Red Sea Marvels Help Egypt’s Tourism Set Eyes on Strong Recovery
“How was Egypt? Did you see the Pyramids?” This is the first question any visitor to the Northern African country would normally hear upon arrival at the airport of their respective hometown. Answering “no” would make friends or family members coming to welcome you at the airport frown with a question on their lips. But Egypt is now seeking to add something to its trademark and to conquer new tourist horizons – by going beyond the Pyramids of Giza and the Abu Simbel temples, without neglecting them of course.
Statistics show it actually did this already, albeit somewhat unnoticedly. A stable trend has been taking shape in the past years which shows that only 15 to 20 percent of tourists to Egypt choose Luxor, Aswan or Cairo for cultural and historic sightseeing.
The rest opt for leisure. Which in Egypt means mostly one thing: the Red Sea.
Diving, snorkeling, kite surfing, windsurfing, apart from just lying in the sun – these activities are increasingly turning into a trademark of Egypt’s Red Sea. Resorts like Soma Bay, Sharm El Sheikh and Marsa Alam are still unknown to part of Europeans – and particularly to those in countries like Bulgaria, where holidaymakers prefer Southern Europe if they are to travel abroad. Golf and spa go hand in hand with calm lanes, vast golden beaches and delightful traditional cuisine at Soma Bay and with a cultural hub and a local brewery at El Gouna. Strips of sands rise from colored waters which create their own rainbow spectrum of blue. For those who get tired of so much respite, Luxor is just a few hours away, and a new road is being built to make it even closer. Add to this the nearest coral reef to Europe, just a few kilometers off the Red Sea coast. And choose Nuweiba, a coastal town on the Gulf of Aqaba, for an "off-the-grid" experience with stunning landscapes and and escape from modern civilization.
For the Egyptian authorities seeking to enhance visibility of its resorts, doing this was until recently an uphill battle; and to some extent it still is.
Challenges facing the government in Cairo now include bringing tourists back after the year of turmoil that followed the overthrow of Hosni Mubarak during the Arab Spring of 2011 and, two years later, the June 2013 Revolution which resulted in Muslim Brotherhood-affiliated Mohammed Morsi being deposed. Regardless of how one may choose to call the developments of this period, one thing is certain: the post-Revolution era is studded with many obstacles for the tourist industry.
“Before the Revolution we were doing quite well,” Mr Khaled Ramy, Egypt’s Minister of Tourism, tells a group of Bulgarian journalists invited by his institution to have a look at the environment for themselves. “In 2010 we received 14.7 million tourists from around the world. Last year we had 9.9 million. If we can reach the numbers of 2010, it will be great.”
Not only great, but even indispensable: putting tourism back on track is a top priority as the country is going through dire straits, being one of Egypt’s main providers of foreign currency andcontributing to GDP by 11.3%. It also added some USD 7.7 B to the budget last year, though government projections are much more ambitious – USD 26 B in revenues by 2020. This will require incentives to boost both the flow of tourists and the average spending of a visitor per night – USD 75 now, against USD 86 in 2010. Inevitably, the 2010-2013 turmoil in Egypt had its toll, but that didn’t bring businesses down. Due to the decision of investors from both Egypt and other Arab countries to continue working here, there were 154 000 hotel rooms under construction as of June this year, most of them in the areas of Hurghada and Sharm El Sheikh. Combined with the 189 000 rooms in service, Egypt’s hotels will be able to accommodate 34 million tourists. Though these can’t be fully booked, authorities are set on the target of 20 million by that time.
“Of course the revenues went down. But everyone has great confidence in the tourism sector in Egypt.”
Confidence is already starting to bear fruit: there have been about 7% more in revenues from tourism in the first quarter of this year compared to Q1 of 2014. Currently it is mainly Egyptians who dominate the investment landscape, followed by Arab companies from countries such as the United Arab Emirates. Egyptian companies of national importance like Orascom Development Holding and the Egyptian General Company for Tourism and Hotels have returned to profit. Mr Ramy says a big Southeast Asian fund will soon look into options for buying 45 hotels in the country. At Soma Bay, US hotel and leisure company Starwood Hotels and Resorts Worldwide is entering the Red Sea by taking over the management of the first Westin hotel there after agreeing with Cascades Hotel Company Soma Bay to convert the a hotel at the emerging resort starting this July.
So much for investors. The question remains: how is trust of tourists won and cemented here, given the numerous attempts at destabilizing the state through numerous attacks that Egypt has witnessed in the aftermath of the 2013 Revolution?
Early in June, two police officers were shot near the Pyramids of Giza, and yet no tourist was hurt. On our trip to Luxor – a very brief one since our interest was concentrated on the Red Sea at the time – another attack occurred at the Karnak Temple, near from the Valley of the Kings we were visiting at the moment.
Time and again, Egypt’s answer to every assault is resilient, confirming what Mr Ramy told us during our meeting two days earlier – and what we, as journalists, back then might have not believed outright:
“It's as safe as anywhere else… You can see for yourself how much security we have, and there is also security you cannot see…. The presence of security is still storng in our resorts, and everything possible.”To avoid taking this out of context this was said in reference to Hurghada – but it seems to fit elsewhere as well. Wherever we moved, in and out of Hurghada, on the 4-hour-long journey to Luxor from Soma Bay where we stayed during our Red Sea trip, there were checkpoints along the roads into an out of locations where many tourists are staying. Beefed up measures might have played their role in Egypt’s move up the chart of the 2015 Global Peace Index after it sank sharply within just several years.
