The former chairperson of the Egyptian Tourism Federation (ETF), Elhamy El-Zayyat, and member of the board of directors of the Egyptian Chamber Hotel , Haitham Nassar, laid out a strategy to develop the tourism sector within the next two years, in cooperation with Abla Abdullatif, chairperson of the Egyptian Centre for Economic Studies (ECES).
That vision, presented at a seminar led by Daily News Egypt, aims to attract 16.6 million tourists to Egypt through 2020, through improving the legislative structure of the sector and qualifying its elements, including in terms of labour, hotel rooms, and tourist transport fleets.
MP Amr Sedky, member of the economic committee of parliament, and Adel Rady, chairperson of the Tourism Investors Association in Marsa Alam, in addition to the former chairperson of the International Air Transport Association (IATA), Hassan Aziz, also took part in the seminar.
What led you to developing the strategy at the present time?
El-Zayyat: The tourism sector went through many crises in the 1990s, such as the Deir Al-Bahari incident. The recent crises the sector has been going through has been continuous.
Before 2010, there were strong ministers able to deal with various crises, such as Fouad Sultan, then Mamdouh Al-Beltagy.
Terrorism would hit hard, but the sector would then soon recover within a few months. The recent crises, however, took a long time to recover from because of the negligence of the officials in charge of the tourism sector. Thus, at the time, we should have moved to create this strategy and set it, which we are discussing now.
I would like to point out that the chairperson of the ECES has shown a lot of support to develop this strategy.
This cooperation between the ECES and the private sector is very good. However, we faced many difficulties in finding accurate figures on the tourism sector.
We worked for six months in order to develop this strategy, and it is a short-term one because the sector is one that goes through many changes.
In light of the absence of figures, some statistics were inaccurate, especially because each minister has tried to present statistics that satisfy the political leadership.
To overcome this issue, we resorted to the figures issued by the World Tourism Organisation (WTO) instead of the main soruce, which is the Ministry of Tourism.
Have you sensed a recovery in the sector’s indicators over the past period?
Abdullatif: We have started the recovery phase. The global tourism industry changes rapidly, and other competing companies take swift steps, unlike us.
We must admit, however, that the tourism sector is quickly impacted by political events, which may be out of our control, such as the events taking place in the Middle East region.
We can fix the situation of the sector as much as we can with the aim of obtaining our share of international tourism, which exceeded 1.2 billion people last year.
This strategy is a new road map for the sector, and it was the result of a so-called competitiveness observatory.
The tourism sector is the first service activity to see a strategy made specifically for it, as the idea of an observatory relies on evaluating our situation compared to our competitors and the international market of tourism in general.
This observatory compared Egypt with three groups of countries that represent strong tourism destinations, including Spain, France, and Italy. The second group is Turkey and Greece, and the third is comprised of Tunisia, Morocco, and Jordan.
The aspects of comparison included price of services, infrastructure, and the natural resources of each destination.
The road map seeks to answer three questions: where are we? Where do we want to be? How do we achieve our goals?
The strategy aims to make Egypt a high-quality tourism destination by 2020. We could not develop a vision that applies for a longer period of time because global tourism changes very fast.
We have a goal for each market based on the size of its population and kind of activity. We divided activities into four different groups based on tourist spending .
Spending rates for the various tourism patterns start from less than $25 to up to $250 per night.
When will you discuss this strategy with the Ministry of Tourism?
Abdullatif: We made a deal with the Tourism Ministry to have a work programme for this strategy over the upcoming period.
This road map aims to create all kinds of reforms in the sector, whether they are institutional, legislative, or labour training.
Was this road map connected to the infrastructure of the sector?
Abdullatif: Yes, the strategy has indeed been linked to infrastructure, such as airports and others, and we seek to benefit from the tourism expertise in Egypt as the sector recovers.
El-Zayyat: I would like to point out that the tourism sector has lost about two-thirds of its trained labour over the past seven years.
Abdullatif: The various tourist products in Egypt are like the process of producing cotton t-shirts; they are produced in good quality but the whole world turns to polyester.
How do you see the marketing and promotion of the tourism sector in the past period?
El-Zayyat: Over the past year, there was no marketing in the actual sense, as the concept is a science, and all the Tourism Promotion Authority has done is promotion. To market, however, it requires studies and research of the market and the target segments addressed by these Egyptian tourism products. We need specifies branding for Egypt, which is a major thing, as promotion is the last step in marketing.
I get asked: will the Chinese market replace the Russian market in terms of the annual number of inbound tourism? And my answer is a definite no. It is difficult to do this.
Chinese tourists prefer the areas closest to them, especially because a large number of them looks to gambl or shop in Western European countries or the United States. Macao, for example, receives about 35 million Chinese tourists annually.
Is coordination between executive authorities and the private sector lacking? Is this what the strategy seeks to implement?
Nassar: It is necessary to put the efforts in the sector into a uniform framework in a deliberate manner, and at the end, we are talking about a country and presenting it to the world. If it was presented badly by one person, this will certainly hurt the reputation of everyone else and affect the existing products.
