TOURISM SECTOR DEVELOPMENTS IN EGYPT

Transcription

1 TOURISM SECTOR DEVELOPMENTS IN EGYPT 2005 Business Studies & Analysis Center. All rights reserved. Unauthorized reproduction, copying, r ing, storage or Web-site posting is prohibited. All information in this report is verified to the best of the Author s and publisher s ability.

2 ACKNOWLEDGEMENTS The researcher would like to extend deep appreciation and gratitude to the following experts and key figures for their support and valuable comments throughout the preparation of this study (names are listed alphabetically): Ahmed El-Khadem, Chairman, Egyptian Tourist Authority. Ahmed El-Maghraby (H.E.), Minister of Tourism, Egypt. Amr Badr, Managing Director, Abercrombie & Kent Egypt. Elhamy El-Zayat, Chairman and CEO, EMECO Travel; and Chairman, Egyptian Tourism Federation (ETF). Fathy Nour, Advisor to the Minister, Ministry of Tourism, Egypt; and Chairman, Hotel Establishments Chamber, Egyptian Tourism Federation (ETF). Hussein Badran, Advisor, Training and Human Resources Development, Egyptian Tourism Federation (ETF). James Pringle, Senior Counselor, M.A. Kharafi Group. Magdy El-Kobeissy (General), Executive Director, Tourism Development Authority. Mahmoud El-Kaissouni, Chairman, Eco-tourism Committee, Egyptian Tourism Federation (ETF). Mohamed Ahmed, General Supervisor, Technical Office, Tourism Development Authority. Mostafa El-Naggar, Assistant Chief Editor and Head of Tourism Section, Al-Ahram Newspaper. Sameeh Sawiris, Vice President, Orascom Construction Industries. Zahy Hawass (Dr.), Secretary General, Supreme Council for Antiquities. ii AmCham BSAC 2005

3 EXECUTIVE SUMMARY Tourism is the fourth largest exported product and largest exported service in the world, representing 7% of global exports of goods and services or 0% of service exports alone. Tight economic conditions in some major tourism generating markets together with the 9/11 events in the U.S., and the subsequent wars in Afghanistan and Iraq have however dampened the growth of global tourism which recorded unusually lower rates of growth versus growth of GDP. Tourism performance for the early months of 2004 shows much better prospects, though. Egypt has no doubt been affected by these international developments, experiencing below average growth rates in tourism activity. Nevertheless, tourist arrivals were 10 times higher than the global average during , and attracted some 20% of tourist arrivals to the Middle East. This growth in International Tourist Arrivals (ITA) has generated $4.6 billion in tourism receipts that account for 22% of total exports of goods and services and 9% of services exports, making tourism the largest foreign currency earner in Egypt. Estimates indicate that tourism will generate some $6.1 billion in 2004, thus ranking the Egyptian tourism market as the 28th largest market in the world. The tourism sector in Egypt is estimated to generate a total of $12.8 billion in both direct and indirect economic activity. ITA reached 8.1 million in 2004, recording a 4.1% increase over the previous year. Western and Southern European markets are the prime generators of tourism for Egypt, followed by the Arab, Eastern European and the U.S. markets, respectively. Other new tourism generating markets in Southeast Asia, Latin America and Eastern Europe are also emerging as evidenced by extremely high growth rates. To meet the growth in demand, tourism accommodation capacity has also been growing. It outpaced demand growth with a 7% increase in capacity over South Sinai has the highest capacity growth followed by Luxor and Alexandria. Matrouh is also beginning to undertake vast expansions and development. In addition, there has been observed growth of tourism-related services and facilities during , such as travel agencies, restaurants and cafeterias. Moreover, environmental awareness is increasing as shown by the growing number of existing nature protectorates. Furthermore, the planned expansion and development of cultural and infrastructure facilities should further enhance tourism performance in the coming year. The appointment of the new body of the Ministry of Tourism in July 2004 signifies the start of a solid long-term vision for the tourism sector in Egypt. The focus is now on expanding and encouraging tourism investment, especially in new tourism destinations that have high demand potential. Improving the quality of services to meet international standards and marketing Egypt in new potential markets are the pillars for reaching the sector s full potential. AmCham BSAC 2005 iii

