Egypt expects tourism rebound in 2012

CAIRO (Reuters): Egypt expects tourism revenues to rebound by more than a third next year if the country’s security situation improves in the wake of the uprising that toppled Hosni Mubarak in February and the subsequent political turmoil that sent tourists packing.

Tourism used to account for more than a tenth of Egypt’s gross domestic product (GDP) before this year’s upheaval, and also employs an estimated one in eight in a country where high joblessness fuelled the anger that led to the uprisings.

“We can get back to the 2010 figures of $12.5 billion in terms of income and 14.7 million tourists in 2012 if perceptions change. And perceptions won’t change unless security prevails and calm is restored,” Tourism Minister Mounir Fakhry Abdel Nour told Reuters in an interview on Thursday.

Security across the Arab world’s most populous nation worsened after the country’s police forces melted away from the streets in late January and after Mubarak’s ouster.

But the newly-appointed government said it would tighten security measures and beef up police presence in the streets.

“The police are now much more present in Cairo’s streets,” said Abdel Nour, adding that security has always been good in the main tourist destinations across the country.

Tourism is a crucial source of much-needed foreign currency for Egypt, and analysts say the country’s most pressing problem is the slide in foreign reserves as tourism and export earnings suffer from the unrest and capital flees the country.

Reserves have tumbled from around $35 billion at the start of 2011 to about $20 billion by the end of November, and may in coming months reach levels where the central bank is no longer able to prevent sharp falls in the Egyptian pound.

‘Dust settling’

Tourism revenue in 2011 is expected to have tumbled by about a third to $9 billion with 10 million tourists visiting the country this year.

“Probably 90 per cent of those tourists, maybe more, were around the beaches ... where life was absolutely normal,” Abdel Nour said.

“The dust is settling and the situation is calming down, and I think it will calm down completely once the electoral process is finished.”

Egypt’s parliamentary election process, which began on 28 November 28 and ends on 11 January, has been marred by a flare-up of clashes in Cairo between police and protesters demanding an immediate end to military rule. At least 17 people were killed in the protests in the latest wave of violence.

The army has promised a transition to civilian rule and a presidential poll in mid-2012.

Still, the strong lead held by Islamists in the parliamentary poll has aroused fears among liberals and others in Egypt that it could lead to rules that would ban alcohol sales and outlaw mixed bathing and bikinis in popular resorts.

For an industry that employs an estimated one in eight of Egypt’s workforce, tourism will be protected by politicians and government alike, Abdel Nour said.

“I don’t think that any responsible politician would venture and take a decision that would jeopardise a major sector of the economy,” he said.

“Whatever government is in place, it cannot do without revenues of tourism, it cannot do without the job opportunities that are open in the touristic sector, and cannot do without the foreign exchange that is generated from this activity.”

Egyptian unemployment stood at 11.8 per cent in the second quarter of 2011, based on official figures, but experts say that figure is misleadingly low because the number estimated as employed includes millions struggling in the informal sector.