The tourism industry is a commodity, in which many factors are involved, so it is necessary to create harmony among them.
The Egyptian Tourism Federation was the intermediary between all parties, including companies and hotels. It delivered our messages to the ministry to come up with an integrated plan to market Egyptian tourism.
How does the road map deal with the overlapping of specialties in terms of portfolio management?
Abdullatif: One of the negatives we are currently facing is the management of Cairo International Airport, as it is subject to more than one responsible authority, which destroys all aggregated efforts. Coordination and organisation are important policies.
The state is obliged to work within the framework of these policies in a way that does not cause issues during implementation.
Nassar: From 1968 until 2010, crises that arose were over quickly and did not take over a year and a half to solve, as long as ministries worked together to get out of them swiftly.
Abdullatif: There is no comparison between the current events and the past crises. We need to move fast to compensate for the losses of the past seven years.
Nassar: Looking at figures and statistics from 2008 until 2010, we will then see the importance of the sector and note that the current figures are only signs to guide us to overcoming the issues we face and the next steps to take.
How do you view the situation of labour training?
Nassar: One of the challenges we are facing is reaching the past numbers of workers in the sector, over 85% of whom have abandonded it, leaving no substitutes behind.
This requires some changes in terms of the way the tourism sector is seen and its importance to the national economy. This will help the flow of tourism to Egypt.
We had about 1.8 million workers directly trained for the sector, and unfortunately, during the past period, the public money to train them was wasted as a result of shutting down training facilities that contained equipment worth millions of pounds, and many workers lost their jobs as a result of not getting consistently paid.
El-Zayyat: The tourism sector received €15m to train its workers when Fayza Aboul Naga assumed the position of minister of investment. Since then, we started receiving funding from several ministries to train the workers of the sector.
Abdullatif: Developing training programmes for workers in the sector must occur within a timeframe, with the proper selection of trainers. Funding must not occur without looking at a mechanism to implement the training programmes.
The existing resources are not properly utilised. The road map includes maximising the available resources and making use of the wasted opportunities, such as, for example, giving attention to conference or festival tourism.
Aziz: The difference between us and any advanced country in terms of tourism, such as Dubai, is that the state takes care of legislating the laws and decisions according to which the private sector works.
The sector has many complex laws that force officials to back out in fear of crises.
Do you think that the state’s interference in the activity is harmful?
Aziz: If the state interferes in the details of operations, we will not succeed, because the state is not really a good manager. If legislation were made properly, we could attract over 20 million tourists annually. We must offer incentives in the sector.
We also need legislation for the functioning of airports and for the infrastructure of tourism and aviation.
When the incident of the Russian plane occurred, we could not transport tourists because there was no strong Egyptian aviation arm, hence, tourists had to travel through Ukrainian airlines.
There must be legislation to allow private sector companies to work in the management of Egyptian airports.
El-Zayyat: We have seven different entities operating Cairo International Airport.
Aziz: All parties could unite to run the airport under one umbrella.
Does the road map include new tourist patterns that we should pay more attention to?
El-Zayyat: Conference tourism has not been properly utilised, unfortunately. Previously, we arranged a conference for podiatry illnesses and invited 6,000 doctors and their wives, making the total number of arrivals 9,000.
Cape Town recorded 100% occupation through organising medical conferences, even though it is classified as one of the most unsafe cities in the world.
Abdullatif: Managing the system is more important than laws, and we have many laws that have not been enforced.
Amr Sedky: The tourism industry has become open and any tourism investor is likely to deal with parties other than the Ministry of Tourism, which would kill any new investments, but changes are happening with the new laws recently issued by parliament.
When we think of the unified tourism law, there were different visions of it. The aim, however, was to create an outlet for each ministry through which it can deal with investors in accordance with its own laws. This led to investors dealing with laws they did not even know about.
At that time, I talked to Mohamed Badr, the governor of Luxor who was, at the time, the assistant minister of tourism. We started aggregating all the laws and decisions in order to consider unifying them.
Workers in the field of tourism were called ambassadors thanks to their hospitality with foreigners. Egyptian hospitality was a landmark. The clear decline in the sector of tourism, however, is the result of the presence of outsiders who do not have a professional and conscientious background.
Nowadays, anyone with a sum of money can start up a tourism company without adhering to the standards of practicing this profession.
I believe that training will be able to fix these issues. In fact, when we studied the work mechanisms of the sector, we realised that some standards are inherited from a generation to another, which can be utilised well when developing training courses.
For example, we discovered through a study that most workers in food and catering sector are from the governorate of Sharqeya, hence, we moved the training programme in this field to Sharqeya.
Aviation is one of the most important portfolios in the sector; how can it serve Egyptian tourism?
Sedky: If we look at the experience of the UAE, we will see how Dubai International Airport improved the city’s tourism.
An official from the Emirates told me about how aviation helped the tourism sector in his country, and said that if aviation ever faced losses, the state will support it. New patterns such as transit tourism are now introduced and are becoming more beneficial.
Dubai created high-quality products, which it started marketing and promoting . In Egypt, our main issue is the administration.
