After a difficult few years following the 2011 revolution, there is renewed hope for Egypt’s tourism sector, with 2017 bringing the industry back to growth. Confidence is returning and the authorities are boldly predicting that the sector can reclaim its place as one of the leading engines of economic expansion. While there were positive signs for tourism in 2013 and 2014, before a relapse in 2015, the flotation of the currency in November 2016 has made the Egyptian market more competitive, and the government has also expended significant energy and capital to bring added resilience and revenue streams to the sector. The hope is that the security situation will hold and visitors will return in ever greater numbers.

Latest Performance

Despite early signs of recovery, the halcyon days of the previous decade still seem a long way away. In 2007, at the industry’s peak, tourism accounted for 19.5% of GDP, and three years later the country welcomed 14.7m tourists to its shores. However, in 2016, following a spate of terrorist incidents, subsequent travel bans imposed by foreign governments and generalised concerns over safety, only 5.4m visitors were recorded, which itself represented a 42% drop on the previous year. Similarly, annual tourism nights have been on the decline, falling from 147.4m in 2010 to 84.1m in 2015, according to data from the Central Agency for Public Mobilisation and Statistics.

Most importantly, this translated into a dramatic drop in revenues: in 2016 sector income declined by 44.3% to $3.4bn. In the same year, tourism’s direct contribution to GDP was 3.2% and 2.9% of national employment, according to the World Travel and Tourism Council (WTTC). The industry, directly and indirectly, accounted for 6.6% of total employment in the country in 2016. Although the indirect effects of the industry increased the total contribution to 7.2% of GDP, the sector is still falling significantly short of its contribution before the global economic crisis and subsequent political upheaval.


Despite the 44.3% decline in sector revenue in 2016, the industry showed initial signs of recovery in the final quarter of 2016, with revenues increasing by 9% year-on-year (y-o-y) to $826m. This upward momentum continued into 2017, as far as the available figures indicate: in the first seven months of the year tourism revenues increased by 170%, reaching $3.5bn, according to an official statement released to international media in September of that year. Subsequently, the industry generated more revenue in the first seven months of the year than in the whole of 2016. Similarly, with regard to visitor numbers, in the first nine months of 2017, 5.89m tourists visited Egypt, more than the number for the whole of 2016.

In terms of full-year estimates for 2017, the WTTC predicted that the sector’s direct contribution to GDP would rise by 2.5%. Total employment in the country for the same year, directly and indirectly, was expected to fall by 7% from 2016 levels.

While there has been a noticeable increase in visitors, they are not necessarily staying in the country, as has historically been the case. Indeed, in the first six months of 2017, Egypt recorded 39.4m tourism nights, less than 50% of the full-year 2015 figure, itself the lowest seen in a decade. Nonetheless, general trends are undoubtedly being viewed positively by those in the industry, and it is felt these challenges can be overcome. Cairo’s hotel occupancy rate also seems to confirm this trend exceeding 70% at the end of the first quarter of 2017, hitting a 10-year high, according to global real estate company Colliers International.

This data buoyed industry operators and policymakers and in April 2017 Hisham Al Demery, chairman of the Egyptian Tourism Promotion Board, told local media that the country would target between 8m and 10m tourists in 2017, a figure in line with the sector’s performance prior to that year. As 2017 numbers start to roll in all indications are that it was a year of significant recovery, and the momentum seems to be holding. According to a statement from a senior government official published in local press in early 2018, hotel reservations in 2017 totalled 84m, up 155% from 2016. Meanwhile, visitor numbers reached 8.3m, up from 5.4m a year earlier, with arrivals from Europe jumping 81%.

The tourism industry’s return to form has been helped in part by the depreciation of the Egyptian pound, which has made the country a cheaper and more price-competitive destination for a large number of travellers. This can be easily illustrated by the recent trends in hotel room rates. For example, in US dollar terms, the average daily rate of Cairo hotels fell by 19% between May 2016 and May 2017 to hit $86, according to Jones Lang LaSalle. This was well below the Middle Eastern average in the second quarter of 2017, which stood at $169.67, a 0.8% increase on the previous year.


