A year after the Luxor attack: what is the situation of the tourism sector?

In 1996 and 1997, the number of tourists in Egypt ranged between 3 and 3,5 million per year. A figure that does not satisfy the Ministry of Tourism and workers in this sector, who had a hope that this number reaches the 5 million tourists in 1998.

However, the terrorist attack which took place in Tahrir Square In Cairo, the one happened in Luxor, took away all hope and sharply hit the tourism industry: The occupancy rate of hotel rooms has dropped to 0%. This resulted in the closure of many tourist enterprises for periods ranging between 6 and 8 months and dismissal of staff.

The marketing experts mission was to revitalize this sector which is facing a critical situation. But the task is not easy because of the anti-Egypt propaganda that served the other neighboring competitor countries.

One year after the terrorist attacks and after many efforts, such as organizing the festival of tourism and shopping last summer and increasing the Egyptian participation in the international tourism fairs, life began to return in this sector with "modest" rates. But these rates give hope that the situation will be improved on the short run, especially if the state remains vigilant in order to achieve greater stability and security.

An official source in the Authority of Tourism Promotion said that the improvement achieved in recent months was a great success compared to the situation just after the attack in Luxor in November 1997. But Fakhri Azab, an expert in tourism and CEO of the company "Hayatt Tours of America", had nothing to say but a smile when he heard that word. He stressed that it reflects a "surreal optimism".

Azab said that the "great success" has not been reached yet. "Without doubt, the occupancy rate in hotels and tourist villages has been improved in recent months compared to the situation in the months following the attack in Luxor, where the occupancy rate was zero or almost", he said. "But it is impossible that the occupancy rates reached 100% or close to it. If some tourist villages and hotels have seen occupancy achieve this rate, it would be to the low prices. So this situation cannot be regarded as success".

According to Azab, the current occupancy rate is estimated to 28%. He believes that Christmas, New Year, Ramadan and Eid al-Fitr will push the rate up to 60%.

Azab denounces individual or collective decisions to reduce the prices of tourist groups. He is convinced that these decisions have brought a new type of tourist characterized by the limited income and low expenditure. "The journey of this type of tourists is based on their vulnerable budget: They do not eat in restaurants, do not use taxis and do not buy souvenirs", he says.

Azab added that Egypt has won nothing from this strategy. These low prices do not cover the real cost of travel. "To cover these costs, some hotels and resorts behaved in a way that harms the reputation of Egypt in tourism. These behaviors are similar to a stealing. They try to impose on tourists additional costs such as entry fees for sightseeing or transportation, where the contracts say that the price of the trip includes flights, transportation, accommodation and tours", he says.

According to Azab, some tour operators bring tourist groups at a loss and realize gains through the "shops", while other companies do not pay wages to tour guides and let them reach from the owners of the shops a percentage on purchases made by the tourist group that they accompany.

He gives the example of cruises that stop in Alexandria or Port Said. Tourist companies sell quick visits to some tourist sites like the pyramids and the citadel at only 20 dollars per person, while the real cost of such a trip is between 30 and 35 dollars. This method of work is pushing the guide to tell tourists "it's the pyramid of Cheops, this is one belongs to Chephren, and this to Mykerinos ... And let's go to the bazaars..The explications made by the guide became similar to stories told to children before they go to sleep", he mocks.

For Azab, this is the reality of the profession of tour guides now in Egypt. "This is the problem of all companies who wanted to find solutions to the crisis but in a wrong way", he added.

Azab says that some companies have concluded contracts with the owners of the bazaars. For example, if the tourist spends 5000 EGP in the bazaar, the company takes 4000, the bazaar 800 and the guide earns 200 EGP.

"Prices in these bazaars are highly exaggerated", he added. "This undermines all the companies who sell trips at higher prices. The tourists are taken them for thieves. They cannot imagine that there are those who sold by loss, and the result is that Egyptian market of tourism lose its credibility.

Azab requires the intervention of the Ministry of Tourism and the Chamber of tourism enterprises and price controls to stop the decline in prices which destroys the entire tourism sector.

He also requires the existence of a regulatory Authority inside the Chamber. This body should have the power to withdraw licenses of companies that use the wrong methods of work.

For his part, the CEO of "Pilot Tours " Samir Mohamed Ali confirms that the goal of all parties in the tourism sector is to achieve "prosperity", but Egypt still have a long way to run to reach this goal.

He explained that the current phase is a transitional one after the severe impact of the attack in Luxor on the tourism movement in Egypt. "Tour operators have canceled the Egypt of the map of international tourism, and discouraged tourists from visiting it", he said. "All indications showed that Egypt would not be the destination of a single tourist for at least two years and international experts saw that there was nothing to do but waiting till the global tourism market forgets what happened in Luxor".

According to Mohamed Ali, achieving an occupancy rate of 50 to 60% one year after the Luxor attack was a success for the Authority of tourism promotion and the efforts of the Ministry of Tourism, in addition to efforts by the bosses of companies who initiated the marketing of their trips by their own after the withdrawal of tour operators from the Egyptian market. "The owners have done so despite the high cost of individual marketing and its low income", he added.

Mohamed Ali said that tourism in Egypt has witnessed a new phenomenon: it is no more seasonal. "The influx of tourists in Egypt now covers four seasons: Arab tourists come in summer, while the Europeans and Americans come in winter and spring", he confirmed.

And Mohamed Ali added that tour operators have started to return to the Egyptian market, which was noticed during the recent period, with groups that have visited Egypt for Christmas.

