Egypt wants to increase its visitor numbers by between 25 per cent and 30 per cent annually as it pushes to hit 30 million tourists by 2028, Minister of Tourism and Antiquities Ahmed Issa said.
The new strategy to revitalise the tourism sector — battered by the Covid-19 pandemic and the fallout of the Russia-Ukraine war — includes more than doubling the number of hotel rooms, increasing the number of plane seats, investing in promotion and improving the overall visitor experience.
“We need just 300,000 rooms, $30 billion of investments in rooms and probably similar amounts of investments in customer experiences. Spread the word — and it is a great industry to invest in,” said Mr Issa at a talk at the American Chamber of Commerce in Egypt on Monday.
Egypt’s tourism numbers dropped to 3.7 million in 2020, from about 13 million in 2019, before slightly recovering to eight million in 2021, according to the country’s statistics agency Capmas.
While full-year figures for 2022 are not available, five million tourists visited Egypt in the first half of the year.
The country’s revenue from the tourism sector, an important source of foreign currency, decreased to $4 billion in 2020, from about $13 billion in 2019, before hitting $9 billion in 2021.
Tourism is even more vital as Egypt struggles with an economic crisis triggered by Russia’s invasion of Ukraine about a year ago. In addition to lost tourism receipts, the war has led to a large capital outflow, a higher food import bill and soaring inflation.
As a condition for a $3 billion loan from the International Monetary Fund, the country has committed to a permanent shift to a flexible exchange rate, letting the Egyptian pound halve in value against the US dollar over the past year.
Mr Issa, who was appointed in August in a cabinet reshuffle, said he sees an opportunity for tourism growth led by the private sector, despite economic challenges.
In contrast to his predecessor Khaled El Enany, who came from an Egyptology and academic background, Mr Issa spent about 25 years at Egyptian lender Commercial International Bank. He held key roles such as chief financial officer and chief executive of retail banking.
“I have built a career on problem-solving,” Mr Issa said. “I usually ask myself: is it a problem of supply or is it a problem of demand?”
Egypt has 2,000 archaeological sites and six Unesco world heritage sites, including such top attractions as the Pyramids of Giza, the Valley of the Kings in Luxor and the temples of Aswan. It also features coastal destinations on both the Red Sea and the Mediterranean.
Despite all of this, the country “has only been getting less than 1 per cent of the total tourism in the world”, he said.
In 2019, there were more than 1.4 billion tourists globally, half of which went to Europe.
A couple of surveys in the past few months have pointed to optimism for the future of Egypt’s tourism, Mr Issa said.
More than 74 per cent of industry experts expect to see improved performance in 2023, according to a survey in September from the government’s Information and Decision Support Centre.
Another survey by Egyptian newspaper Al Mal showed an 11 per cent annual improvement in the tourism industry’s business sentiment in December. Six in 10 expect their total revenue to increase in 2023.
“Overall, I can report that the state of the industry is on the right path,” he said.
However, the question remains why Egypt is not attracting the number of tourists that it should.
A study led by Mr El Enany found that 55 per cent of global tourists would be interested in coming to Egypt, showing that “it is not a problem with demand”, Mr Issa said.
One of the issues is not having enough plane seats coming in to the country. There were only 5,000 seats arriving from Russia during the last week of July, compared to 30,000 seats in the last week of December. Accordingly, the number of weekly arrivals from Russia grew by 5.5 times.
Mr Issa said there is also a need to increase budget airline seats, in particular, which only account for one in seven of Egypt’s total.
“Countries with more than 30 million tourists all have a higher percentage of low-cost carriers arriving in their countries to be able to achieve that number,” he said.
A second issue is hotel capacity, with about 210,000 rooms currently available in Egypt.
“We simply haven’t built enough hotel rooms in Egypt over the past few years,” Mr Issa said.
“Countries that serve 30 million to 40 million tourists have about half a million rooms or so, so we need to build 300,000 more rooms.”
The rooms are also not well distributed, with only about 15,000 floating hotel rooms and 7,000 on the ground in the key tourist destinations of Luxor and Aswan.
The plan is to start with adding 25,000 to 30,000 rooms this year and grow the ministry’s investment in promotion by 50 per cent, Mr Issa said.
In parallel, the ministry will be working with government and private sector partners to improve the overall customer experience at tourist sites and create value propositions for independent travellers.
“The product today is not ready and it is going to take us years to be able to build it,” he said.
As part of the ministry’s digital transformation, 78 nationalities can now receive an electronic visa while 20 will be added in the coming few weeks, Mr Issa said.
About 180 nationalities can receive a visa on arrival, provided they have a visa on their passports for the UK, US, Canada, Japan, New Zealand, or Schengen countries.
In December, 1.7 million e-tickets out of 2 million visitors were issued at the country’s archaeological sites and museums.
The ministry will be measuring its performance in improving the visitor experience over the coming two to three years, he said.
“We are going to ensure that [tourism] in Egypt continues to grow by 25 per cent to 30 per cent per annum over the coming five years until we reach 30 million tourists by 2028, maximum by 2030, God willing.”