Impact Of Democratization In Egypt Has Brought To Its Tourism Industry.

egypt toursimThree waves of democratization have swept the globe in modern history but each has bypassed entirely the Arab world which has 90% Islamic population. There were four major obstacles to democracy in the region Oil, Imperial Legacy, Arab – Israel conflict and Backward looking Islam. Now the populist political revolution sparked in Tunisia turned Egypt around as it comes out of a self-imposed ordinariness and marginalization of the past decades and regains its role as the dynamic center of Arab ideology, politics and culture. With more than 80 million people – as many as Iraq, Saudi Arabia and Syria combined – it has a large and vigorous civil society, feisty, independent media, a broad array of political forces, and a well-respected judiciary. The path and time of democratization of the Middle East will shape and change world economy in deeper sense as most of net oil exporters to world and few of the biggest sources of remittance money to many developing countries lies in this region. During the 18 days of rioting, business in Egypt slowed to a crawl. Food became scarce, looters pillaged shops, and tourists fled the country known for its Nile River and Great Pyramids. Many businesses shut their operations entirely during the riots.
Primary Research Objective
 
Impact of Democratization in Egypt has brought to its tourism industry.
 
Background
 
Egypt, also known as the cradle of civilization has a very strong and vibrant tourism industry, employing 12% of the work force and receiving around 125 Million tourists every year (Dinar Standard, 2011). Since ancient time Egypt has been a very popular tourist destination, attracting large number of tourists from Europe, Middle East and Africa. In 19th century after Napoleon’s invasion,  people once again got interested in Egypt. The new era of tourism in Egypt began in 1989-90, when many of the leading hotels were privatized, airline sector was liberalized and the Egyptian govt. came up with some strong marketing campaigns. Since then the industry has been moving with an accelerating pace, occasionally hit hard by terrorism and political unrest. Last year out of the 125 Million tourists it had received, Russia with 14 % had the highest share, followed by United Kingdom, Germany and Italy. Though presently due to the political unrest the tourism industry had been affected, but in the long run it is expected to grow further, owing to expected political stability and transparency as well as more inflow of tourists from emerging economies like China and India.

 

 
Research parameters

In depth interview with few of hotel owners and hospitality industry across India we came to know that following parameters need to be evaluated to study the impact of Democratization in Egypt has brought to its tourism industry.
  1. Number of Foreign Tourists visited in month
  2. Hotel Rooms occupancies
  3. Revenue per month/year
  4. Number of jobs depending on tourism
  5. GDP share of tourism industry
  6. Aviation and tourism infrastructure
  7. Travel warnings
Collection of secondary data was very important part as no primary data was available. We collected secondary data across print and online media.
Secondary Data
In year 2010 Egypt was visited by 14 million tourists generating 10$ billion in revenue which constituted around 10% of GDP and generated 1.2 million jobs. The political upheaval comes during peak tourist season in Egypt and a critical booking period for next fall and winter.
After the revolts and civil unrest begin in Egypt on Jan 25 roughly a million foreigners fled the country. Hotel occupancy dropped to 4 percent by Feb. 5 from 61 percent in mid-January. Hala el-Khatib, secretary general of the Egyptian Hotels Association, says hotel occupancy nationwide is down by 15% in April compared to the same month a year ago, Reuters reports. All major tourism exporting countries like Russia, Italy, France, Germany and Britain have issued travel warnings. Air carrier EgyptAir is offering to lease some 25 of its newest airplanes, along with their crews, because of a continuing dearth of passengers. Egypt’s tourism industry is losing $1 billion a month as tourists avoid the country in the wake of the revolution that toppled Hosni Mubarak as president.
Most major tourism sites are away from the heavily populated cities that have seen two days of anti-government protests. The Red Sea resort towns of Sharm El Sheikh and Hurghada are major draws for tourists because of their beaches and year-round warm weather. But antiquities such as the Egyptian Museum and the Giza Pyramids also draw millions of tourists to the capital Cairo, which has seen much of the unrest. Also popular are the southern cities of Luxor and Aswan. Most of Egypt’s tourists come from Russia, Italy, France, Germany and Britain.
Hotel occupancy in the Red Sea resort of Sharm el-Sheikh stands only at 32% as of mid-April, though that’s better than an abysmal 11% after the protests erupted on Jan. 25. Before the revolution, the region typically saw 75% of rooms occupied this time of year.
Tourism revenue
2007
2008
2009
2010
Tourism Receipts (US$ million)
9,303.0
10,985.0
10,477.5
10,133.4
HOW HAS THE INDUSTRY WEATHERED PREVIOUS CHALLENGES?
 
The industry suffered after gunmen killed 58 tourists and four Egyptians at an ancient temple in Luxor in 1997, but has weathered disruptions relatively well since then. The Sept. 11, 2001 attacks, the second Palestinian Intifada, and a series of bomb attacks on tourist resorts in Sinai from 2004 to 2006 all led to temporary decreases in tourist arrivals, but the trend over the last decade has been broadly upward Protests in Egypt may not be enough on their own to deter tourists. But news of unrest in Tunisia, Lebanon and elsewhere in the Middle East, could help convince some travellers to reroute to a region that is making fewer headlines.
Impact and Conclusion
 
As hotel occupancies are recovering to 30% in April and Tourism department planning massive marketing campaign to promote tourism in Egypt, Egypt is on way of recovery path. But as previous recoveries this will take time with predictions of till Oct 2011. Losses of revenues around $8 billion are expected. Losses on taxes and service industry are still being analyzed.  Many travel warnings are being lifted and WTO is also helping Egypt out of this crisis. Hope of bright future is also helping Egyptians fight this crisis out.

2 thoughts on “Impact Of Democratization In Egypt Has Brought To Its Tourism Industry.

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