Political unrest in Egypt to dampen travel and tourism activity
Monday, 23 Feb, 2011
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TravelMole guest comment: Euromonitor industry analyst Lisandra Minussi writes.
Egypt, the largest destination for arrivals in the Middle East, has been stricken by a wave of protests since January 2011 that resulted in the resignation of President Mubarak on February 11, who had been in power for the last 30 years.
An estimated one million tourists fled from Egypt to escape from the political unrest and many governments advised against non-essential travel to Cairo, Alexandria, Luxor and Suez. A sluggish Q1 2011 performance is expected for European travel and tourism businesses linked to Egypt.
The number of hotel investments in Egypt, coupled with increased air capacity, served as a magnet to travellers worldwide, given the country’s relative stability over 2009-2010. Winter is the high season for travelling to Egypt. European countries such as Russia, the UK, Germany and Italy are key source markets for Egypt, because of their proximity and the intense promotional efforts by Egyptian government authorities to lure European travellers.
|
Inbound Arrivals to Egypt from Key European Markets 2010
|
|
|
‘000 trips
|
2010
|
|
Russia
|
2,401.7
|
|
United Kingdom
|
1,548.7
|
|
Germany
|
1,261.3
|
|
Italy
|
1,118.2
|
|
France
|
561.6
|
|
Poland
|
532.3
|
|
Ukraine
|
418.0
|
|
Spain
|
141.8
|
|
Total
|
7,983.5
|
Source: Euromonitor International
TUI Travel expects a £30 million revenue loss in its Q2 2011 results due to the political and social unrest in Egypt and Tunisia as travellers cancel or rebook packaged holidays to alternative destinations. Competitor Thomas Cook also incurred losses of around £19.95 million.
TUI Travel is promoting or shifting capacity to other destinations, such as Spain and Turkey. While it continues to market Egypt’s Red Sea resorts to UK travellers, TUI Travel has cancelled trips to Egypt from countries such as Germany, France and the Netherlands. By February 2011, TUI Germany had already rebooked 40,000 air tickets from Egypt to the Canary Islands and 10,000 air tickets to Antalya.
Airlines were also severely impacted by the turmoil in Egypt, forced to change flight schedules to and from the country. Not surprisingly, the majority of airlines impacted by political unrest were European.
British Airways offered passengers travelling on or before February 8 2011 the option to either change the date of travel to a date no later than February 28 2011, cancel the booking for a refund, use the ticket value towards the purchase of a new ticket to any other destination or travel in or out of Sharm El Sheikh instead.
As travellers either cancelled travel to Egypt or left the country, hotels and resorts located by the Red Sea were close to registering 0% occupancy rates in the first week of February. The majority granted workers open-ended periods of leave without pay to reduce costs.
Hotels and resorts also started offering discounts. The Sheraton Hotel, located at 15 minutes by car from Tahrir Square, offered a 17.5% discount. Hotels located near Tahrir Square are seeing occupancy rates climb as journalists fill up vacant rooms, maintaining prices or even raising them as demand temporarily picks up.
The outlook remains uncertain for Egypt. Euromonitor International believes that the travel industry will see a quick recovery if the political transition following the events of February 11 2011 turns out to be orderly and peaceful.
Thailand saw similar unrest in 2010 and is already seeing a strong recovery in international flows. Euromonitor expects that the short term impact, while severe, may only slow arrivals growth to around 4% for the main European markets in 2011.
Besides Spain and Turkey, Caribbean destinations as well as the UAE are also expected to see an increase in inbound flows from Europe in the short term as people substitute their sand and sea vacations.
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Inbound Arrivals to Egypt from Key European Markets 2011-2015
|
||
|
‘000 trips
|
2011
|
2015
|
|
Russia
|
2,584.2
|
3,283.8
|
|
United Kingdom
|
1,627.7
|
2,027.9
|
|
Germany
|
1,289.0
|
1,440.9
|
|
Italy
|
1,151.8
|
1,322.9
|
|
France
|
567.2
|
596.1
|
|
Poland
|
553.6
|
657.6
|
|
Ukraine
|
424.2
|
455.6
|
|
Spain
|
141.1
|
153.0
|
|
Total
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8,338.8
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9,938.0
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Source: Euromonitor International
Dinah
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