However, the increased cost competitiveness of the Egyptian market is not the only reason for the tourism industry’s rebound. “Egypt was already considered a significantly cheaper tourism destination regionally. Without a marked improvement in the confidence of tourists and tour operators in terms of safety and security on the ground, depreciation is unlikely to attract more tourists,” Rashid Aboobacker, associate director at hospitality consultancy TRI Consulting, told local media sources in July 2016. “Safety will be more paramount to tourists than a reduction in costs”.

As such, the uptick in visitor numbers and tourism revenues is testament to recent government and industry efforts to sell the destination and revamp the sector. Cairo has expended significant effort to assuage the security concerns surrounding the local market. For example, the authorities managed to meet all the criteria imposed by the Russian government to resume flights to the country, following the downing of a Russian charter plane over the Sinai Peninsula in October 2015. This included new security measures at the country’s international airports, such as the introduction of ocular biometric scanners. In 2015 Russian tourists accounted for 67.9% of foreign visitors. By the end of the first half of 2016, this figure had fallen to 13%. Thus, when Russian flights resumed in the first quarter of 2017, this provided a great boost for the industry.

Meanwhile, Denmark, Finland, Norway, and Sweden also lifted their travel bans on the Sinai Peninsula in the same period, following in the footsteps of Germany, which repealed its ban back in May 2016. German bookings for the 2017 summer season rose 91% on 2016, according to the UN World Tourism Organisation Commission for the Middle East, although they were still 23% below the pre-2010 volumes. In addition, in late 2017 Air Cairo added a new European route to its network: Milan-Marsa Alam. The airline is also planning to inaugurate a Napoli-Cairo route in 2018. Italian visitors to Egypt are expected to nearly double y-o-y in 2018, from end-2017 levels, according to local media.


While the rebound of traditional source markets has been welcome news for the local industry, the travel ban imposed by many European countries also led the government to look at new markets for potential visitors. In the longer term, therefore, the short-term drop-off in visitor numbers could make the local industry stronger. To this end, the government embarked on an extensive public relations campaign in late 2015. The three-year “This is Egypt” initiative, which will cost $66m in total, is targeting both traditional source markets and new countries. In October 2017 the Ministry of Tourism (MoT) also announced the launch of a promotional campaign on the US network CNN. This includes a series of adverts running in Africa, Europe, and the Middle East until the end of the year and a sponsored special report broadcast on the channel, scheduled for broadcast at the end of 2017.

Meanwhile, in early 2018 it was reported that the Tourism Development Authority will begin to focus more on the Spanish market. Efforts will include meeting with travel agents and tour companies from the country in order to present the latest developments in Egypt’s tourist facilities and infrastructure, and the revised measures in place in response to the security concerns that had previously affected the sector. In addition, specific visitor sites will be promoted and the authority will coordinate the hosting of pilgrims with the Egyptian Orthodox Church. The body will also be advertising heavily at the FIFA 2018 World Cup, which is to be held in Russia.

All of these moves will be overseen by Rania Al Mashat, appointed as Egypt’s tourism minster in early 2018. It is hoped that Al Rashat will raise the sector’s profile in traditional and new markets. Having spent time at the IMF and the country’s central bank, Al-Mashat is Egypt’s first female tourism minster and her appointment is expected to send a positive signal to investors.

Emerging Source Markets

As this campaign suggests, authorities are not only seeking to revive core markets, but also grow secondary and new markets through their promotional efforts. One of the most important emerging source markets is the Arab world. In 2016, 2m Arab tourists visited Egypt, representing almost 40% of foreign visitors to the country. These tourists are important not only in terms of volumes, but also in terms of the amount they spend and the length of stay. Al Demery told local media that Arab visitors are valued because they visit throughout the year, stay longer and are among the top spenders. “We don’t deal with Arab tourists as customers, but rather as people in their second home,” he said. The average spend of an Arab tourist stands at $110 per night compared to a figure of less than $70 per night for other foreign visitors, Elhamy Al Zayat, former chairman of the Egyptian Tourism Federation, told local media. The number of Arab visitors is expected to reach 2.8m in 2017.

In addition to regional tourists, the state is targeting the fast-growing economies of Asia. With the state undertaking significant efforts to court visitors from China and India. In May 2017 Ismail Hamid Amer, Egyptian tourism counsellor and regional director for India and the Far East, told foreign media that Egypt is specifically targeting Indian tourists and expects a 50% rise in arrivals from the subcontinent in 2017. The tourism authorities are targeting 300,000–400,000 Indian tourists by 2019, which would make visitors from the country one of Egypt’s top-10 source markets.

