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Wed 4 May 2011 03:44 PM

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Egypt offers financial perks to boost ailing tourism

State to subsidise half-full planes, offer cashback schemes to operators to aid tourism pick-up

Egypt offers financial perks to boost ailing tourism
TOURISM REVIVAL: Egypt is offering financial incentives to tour operators in the UAE and Europe in a bid to tempt back visitors and maintain chartered flights to the Arab state (Getty Images)
Egypt offers financial perks to boost ailing tourism

Egypt is offering financial incentives to tour operators in the UAE and Europe in a bid to tempt back visitors and maintain chartered flights to the Arab state, the country’s tourism ministry said.

The government has said it will subsidise half-full inbound flights until October and offer cash benefits to travel agents in exchange for running marketing campaigns for Egypt.

“If they can fill the aircrafts by 50 percent, then that is enough for us to pay an additional percentage on top of that,” said Hisham Zaazou, senior assistant minister of tourism, on the sidelines of an event in Dubai.

“[For tour operators], we’re telling them if you run campaigns for Egypt, we’re going to pay a dollar against your dollar or a euro against your euro.”

Tourism, the backbone of Egypt’s economy, has slowed to a trickle in the wake of a violent 18-day uprising that ousted president Hosni Mubarak and saw embassies worldwide issue travel warnings against the Arab state.

The aftermath has left Egypt’s travel industry in crisis, with the country’s tourism minister predicting 2011 revenue will be 25 percent lower than the previous year. An estimated $1.8bn was wiped from the industry between February 1 and April 5.

The fallout has also taken a toll on the aviation industry, with a number of carriers scaling back or scrapping Egyptian routes.

British Airways said it would halt scheduled flights to the Egyptian Red Sea resort of Sharm El Sheikh from May as political unrest in the region hurts passenger numbers. Polish carrier LOT said in March it would stop flights to Egypt while Air France said it would reduce frequencies.

Job losses in the tourism industry were kept to a minimum after the government stepped in to subsidise salaries during the height of the crisis, Zaazou said.

“[It was] a kind of insurance policy for the business community saying, ‘do not get rid of your employees, and we will pay you for the coming three months,’” he said. “The total amount of redundancies was a bit less than five percent of those working the tourism sector.”

Efforts to bolster Egypt’s ailing travel industry have been welcomed by analysts who warn it may be years before business returns to pre-crisis levels.  

“Any strategy is of course a good strategy at this point,” Nadejda Popova, Middle East analyst with Euromonitor, told Arabian Business.

“But I’m not sure how quickly we will see a beneficial impact on the Egyptian tourism economy, given that many tourists from Saudi Arabia are shifting from Egypt and going to destinations such as Turkey.

“For the Middle East, recovery is earmarked for 2012, but for Egypt it will take longer. We expect that the current events will continue to lead to declining arrivals to the country. So not before 2015.”

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