EXECUTIVE SUMMARY
Surviving the post-revolution era
The 2011 revolution which resulted in the toppling of the country’s
40 year dictatorship led by Hosni Mubarak had a significant impact on
Egypt’s tourism industry throughout the year. Visitor numbers declined
by some 37% to reach close to 9 million compared to over 14 million in
2010. This has had a direct impact on all other areas, from travel
accommodation to car rental, air transportation, health and wellness and
tourist attractions, with value growth rates across the board declining
to double digit territory. Operators introduced heavy discounts in
order to lure tourists back and prices remained low at the beginning of
2012. As unrest continues in Egypt, with violence erupting again at the
end of 2011, and as the country enters a transitional phase, the
post-revolution era is likely to result in slow growth and a gradual
return to pre-crisis levels.
Outbound tourism fares better
While inbound tourism numbers have fallen strongly, outbound tourism
from Egypt has fared much better, with the number of foreign trips
falling by just 13% in 2011. This has helped many travel agencies to
survive, with those that specialise in outbound tours faring better than
others. Outbound demand was particularly high during the Hajj season,
with the number of trips to Saudi Arabia peaking during this time. In
addition, many wealthy Egyptians were eager to leave the country during
and after the unrest also helped the travel retail and transportation
sectors. However, inbound tourism remains by far the most important part
of Egypt’s tourism industry and the country’s overall economy.
Domestic tourism opportunities
Domestic tourism was also affected in 2011, with operators,
especially hotels and other travel accommodation providers, struggling
to maintain occupancy rates during the crisis. Such operators introduced
very low prices which are now even affordable for domestic consumers
who would not otherwise be able to stay in four and five star hotels.
Hotels have therefore increased their focus on attracting domestic
tourists in addition to tourists from traditional source markets such as
Russia, the UK and France. However, domestic tourists are low spenders
and may tighten their belts during the transitional period and in
response to the economic problems in Europe, which may also end up
impacting the Egyptian economy.
Looking ahead: The new Egypt
One of the key considerations for Egypt going forward is to
reposition the country in order to appeal to a new tourist base. For
example, Egypt is now considered a “hero” and success story of the Arab
Spring. As a result, industry players are focussing on luring tourists
back to the country by leveraging the country’s history and heritage. In
addition, landmarks of the recent revolution such as Tahrir Square are
becoming increasingly appealing to tourists and are being marketed as
tourist attractions in the post-revolution era.
Youth groups and adventure tourism
One key area for inbound and outbound travel growth and which is
likely to shape the future of the tourism industry in Egypt is adventure
tourism. On the one hand, the country is home to a very large youth
population, which is demanding more adventure tourism opportunities and
packages. In addition, many parents are sending their children to sports
camps outside the country. Furthermore, trekking and other types of
adventure tourism are also increasingly in demand. On the other hand,
the country itself is a notable adventure tourism destination as there
are opportunities for desert safaris, diving trips and other active
holidays targeting younger generations.
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