To this end, Egyptian authorities are pushing for more direct flights to India. Currently, there is only one direct route, servicing Mumbai four times a week. Officials are also undertaking promotional efforts by offering packaged holidays tailored to different age groups and hosting road shows in cities like Mumbai, New Delhi, Ahmedabad and Bangalore.

There has also been a similar focus on the Chinese market, with the latter becoming an increasingly important source of tourism revenue in Egypt. The number of Chinese tourists increased from 65,000 in 2014 to over 200,000 in 2016. With the authorities continuing to look at ways of facilitating visitors from China, the numbers are only likely to increase. In July 2017 Cairo International Airport received its first charter flight from the Shen Jin province of China, adding to a growing network of charter flights between the two countries, including new routes between Aswan and Shannxi Province, and between Cairo and Shanghai.

In the first five months of 2017, the number of Chinese tourists visiting Egypt increased by 94% y-o-y, reaching 18,000. Meanwhile, tourism nights accumulated by Chinese travellers rose from 161,000 in the first five months of 2016 to 850,000 in the same period of 2017.

Domestic Tourism

While operators and authorities are looking to new emerging markets, there are also opportunities closer to home. “The local market is becoming more and more effective,” Lamia Assim, marketing director at Rowad Misr for Tourism Investment Company, told OBG. Indeed, domestic tourism now makes up about 30% of demand for the company, which owns luxury and beach resort hotel properties. The government has sought to bolster these local operators through an initiative called Egypt in our Hearts, launched in September 2016 following the international travel bans imposed on the local sector. Through the scheme, Egyptians are eligible to receive discounts on tickets for major tourism sites. Nationals can receive an LE500 ($32.94) subsidy when visiting Sharm El Sheikh and an LE700 ($46.12) subsidy for visiting a range of other destinations across the country.

As of February 2017, 545 tourist companies had benefitted from the scheme, including 88 hotels in Sharm El Sheikh and 90 floating and traditional hotels in Aswan and Luxor. In total, 80,000 Egyptians had benefitted from the scheme by February 2017.

A campaign launched by EgyptAir, the state-owned airline operator, has also supported this initiative. The company began targeting domestic tourists in July 2016 with special offers and deals. The airline was offering four day trips including flights and accommodation starting at LE990 ($65.22) for three-star lodgings, LE1095 ($72.14) for four-star hotels, and LE1350 ($88.94) for five-star accommodation. These initiatives offered respite to the tourism industry when it reached its nadir during 2016. Certain operators, such as Aurora Hospitality Management, which runs three hotels in Sharm El Sheikh and one in Marsa Alam, told local media sources that domestic tourism had saved Egyptian hotels from the threat of closure.

Niche Offerings

However, attempts to elicit a sector recovery have not exclusively focused on geography. The authorities have also been keen to bring additional revenue streams to the sector by targeting underserved and niche segments of the industry. One of these is cruise tourism, and in May 2017 the MoT brokered a deal with its Greek counterparts to establish a cruise line between the two countries. Initially, the route will carry up to 800 passengers between Greece, Port Said and Alexandria. From 2019, vessels with a capacity of up to 5000 passengers will ply the route, according to the MoT. This pact was bolstered in November 2017 by a trilateral agreement between Cyprus, Egypt, and Greece to boost cruise tourism in the Eastern Mediterranean. The cooperation will facilitate new cruise packages involving the three nations, and develop strategies to boost passenger spending in the cruise segment. Egypt is starting from a low base in this regard: in 2015 the port of Alexandria, one of the main conduits for cruise passengers, received 10 cruise ships disembarking 10,947 passengers.

In addition, the government said that is hopeful of attracting more tourists with the soft opening of the long-delayed Grand Egyptian Museum (GEM), which will be held in 2018. Under construction since the early 1990s, the actual launch is targeted for 2022. In early 2018 the statue of King Ramses II was moved from a storage location at the GEM to the atrium of the museum. It is expected that the GEM will hold 50,000 artefacts and be twice the size of the Egyptian Museum at Tahrir Square. In early 2018 the state announced a major new discovery, the 4400-year-old tomb of Hetpet, a senior figure of the Fifth Dynasty. The news follows a number of major discoveries made in 2017, including a statue in Cairo, a garden and eight mummies in Luxor, remains of a pyramid in Giza, and a tomb at Aswan.