Dubai’s administration launched a shopping festival in March and created demand for it, then they started launching conference tourism, making tourism active throughout the year.
The UAE is good at unified planning, which is an aspect we lack. A clear example on this would be the absence of planning for the creation of e-visas. We have been discussing this for many years, but the Ministry of Tourism has a vision, while the Ministry of Interior has another vision, and the Ministry of Foreign Affairs has a completely different vision.
Rady: Is aviation part of the road map?
Abdullatif: This portfolio requires a specific strategy. However, I would like to point out that you cannot isolate the sector of tourism from the sectors of aviation and antiquities.
Rady: What about the strategy’s vision for tourism investment?
Nassar: There are over 225,000 rooms in Egypt within the tourism sector. When we had a smaller number of rooms, we were still able to attract 14 million tourists annually, and that was in 2010. We demanded from the state to stop providing licenses for new hotels in order to maintain demand and prices.
We must look at the available hotel rooms we have now, and their situation seven years after the recession they witnessed.
We have five-star hotels marketed abroad as three-star hotels, and we have the tools to change this situation now, so we must start.
Will we be seeing a unified tourism law during the upcoming period?
Sedky: There has been a desire to issue a unified tourism law and I think this may require two legislative sessions because this is an important and complex law.
Throughout the past legislative sessions, parliament was burdened with many urgent bills to be passed related to the economic reform programme.
Recently, I submitted a draft law on therapeutic tourism. There are many bills to be approved, such as the investment law, and the one-person companies law.
Rady: There is a state of chaos regarding the laws governing the sector. They must be solved to push the sector forward. Egypt has a low rank in terms of the countries that enforce laws, which is very questionable.
Nassar: Neighbouring countries have laid out policies and are implementing successive and rapid programmes in order to develop their tourism products.
Regarding marketing, and with new tenders launched, did the company J Walter Thompson fail to manage the campaign?
Nassar: As a state sector and a state, we are responsible for the failure of the marketing campaign, as visions overlapped, and programmes were not developed based on the recent changes that occurred at the end of 2015.
The company’s activity was halted for a year, and its marketing campaigns started to be active only recently.
Sedky: The company had to make a modification to its marketing work strategies after the incident of the Russian plane at the end of October 2015.
Nassar: At that time, we demanded the Ministry of Tourism to maintain the allocated funding. However, the marketing work was halted.
El-Zayyat: The former minister led a chaotic system with his programme. He planned to implement six programmes in six months, but instead, he spent his term fighting against investors.
He criticised the charter flight system and wanted to pay the late dues of airline companies in Egyptian pounds, including the Egyptian Holding Company for Airports. His attempt was not accepted, and the company demanded its dues in dollars.
I believe that the new minister has a lot to work on. She assumed her position shortly before the ITB Berlin fair and managed to participate in it.
Sedky: I do not support the idea of ministers or governors taking part in foreign affairs, as we have an authority to promote tourism and that is its job. Ministers should remain in their offices to solve the issues of the sector instead of constantly traveling unless it is necessary, which is what Mamdouh El-Beltagy tried to make happen. The sector is full of burdens.
How do you see the crisis of failing hotels?
El-Zayyat: We have made great efforts in this regard over the past years. The Papyrus fund was established to help failing companies and hotels. Hisham Zazou, the former minister of tourism, wanted to allocate EGP 50m for the issue of troubled companies, but the minister of tourism who succeeded him stopped the decision. Luckily, the new minister of tourism announced recently that the fund will be reactivated.
Why did the former minister halt the tourism investment fund?
El-Zayyat: He wanted 20% of the fund’s money to be allocated for new troubled projects, which was declined. No money was injected and the whole project was halted.
We received many Chinese offers to finance the fund, and there was also financial surplus from Arabian Gulf countries allocated for the same purpose, but now the circumstances are different.
We must admit that the sector has many issues that need to be addressed, and President Al-Sisi pays great attention to this issue at the present time.
We have the sun, sand, and air. Three main elements for tourism. We also have our antiquities.
It is worth noting that there are 280 floating hotels on the riverway that have been idle for seven years.
How does the road map see the issue of quality and efficiency of services in the sector?
Nassar: Like I said earlier, we have demanded from the ministry to suspend the licensing of new hotels. To increase the efficiency of services, these hotels must be subject to specific standards.
I believe that the past period is responsible for the declined quality, as investors without vision entered the sector with the aim of making quick profits.
There is also another serious problem, which is that investors wanted to include all tourist activities in their businesses, which would result in a breakdown of the sector; something that we can already see right now.
Generally, without enforcing new norms, we will see cases of food poisoning and harassment.
Are we ready to face the expected tourism flows as recovery takes place?
Nassar: If we do not follow the strategy, we will end up at a dead-end. The sector is full of expertise to be utilised to get out of this crisis, especially with the resumption of flights between Egypt and Russia. However, in my opinion, this has a very limited impact on the tourism sector.
Sedky: I do not expect to see Russian tourists coming back to Egypt in light of the matches of the World Cup this summer.