Egypt aims for Quick Tourism Recovery

The tourism industry in Egypt will bounce back within weeks, following the explosions in Dahab on April 24, according to the Egyptian Tourism Minister, Zoheir Garannah, in an exclusive interview with Middle East Economic Digest (MEED).

“We are confident in our product and that people will continue to travel here. The main impression that the attacks left was one of people’s solidarity,” said Garannah.

The minister referred to the tourism industry’s increasing resilience: Egypt took two years to recover after the massacre in Luxor in 1997, and six months to bounce back after the Sharm El Sheikh attack in July 2005.

“The recovery is likely to take three weeks this time,” he said. “The threat is less from cancellations than from a decrease in new bookings.”

Tourism is one of the pillars of the Egyptian economy, with 8.6 million visitors a year and 170,000 hotel rooms. The government has targeted an additional 50,000 new rooms and 1 million new visitors every year. This growth will create 200,000 new jobs a year.

Garannah explained, “One of the advantages in our tourism development at the moment is that it is all driven by the private sector. We see developers coming in to launch integrated mixed-use developments – some the size of new cities.”

Meanwhile, private sector development is being spurred on by government reform.

“There have been lots of reforms to make it easier for people to do business here. Business tax has been lowered from 42% to 20% – among the best in the world.

“We sell land to developers at a nominal rate and we are committed to eliminating bureaucracy. And, since 2005 foreigners are allowed to own freehold property except in Sinai where the maximum ownership is 99-year leasehold.”

Further change is on the cards for 2007 when the country’s open skies policy takes effect over Cairo; sale of part of EgyptAir is also expected in the future, with due diligence being conducted for an IPO of 20% of the airline’s capital at present.

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