Soft & Hard Infrastructure

Beyond the focus on source markets and new diversified revenue opportunities, the government and the wider industry has refocused on improving the tourism environment in the country. This includes investment in both the country’s soft and hard infrastructure. In terms of the former, the most important measure has been the introduction of an e-visa system, with President Abdel Fattah El Sisi launching the new system at an ICT conference in Cairo in December 2017. The new online service will expedite the process for visa applications for visitors from 43 countries, including the US, the UK, France and Canada. The president told conference attendees that the new service will help bring more tourists to the country. However, it is unclear whether the new e-visa system will be more attractive than the well-established visa on arrival service that was in use.

The state has also made efforts to ensure continued investment in the country’s hard tourism infrastructure during this difficult period. In December 2016 the Central Bank of Egypt (CBE) announced the establishment of an LE5bn ($329.4m) fund to support tourism investment. The money will be used to offer discounted financing for tourism operators, with loans extended at a rate of 10%. The focus of the CBE initiative is the maintenance and upgrade of hotels, resorts and floating Nile boats. An additional measure from the central bank also offers a reprieve to tourism-related firms by offering an extended period for debt repayment up to the end of 2018.


It is not only the state that is deploying funds in the local sector. Despite a challenging period and poor returns following the 2011 revolution, there is still significant private sector and foreign investment in the local industry. This is coming from a variety of sources. As of July 2017, for example, Saudi investors alone had SAR1bn ($266.6m) worth of investments in Egypt across 17 projects. This included six projects in the Red Sea, two on the Gulf of Aqaba, three in the town of Ain Sokhna, and one on the North Coast. As such, the market is still seen as attractive despite recent setbacks. Indeed, Egypt is the second largest recipient of capital investment in tourism in Africa, behind Morocco.

However, excluding accommodation, Egypt’s tourism industry receives the most capital investment of any tourism industry on the continent, according to a report cited in industry media. Given that the sector is beginning to rebound, investment flows are likely to tick upwards as well. In July 2017 Yehya Rashid, the former minister of tourism, told regional press that investment in tourism is expected to grow by 30% by 2020. According to the WTTC, tourism investment accounts for 11.9% or $4.6bn of total investment in the country. This figure was expected to increase by 8.4% in 2017 and at a rate of 6.4% per year over the next decade. As such, by 2027, tourism investment is forecast to reach LE93.9bn ($6.2bn) or 12.4% of total investment.


There is likely to be a wide range of chances for investment in new developments as the economy picks up, and the government’s emphasis on a construction-led stimulus should by itself provide tourism companies with new opportunities. A notable example of this is the $45bn development of a new administrative capital east of Cairo, set to house government buildings, embassies and over 1m residential units. The project is scheduled for completion between 2020 and 2022. “The new capital will be a very good opportunity for hotel investors,” Assim told OBG. As the administrative seat of government, the development should offer significant potential for advancing business tourism.

Furthermore, it is not the only new town slated for creation in Egypt. Under the auspices of the New Urban Communities Authority, a newly established state body under the Ministry of Housing, Utilities and Urban Development responsible for the construction of new cities, the state has earmarked LE37bn ($2.4bn) for new ventures. Work has already commenced on projects at Al Alamein City, Assiut Hill, the new Administrative Capital, and West Qena.


Despite persistent challenges, operating cost issues caused by high inflation, and high interest rates, the government and many operators and investors are betting on the rise in fortunes of the Egyptian tourism sector. “Challenges are here to create opportunities, and in the tourism industry the opportunity should always be a commitment to delivering an outstanding guest experience,” Sherif Shahein, vice president of local hotel chain Baron Hotels & Resorts Egypt, told OBG.

This confidence is only likely to be reinforced over the next 12 months, with an aggressive strategy to market the country both locally and internationally, and upgraded security protocols combining to give the industry a boost. In 2017 operators saw the first signs of a rebound in travellers and revenue numbers since travel bans were imposed in 2015, and the majority of forecasts indicate that the industry’s growth trend will continue on an upward trajectory.

With the state aiming to build a stronger industry, less reliant on a handful of source markets and more attuned to the diverse revenue opportunities in underutilised segments, developments such as these should put the sector in a positive position.