Regarding the quality of tourists who came to Egypt during the crisis, Mohamed Ali said that the tourism sector is afraid that the market gets attached to this kind of tourists characterized by the very low expenses. "They come to the country because of the very low prices which sometimes reach about 10 dollars per night including accommodations and transportation", he says. "The return of tour operators in the Egyptian market will eliminate this phenomenon and will attract tourists who stay in hotels and spend on purchases, which will lead to a prosperous economy and help other sectors, indirectly related to Tourism, to benefit".

According to Mohamed Ali, tourists who visited Egypt after the Luxor attack found the hotels empty, so they lobbied to lower the prices in hotels and restaurants. "But with the rise of tourism, the Egyptian market will recover its usual tourist belonging to the middle class", he says.

The CEO of Pilot Tours estimates that occupancy rate will reach 60 to 65%. "Egypt is capable of overcoming the barrier of the four million tourists in 1999", he confirms.

About the role of the Egyptian Chamber of Tourism Companies, Mohamed Ali says that the current phase requires the intensification of cooperation with the Chamber of Antiquities and the Egyptian Federation of Tourism. "We must also train the employees who will be responsible for the return of tourists in Egypt", this must be done in coordination with specialized institutes ... the current level of graduates from these institutes is low. They need more training to master the work in the tourism sector.

For his part, the owner of the village of "Beach Albatross" Kamel Abu Ali believes that terrorist attacks were aimed at torpedoing the prosperity achieved during the period from 1992 to 1996.

During the 6 or 7 months that followed the attack in Luxor, the activities were completely stopped and the companies had no solution but bringing tourists from Russia to overcome the crisis. "The Russian market was the only available because it suffers from the mafia, and therefore not having the fear of terrorist attacks unlike tourists from the markets of Western Europe and Japan", he explained.

Abu Ali believes that the occupancy rate will reach at least 80% in hotels this year, but he fears that the attack against Iraq and tension in the region would affect the capacity of Egyptian tourism marketing and the number of tourists in the region in general.

Regarding his vision for overcoming the crisis, Abu Ali said he had visited the exporting countries of tourists at his own expense to sign contracts with travel agencies to bring tourist groups. "I have provided air tickets at low prices, plus I rented charters and I offered interesting packages of programs to attract tourists", he added. "There was no way to escape these solutions ... The future of hundreds of families, in addition to the future of my entire economic plan, was put in danger".

According to Abu Ali, domestic tourism covered, to a large extent, the losses resulting from the attack in Luxor, but domestic tourism is not enough because the tourism projects in Egypt are based on a clear economic concept: namely to draw tourists from around the world.

In his analysis of the problem of falling prices that prevailed in the Egyptian market during the crisis, Abu Ali believes that terrorist attacks are not the only reason for the reduction of prices. "The main reason is the low prices in neighboring countries which have competitor tourism to Egypt", he adds. "In a country like Tunisia, the price of tourist groups is much less expensive to that applied in Egypt when its tourism product is very good ... It has clean unpolluted beaches, good climate, a high level of service and an awareness of tourism among the citizens, besides that Tunisia has benefited from the attack in Luxor as they have no terrorist acts".

To justify the fact that a tourist must pay more money to visit Egypt compared to the neighboring countries, Abu Ali explained that by the fact that Egypt has a diversity of tourism products, which means that the tourist visits more sites during his trip to Egypt than in another country. For example, the program organized for the group that comes to visit Cairo includes, at minimum, the Pyramids, the Citadel and the Museum. "This program may also include the Islamic Cairo and Coptic Cairo", he adds. "The tourist does not visit Cairo alone, then we must add Luxor and Aswan or Hurghada and Sharm el-Sheikh and, consequently, the cost of this program is higher than programs in neighboring countries".

According to Abu Ali, tourism companies have good reason to oppose the policy of lower prices followed by some. "When 2 or 3 hotels reduce their prices the others can't do anything but the same".

Regarding the objection of the existence of two prices, one for the Egyptians and the other for foreigners, Abu Ali emphasizes that the difference between the two prices has become very little. "There are even times when the price fixed for the Egyptians is higher than those of foreigners, as during Eid al-Fitr and Eid al-Adha", he says. "The Egyptians are complaining about this". He explains that it's a matter of supply and demand. "Sometimes the hotels are increasing their prices to limit demand because they have contracts to comply with tourism companies", he added.

Abu Ali considers it necessary to intensify the participation in the "International Tourism Fairs", which is a golden opportunity to advertise the country's tourism product. "Without advertising the product remains local and can't be exported", he says.

But the Egyptian participation in these tourism fairs is away from being enough. This participation never go farther than "ITB" in Berlin," BIT" in Milan, "WTM" in London, "Fitur" in Spain, "ASTA" in the United States and recently "CIS" in Russia. It's very limited compared to the number of awards of other countries.

Experts call for increasing advertising and promotion of tourism through the invitation of journalists and media covering that field. They also require the need to diversify the Egyptian tourism product as the safari, the curative tourism, the conferences tourism and sports tourism and develop a timetable for these events each year.

Despite the surprise of observers regarding the growing number of villages and hotels and the risk that they get affected by a recession because of low occupancy rates today, Egypt will need more than one million hotel beds by 2000 to meet with the expected increase in the number of tourists in the country, which must be 6 to 7 million visitors.

This article was written for the weekly edition of the economic newspaper "al-Alam al-Yom" (The world today)