating EGP 5bn to support the renewal and renovation of hotels and tourism facilities. How is this reflecting on the sector?

The initiative is good, but when we went to the banks seeking loans, we were told they did not have any directives in that regard.

According to the CBE, banks are supposed to finance 75% of the cost of renovation, while companies will secure the remaining 25%.

Egyptian tourism is a strong sector that is labour-intensive. What that means is that the tourism can boost economic growth in general, especially through securing foreign currency.

We called upon the government to provide us with incentives and clear growth plans, like the ones provided to other sectors.

There have been recent complaints about price-based selling. What is the solution to that problem?

The Minister of Tourism has to present a draft law to the parliament to solve this problem. The operational costs alone increased recently by over 40%.

Under these rising costs, it is not reasonable that you find rooms in the Red Sea area booked at $20 and $23 in Sharm El-Sheikh.

We must not claim that the free economy allows hotels to set their prices. The price-based selling is very negative. It waists assets and the state also loses revenues or taxes and fees. This practice also weakens the quality of Egyptian products against their counterparts.

The tourism sector is going through a real crisis, and must not stand by idly.

The problem is caused by a known reason: travel bans. We have to work to improve through solving the main problem, not by reducing our prices.

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