Jordan tourism down $70m amid Egypt unrest

Jordan’s tourism industry has taken a $70m hit as a direct result of the ongoing civil unrest in Egypt, government data has shown.

Government data has estimated tourism losses at around $70m, or a quarter of the country’s tourism income, as travellers amend their plans to skirt the Middle East.

Michael Nazzal, chairman of Jordan's Hotels Association, said that hotels in the kingdom had seen a surge in cancellations, particularly from European travellers.

Nazzal’s comments were echoed by Mohammad Samih, chairman of The Jordan Inbound Tour Operators Association, who said some 40 percent of bookings to April 2011 had been cancelled.

On Tuesday, Thomas Cook Group, Europe’s second-biggest tour operator, said the cost of cancelled trips to Egypt and Tunisia and of repatriating customers may reduce profit by about $32m.

Unrest in the two North African countries will hurt fiscal second-quarter profit, though Thomas Cook is trying to mitigate the damage by booking vacationers to other destinations, the Peterborough, England-based company said in a statement. The tour operator also reported a narrower loss in the three months ended December 31.

Thomas Cook and larger rival TUI Travel have scrapped trips from some European countries to Egypt and Tunisia and brought customers home early. TUI Travel said last week that profit may be reduced by as much as £30m.

The UK Foreign Office has advised against non-essential travel to the Egyptian destinations of Cairo, Alexandria, Luxor and Suez.

“We aim to mitigate all of the £20m,” CEO Manny Fontenla-Novoa said on a conference call. “There’s been plenty of booking to other destinations,” particularly Spain and Greece, said the CEO, who reiterated a full-year operating profit target of £420m.

Egypt accounts for about seven percent of Thomas Cook’s annual profit, according to John Beaumont, an analyst at Matrix Capital in London. If bookings to the country return to normal by the summer season, the impact would be more contained, he said.

Political turmoil may drive customers to the larger travel companies “because of their financial security and experience of looking after customers during times of significant disruption,” Nick Batram, a London-based analyst at Peel Hunt, said in an email.