RnR Market Research

Egypt Travel and Tourism Industry to 2018

 
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Dallas, TX -- (SBWIRE) -- 02/04/2014 -- The report provides detailed market analysis, information and insights, including: Historic and forecast tourist volumes covering the entire Egyptian travel and tourism sector; Detailed analysis of tourist spending patterns in Egypt; The total, direct and indirect tourism output generated by each category within the Egyptian travel and tourism sector; Employment and salary trends for various categories in the Egyptian travel and tourism sector, such as accommodation, sightseeing and entertainment, foodservice, transportation, retail, travel intermediaries and others; Detailed market classification across each category, with analysis using similar metrics; Detailed analysis of the airline, hotel, car rental and travel intermediaries industries.

Political revolution in 2011, which led to the end of the rule of the country’s fourth president, Hosni Mubarak, resulted in significant challenges for the Egyptian travel and tourism sector. Social and political conditions improved in 2012 and the tourism sector showed signs of recovery, but the situation deteriorated again in 2013 due to further unrest. A condition in the country has improved since July-August 2013, and expects a slow return to growth over the forecast period (2014-2018).

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Political unrest adversely affected the Egyptian economy in 2011 and 2013. The growth in gross domestic product (GDP), which increased at a rate of 5.1% in 2010, slowed to 1.8% in 2011. Travel and tourism, a major economic contributor, was affected, with international arrivals decreasing at a rate of 33.2% in 2011 owing to the unrest and the country’s negative image portrayed in the worldwide media. As the situation improved post revolution, the country registered a return to growth and signs of recovery in 2012. However, further unrest in July 2013, which led to the ousting of Mohamed Morsi from power by the military, hampered economic growth and tourist flows in the country once again.

Egypt has a variety of natural landscapes and cultural heritage sites. It is home to seven UNESCO World Heritage sites, including the Pyramid fields from Giza to Dahshur, Nubian Monuments at Abu Simbel and Wadi Al-Hitan. Egypt’s cultural and archaeological heritage is also a tourist attraction and work has been ongoing to restore and renovate key sites. The Pyramid of Khafre, also known as the Pyramid of Chephren, was reopened in October 2012 after 10-year-long renovation work, to strengthen the ailing Egyptian tourism sector.

Despite the political unrest, domestic tourism in Egypt performed well. The number of domestic trips increased from 12.4 million in 2009 to 15.0 million in 2013, due to government efforts to promote domestic tourism such as offering discounts to citizens at key tourist destinations, and discounts offered by hotels to make-up for the losses registered due to the lack of international tourists. The average expenditure per domestic tourist in Egypt increased at a review-period CAGR of 5.70%.

The revolution in Egypt in 2011 drove a number of countries, including the US and the UK, to issue travel warnings, advising residents not to travel to the country. Political unrest in 2013 damaged the country’s reputation further. Easing foreign travelers’ concerns over safety and security is a major challenge facing the Egyptian tourism sector. According to the World Economic Forum’s Travel and Tourism Competitiveness Index for 2013, Egypt ranked last (140 out of 140 countries) in terms of safety and security. However, in October 2013, the Tourism Ministry announced the lifting of travel warning by 13 countries, including Germany, Hungary, Denmark, the Netherlands and Finland.

The Egyptian aviation market experienced a number of challenges during the review period. In 2009, total revenue generated in the market declined by 2.20%, primarily due to the global economic downturn and uncertain economic scenario. However, it recovered in 2010 with 6.55% growth, driven by the increase in passenger volumes in all segments. In the same year, revenue generated by the country’s low-cost airlines rose by 33.65%, driven by the increase in demand for economic and affordable travel by business and leisure tourists.

Political and social unrest also adversely impacted the Egyptian hotel market. Travel warnings issued by a number of countries, advising citizens not to travel to Egypt, led to a decline in tourist volumes, subsequently limiting business for hotels. During the review period, total hotel revenue generated fell at a CAGR of 11.87%, from EGP19.3 million (US$3.74 million) in 2009 to EGP12.5 million (US$1.83 million) in 2013. The largest fall in revenue, at a rate of 40.90%, was recorded in 2011.

Political uncertainty and a decline in business activity affected business car rentals, which posted the largest decline at a review-period CAGR of -3.08%. The majority of car rentals in Egypt were made at non-airport locations, with sales from such rentals accounting for 66.3% of the total market value in 2013. However, poor road conditions and chaotic traffic systems discouraged tourists from renting cars, instead leading to a preference for taxis.

Conventional travel service providers dominated the industry in 2013 with 90.3% of the market value, while online service providers accounted for the remaining 9.7%. However, online service providers registered significant growth during the review period, at a CAGR of 24.64%. This growth was primarily driven by the country’s high internet penetration rate of 35.6%, in comparison to neighboring countries.

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