How Egypt’s tourism businesses are bouncing back

There is light at the end of the Covid tunnel as the country resumes flights and removes hotel capacity restrictions

On a recent Saturday at the Pyramids of Giza, the area was buzzing with something that had not been seen in more than a year: buses filled with tourists.

Travel restrictions and lockdowns because of the Covid-19 pandemic wiped out $17.6 billion from Egypt’s economy last year, including 844,000 travel and tourism jobs, according to the World Travel and Tourism Council.

The country's foreign tourist arrivals dropped 72 per cent and international tourism receipts dropped 66 per cent last year, according to the UN World Tourism Organisation. While Egypt hosted 13 million tourists in 2019, that number shrivelled to 3.6 million in 2020.

The travel and tourism industry accounted for about 12 per cent of Egypt's gross domestic product pre-Covid. The sector’s contribution to the economy fell to $14.4bn in 2020 from $32bn in 2019, according to the WTCC.

But now there are green shoots that the Arab world's third-largest economy is turning a page and its tourism industry is on the mend.

Quote
We are expecting a good flow of business in this winter season and onwards
Alaa Akel, chairman of the Egyptian Red Sea Hotels Association

Hotels are gradually seeing their performance improve after a period of slow business when tourist activity ground to a halt in March 2020.

Occupancy rates have climbed steadily since May 2020, when hotels opened at 25 per cent capacity, up to last month when they were allowed to return to full capacity.

That rebound has been spurred by the resumption of Russian flights to Red Sea resort cities in August after a six-year hiatus, Egypt’s removal from the UK’s red travel list in September and the increased vaccination of tourism workers and tourists.

“After a long time of people staying home, they have the appetite to travel. So we are expecting a good flow of business in this winter season and onwards,” Alaa Akel, chairman of the Egyptian Red Sea Hotels Association and chief executive of the Jaz Hotel Group, tells The National.

The number of tourists has been increasing steadily since January and the country received 3.5 million visitors in the first half of this year, according to the Ministry of Tourism and Antiquities.

Tourism and Antiquities Minister Khaled El Anany has said he is optimistic about the rest of the year and expects numbers to return to pre-Covid levels by the end of 2022.

The return of the Russian market, which brought in the highest number of international visitors to Egypt before 2015, is a boon to the country's tourism industry. Flights had been halted for six years after a Russian airliner carrying 224 passengers and crew crashed in Egypt's Sinai peninsula.

“Since the reconciliation with the Russian market, it didn’t make sense to keep the occupancy at 70 per cent from the hotel inventory,” Mr Akel says.

With Covid precautions in place and the vaccination of all employees working in the hotel sector, the government was encouraged to allow full capacity, he points out.

It has not been easy for small and medium enterprises, which make up most tourism businesses globally, to stay afloat during the crisis.

Egypt’s central bank introduced a 50bn pound ($3.2bn) package at the start of the pandemic to support the tourism industry.

Over the summer, the German non-profit organisation enpact and the TUI Care Foundation selected 50 businesses in Egypt for a six-month tourism recovery programme.

The programme, which runs until January and is supported by the German government, includes €9,000 ($10,400) of direct financial support, as well as mentoring and training.

Among the recipients are mountaineer Omar Samra’s Wild Guanabana, an adventure travel company founded in 2009. The business started by offering walking and climbing experiences in Egypt, Nepal, Peru and Tanzania, and has expanded to more than 25 countries.

“We were severely impacted [by the pandemic],” says Mr Samra. “We’ve obviously endured lots of crises from revolution to terrorist attacks to Ebola to all kinds of things, but we’ve never had a crisis that basically impacted everything all at once.”

Wild Guanabana suspended all trips until November 2020, when they offered a local trip in the mountains near Hurghada on the Red Sea. By the end of 2020, the tour business was down 90 per cent and a new line of consulting work only made up for 30 to 40 per cent.

The company did not bring back international trips, such as Kilimanjaro in Tanzania and Mount Elbrus in Russia, until May of this year.

“Lots of businesses, including ourselves, contemplated closure,” Mr Samra says.

The recovery programme has given him a lifeline to hire back some of the employees he had to let go; the team had gone down from 15 people to five.

Mr Samra says the company is also focusing on niches within the local segment until international travel is back to normal.

Another entrepreneur in the recovery programme is Amr Mashaly. He had a tourism company based in London, offering sustainable and unique travel experiences in Columbia, Kenya, Mexico and Thailand.

After the pandemic hit, he decided to shut down the business and return to Egypt where he offered local travel experiences. In October 2020, Mr Mashaly started an online portal Adventure G with an initial focus on the Red Sea town of El Gouna and Fayoum, a city in an oasis 100 kilometres south-west of Cairo.

“Travellers are going to be looking for more local experiences. Even if they’re going to be able to travel internationally, the behavioural change has happened already,” Mr Mashaly says.

The relaxation of travel restrictions has also helped business. Since Egypt was removed from the UK’s red list, Adventure G will be hosting a group from the University of London in January in Cairo, Fayoum, Luxor and Aswan.

“Egypt is very open right now … this makes our life way easier,” Mr Mashaly says.

Hawa Safaga, a kitesurfing and windsurfing station in the Red Sea's Soma Bay, relies heavily on international tourists.

German-Egyptian Julie Nassr, who runs the business with her husband Ramy Sabry, says 65 per cent of their customers are German, 20 per cent French and the rest a mix of nationalities.

“We had planned to open another station and make further investment and then the pandemic came and we shut down completely for four months,” says Ms Nassr.

They struggled financially and had to rely on donations to upgrade their kitesurfing equipment. Usually the company charters boats and hires seasonal workers, but cut those costs once business was dramatically reduced.

The financial support from the recovery programme allowed Hawa Safaga to take a risk by chartering a boat for the month of October.

Owing to high vaccination rates in source countries, including France, Germany and Switzerland, and easier travel regulations, business in October “was almost as good as before the pandemic”, Ms Nassr says.

Hawa Safaga’s Facebook page declared last month: “Soma Bay is full of kites! Most hotels and stations are fully booked, including us. Tourism is back”.

Updated: November 8th 2021, 10:19 AM
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