Egypt, new dimensions, new frontiers

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Privatising Power - Building for the future - The Past as Present - The next step

The Past as Present

Egypt, 6 000 years of history (Karnak Temple)

The biggest success story in Egypt continues to be tourism, which attracted an unprecedented 4.8 million tourists last year. Tourism income for the first half of 1999-2000 was 43 percent higher than the previous year at $4.5 billion, a new record.

As hotel and resort facilities have reached their combined 100,000-room capacity, both the government and industry are scrambling to take advantage of the boom. Existing airports are being renovated, three new airports are being constructed under the BOOT program, and roads and communications are being upgraded. Hotel construction is also booming, as the number of hotel rooms in Sinai is set to double over the next three years. Five-star chains such as the Hyatt, Ritz-Carlton and the Four Seasons are opening hotels, which will compete with more established chains like Sheraton, Accor, Intercontinental and Le Meridien. More hotels are expected to join in.

Minister of Tourism Mamdouh El-Beltagui says increases in quantity and quality must go together. "Our objective is to double the number of tourists visiting Egypt by 2005," he says. "But one of the most important things we are developing is global quality control in terms of environment, infrastructure, hygiene and overall quality of hospitality."

To provide the necessary education and training, the Ministry of Tourism, the Union of Travel Agents and the Social Fund for Development have increased funding for hospitality industry training in the areas of organization, marketing and technology.

In tourism, however, getting services right can be more difficult than in other industries, where research and development take place prior to the product being released.

"The trouble with the tourism industry is that you cannot really test a service before it is seen by your clients," explains Elhamy El-Zayat , chairman and CEO of Emeco Travel . "The service is provided and consumed at the same time--by the time the tourists go home, it is too late to rectify problems." Emeco is an established event coordinator in Egypt, having organized high-profile events like this year's millennium celebrations in front of the Pyramids, which featured French composer Jean-Michel Jarre and drew a record 300,000 visitors from around the world.

To maintain international standards, Emeco and companies like it send employees abroad for training and exposure to other cultures, as learning how to handle special groups takes considerable time and expenditure. This could change, though, as two Swiss international hotel management institutes, Lausanne and Glion, have opened their doors in Sharm El-Sheikh and Hurghada. By training closer to home, higher-quality tourist services are accessible like never before.

Egypt's largest sources of tourists are Europe, the Middle East, North America and East Asia. While the major attractions are traditional Pharonic sites in Giza, Luxor, Aswan and this year's "Golden Mummies" discovery in the Western Oasis of Bahriyya, other sites from Egypt's diverse history are being touted as well.

The Egyptian Tourism Authority (ETA), the branch of the ministry responsible for the promotion of tourism abroad, is promoting Greco-Roman sites in Alexandria and the Golden Tombs of Wadi Bachreer. These sites are being upgraded to handle more visitors, much like Christian sites such as the voyage of the Holy Family prior to the millennium celebrations. Facilities at Islamic sites are also undergoing a revival, including massive restoration in Islamic Cairo, to attract more visitors from Arab countries, who historically seek Egypt as a source of recreation.

Tourists can also enjoy virtually unknown areas of recreation, even a round of golf at the Jolie Ville Golf Course in Sharm El-Sheikh or the Mirage City and Golf Course in Cairo. Egypt's sunny and stable climate is becoming increasingly attractive for year-round golf vacations, says Hussein Salem . "Golf has a definite part to play in the development of Egyptian tourism."
Those heading to the beach will not be disappointed either. The Ministry of Tourism, along with the Ministry of Environment, have launched campaigns to help clean up and preserve Egypt's world-renowned coral reefs. Overdiving in the heavy tourist areas of Hurghada and Sharm El-Sheikh have led to the opening of idyllic beach resorts like El-Gouna and its sister Soma Bay on the western bank of the Red Sea.

Coral reefs in the Red Sea, a diver's paradise

Ahmed El-Maghraby, chairman of the Egyptian Federation of Tourist Chambers , believes that a major part of tourism's expansion "will come from leisure tourism, because our historic sites cannot handle that rapid expansion. The fastest expansion in Egypt is happening in beach areas like Hourghada, which has already surpassed Cairo in terms of room occupancy."
Egypt also promotes itself as a venue for business conferences and major events. The country's international conference centers are almost fully booked through 2003, and hotels in Cairo are responding by offering innovative services to lure the business traveler.

Tourism is being touted as never before as one of the pillars of the Egyptian economy. The sector is one of the government's bases of much-needed foreign exchange. "Egypt has succeeded in increasing the number of tourists to 4.5 million in 30 years, but I am convinced that there is still a lot more potential," says Mounir Gabbour, chairman of ATIC Group.

European markets continue to be Egypt's major source of tourism, adds Maghraby. "We also expect a rise from U.S. and Latin American markets, and we have not even fully tapped the regional Arab market, as well as the local Egyptian market."

Taking its place in the sun, the Tourism Ministry has launched the slogan, "Tourism: the propeller of economic and social development," to raise awareness of the sector's potential in reducing unemployment and fostering economic development.

"We are currently running studies whose initial findings show that tourism provides 10 percent to 11 percent of GDP and has created over 2.2 million job opportunities," Beltagui says.

Handling this influx of tourism requires a deep government commitment to building the infrastructure. Ghabbour says an improved transportation infrastructure is vital in keeping tourists happy and safe.

"The Red Sea is one of the most important tourist areas in Egypt. To get them there, the government needs to build more roads and airports," says Ghabbour. "In this way we can double or triple the number of tourists and make sure they have a good time."

A Nile cruise between Luxor and Aswan remains Egypt' most poplar tourism product

Key to greater efficiency in tourist arrivals is the implementation of an "open skies" policy, whereby foreign commercial airlines can fly directly into any destination, not just Cairo. "Air transport is lacking, and this is because EgyptAir has a monopoly," says Sami Zoghby, president and director of Operations for Starwood 's Africa, India and Middle East Division. "The nightmare starts upon arrival in Cairo, because the onward flights to Sharm El-Sheikh cannot be confirmed in advance. As a result, you may have to wait six hours for a connection at Cairo Airport."

For its part, the government says relief is on the way, as EgyptAir tries to adapt to greater openness and competition. "We are considering joint ventures with KLM and Lufthansa, among others, as we suspect that EgyptAir is not big enough to compete on its own," says Transport Minister El-Demiri. "We are waiting on the outcome of our own studies, which will provide us with direction."

As tourists flow in, the government has also had to take into serious consideration their impact on Egypt's fragile environment. While Egypt's major sites are reasonably well-kept, damage to antiquity sites, as well as protected natural areas, has become an obligation. Beltagui says his ministry is doing more to preserve Egypt's environment for future generations: "We have learned our lesson, as we have had some bad experiences in the past. We demand compliance of investors and developers with environmental regulations, as we believe that the historical treasures in Egypt are the property of all humankind."

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© World INvestment NEws, 2000.
This is the electronic edition of the special country report on Egypt published in Forbes Global Magazine.
August 7th 2000 Issue.
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