4 TABLE OF CONTENTS List of Figures List of Tables List of Acronyms vi vii ix Part I: GLOBAL TOURISM DEVELOPMENTS 1. Global Travel Trends 1.1 Trade Down 1.2 Shifts in the Purpose of Travel 1. Potential Tourism Spenders 2. Recent Market Developments 2.1 Demand-Side Developments International Tourist Arrivals (ITA) International Tourism Receipts (ITR) 2.2 Supply-Side Developments Part II: THE TOURISM SECTOR IN EGYPT: MARKET DEVELOPMENTS 1. Market Size 1.1 Demand Developments 1.2 Supply Developments 2. Market Segmentation: Developments in Demand 2.1 Growth Patterns of Tourism Generating Markets 2.2 Demand Variations for Selected Destinations 2. Shifts in Purpose of Visit 2.4 Modes of Travel. Market Segmentation: Developments in Supply.1 Capacity Growth Pattern.2 Tourism-Related Services and Facilities Part III: TOURISM DEVELOPMENT IN EGYPT 1. Institutional Developments 2. Policy Developments 2.1 Financial Policy 2.2 Regulatory Policy 2. Pricing Policy. Tourism-Related Policies and Programs: Aviation 4. Marketing Developments 5. Human Resources Developments 6. Environmental Developments Part IV: INVESTMENT IN THE EGYPTIAN TOURISM SECTOR 1. Current Tourism Investments 2. Potential Tourism Investment Opportunities 2.1 Superstructure Expansions North Coast Development Marsa Alam Development 2.1. Taba Development iv AmCham BSAC 2005

5 2.2 Eco-tourism Development 2. Indirect Expansions 2..1 Cultural Development 2..2 Infrastructure Expansion Part V: CONCLUSION 1. Future Outlook 2. SWOT Analysis of the Tourism Sector in Egypt. Recommendations Selected References Appendix One Decree of the Prime Minister No. 104 of the Year 2002 Appendix Two Port Ghalib Districts Plan Appendix Three National Protectorates In Egypt Appendix Four Tourist Areas & Investment Priority Zones In Egypt AmCham BSAC 2002 v

6 LIST OF FIGURES Figure I.1 Top Tourism Potential Spenders ( ) Figure I.2 ITA & ITR by Region (200) Figure I. Regional Developments in ITA ( ) Figure I.4 Global ITR Versus ITA Figure I.5 World Tourism Accommodation Capacity Figure II.1 Comparative Growth in International Tourist Arrivals (ITA) Figure II.2 Egypt ITA, ITN and ITR Figure II. Growth in Egypt ITA versus Existing Room Capacity Figure II.4 ITA by Generating Region (200) Figure II.5 Growth in ITA Tourist Nights by Region Figure II.6 Growth in Tourist Nights by Region Figure II.7 Egypt Top 15 Tourism Generating Markets (200) Figure II.8 ITA Growth by Top Tourism Generating Markets Figure II.9 Growth in Demand for Tourist Destinations in Egypt ( ) Figure II.10 Tourist Destinations (200) Figure II.11 Tourism Demand by Destination and Generating Region Figure II.12 Growth in Tourism Demand by Destination and Generating Region Figure II.1 ITA to Egypt by Purpose of Visit Figure II.14 ITA to Egypt by Mode of Transportation (200) Figure II.15 Growth in Tourism Capacity versus Growth in Demand Figure II.16 Capacity Growth by Accommodation Categories Figure II.17 Travel Agencies in Egypt Figure II.18 Tour Guides in Egypt Figure IV.1 Investment in Tourism Establishments in Egypt Figure IV.2 Geographic Distribution of Room Capacity under Construction (200) vi AmCham BSAC 2005

7 LIST OF TABLES Table II.1 Table IV.1 Table V.1 Comparison of Egypt s Travel & Tourism Sector with Regional Competitors (2004) Investment in Tourism (2004) Prospects of Various Tourism Indicators AmCham BSAC 2005 vii