Security has to go hand in hand with the right promotion abroad. Seventeen companies are running in a tender as the government is pitching for a new advertising agency, hoping to seal a contract in August, to start buying media time and space in September or October and to have a fully-fledged campaign in the next few months. In the three years that will follow, an advertising campaign will be up and running in as many as 27 markets around the world.
The profile of potential visitors Cairo is willing to draw has emerged more clearly as tourism is picking up again. “We see much more 55+, much more young couples, and of course the families,” Mr Ramy explains, making clear Egypt is now aware how to handle challenges in the tourist sector unlike in the past few years.
A nearly tectonic shift in the importance of certain markets for the country’s tourism industry has helped officials make a somewhat blurry profile picture clearer. For many years until 2005-2006, Germany and the UK were on the lead, constituting the vast share of visitors with close to a million from each country. In 2010, the best pre-crisis year, 220 flights were coming every week from Britain alone. Along with Russia, the three countries accounted over the years for between a quarter and 50% of all tourists. Segments like historical tourism are still dominated by Western visitors – though markets like China are also important there with three charter flights to Aswan per week . “I think the German market will dominate the Nile in the winter of 2015/2016,” Mr Ramy says. It is Russians, however, where a small miracle is witnessed and an ever-larger one is expected. Even though their numbers tripled in a decade, the potential of their market is yet to be explored. Each Russian tour operator owns an airline, and this gives substantial air capacity. Authorities in Cairo hope to draw some 4.5 million Russian guests to the country by 2020, up from the two million who visited last year. Even the falling rouble failed to trigger a substantial withdrawal, with a drop of only 13% in the first quarter and with the trend reversing back to normal two-and-a-half months into the next one.
The Red Sea city of Hurghada, the starting point to reach either historic sites like Luxor or resorts like El Gouna and Soma Bay and the Red Sea’s third-biggest city, is like a schoolbook example of how tourist flow from Russia is growing into an increased presence of Russian citizens (some of them later becoming Egyptian citizens or at least residents) on the market. Out of 337 000 people living within the boundaries of the Red Sea Governorate, between 50 000 and 60 000 are now Russians who chose to live here on a permanent basis. In Hurghada, many shops have their signs in Russian first, with big-size letters above the door and then smaller ones in English, Arabic or both. Egypt’s tourism agency turned out persuasive enough to talk Russian tour operators into maintaining – at least in part – pre-crisis numbers of flights. As a result, many Russians went on visiting Egypt, and some who had first come as tourists set on a permanent basis, either investing in buying hotels or renting them on a long-term basis. “Russians are like Egyptians to us in Hurghada,” a local guide says, half-joking, half-serious. But ocean of Cyrillic letters glowing in the warm Red Sea night speak for themselves.
All this said, creating favourable conditions for construction is not an end in itself as it takes many steps for an entrepreneur to receive the green light to set up a hotel. Headed by Mr Ramy, the Tourism Development Authority, the state-owned agency that sells land for tourism outside the city boundaries, has to make sure that all the respective analyses of the environmental impact and economic viability have to be carried out and handed to it prior to allowing any construction. Separately, a “green” department at the ministry has to make sure that energy efficiency norms have been observed and that as much renewable energy as possible is used. Some USD 0.14 B are being put into planting grass where only sand can be found – and both Soma Bay and the area of Marsa Alam, a town that only recently has started to become popular with Red Sea tourists, are just two random examples. The idea is to use as much as possible green energy, renewable energy, and to take as little is possible electricity from generators or from the grid.
The focus on leisure and nature doesn’t leave out historic sightseeing as even the Giza Pyramids are being “refurbished”. Just 2 km away, a Grand Egyptian Museum is being built to host the countless ancient Egyptian artifacts and form a new tourist compound together with the Pyramids themselves. Most of the concrete construction is already finished, and after several delays the new museum, to which much from the current Egyptian Museum near Tahrir Square in downtown Cairo will be moved, is scheduled to be open partly by the end of 2018 and fully by 2020. A product called The Trail to the Holy Family is still witnessing improvements as visitors from all around the world wish to explore the sites in Sinai, on the Nile Delta, and where Cairo stands nowadays through which Joseph, Mary, and the young Jesus passed after their flight to Egypt just after Jesus was born. Much promotion is given to Coptic Cairo and the Abu Serga church, where the three are thought to have lived for some time. Just minutes’ walk from there are two temples that are said to be the oldest mosque and the oldest synagogue in Egypt. A visit to Cairo, Luxor and Aswan done by a floating hotel allows one to visit all the sites without leaving their room. Visitors staying in Hurghada also have the option of buying an excursion to Luxor, which will be easier to reach in the next few months as a new road is opening to cut the distance short from 4 to two-and-a-half hours.
But thrilling as it might be, cultural sightseeing is now only one of the paths a foreign visitor to Egypt can tread as the country is diversifying.
In the second part, due later this week on Novinite, we’ll take a look at how exactly this is happening along the Red Sea.
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